Miss. AG files lawsuit against Entergy

Published 11:45 pm Wednesday, December 3, 2008

Mississippi’s attorney general filed a lawsuit against Entergy Corp. and its subsidiaries Tuesday, claiming the companies illegally manipulated the purchase and sale of electricity to maximize profits.

The fraud and antitrust lawsuit filed in Hinds County Chancery Court claims Entergy buys electricity from sister companies at a higher rate than it could on the open market, then passes the inflated costs along to consumers.

“Entergy’s duty to Mississippi rate payers is that they have to provide us with the cheapest energy that is reliably available,” Attorney General Jim Hood said.

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Entergy spokeswoman Mara Hartmann declined comment on the lawsuit, saying the company was still reviewing it. However, the company has previously said its practices were sound and Hood’s allegations of wrongdoing were without merit.

Hood’s suit is similar to two lawsuits against the company in Louisiana that claimed customers were overcharged.

Entergy Louisiana was ordered in 2000 to refund $72 million to customers in one lawsuit and ordered this year to refund $34 million in the other. Neither of those lawsuits were filed by the state of Louisiana.

Entergy provides electricity to 2.7 million customers in Arkansas, Louisiana, Mississippi and Texas. The company has annual revenues of more than $11 billion.

Hood, for months, has sought thousands of Entergy internal documents while the utility has denied Hood’s allegations. Entergy also sought to block him from obtaining company records related to fuel purchases.

Entergy has maintained its practices are fair and that the Mississippi Public Service Commission is the proper overseeing body, not Hood’s office.

However, the MPSC issued a resolution last week, saying Entergy should hand over the internal documents sought by Hood for his investigation into the company’s fuel purchasing practices.

Haley Fisackerly, president and chief executive officer of Entergy Mississippi, said Tuesday that he was shocked by the PSC resolution.

“Resolutions are nonbinding. Commissions direct us to do things, raise our rates, build power plans, substations, whatever may be through orders,” Fisackerly said. “Those become binding documents. Second of all, they did it with no due process granted us.”

Fisackerly said Entergy has requested a formal hearing to discuss the issue before the three-member Public Service Commission. The PSC is reviewing the request.

The commission issued a subpoena to Entergy in October, ordering the company to turn over documents in the two Louisiana court cases. The company complied and Hood said those documents show Entergy’s parent company sold Entergy Mississippi electricity at $26 per 1,000 kilowatt hours that it bought on the open market for $12 per 1,000 kilowatt hours.

Hood claims Entergy committed fraud by telling the Public Service Commission that it was providing Mississippi customers with the cheapest energy it could find.

Entergy has called all of Hood’s claims “irresponsible, without merit, a waste of taxpayer money and harmful to the state’s business reputation.”