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Utility regulators in Mississippi and Arkansas have both settled a contentious fight over Entergy’s alleged mismanagement of its massive Grand Gulf nuclear plant, after Arkansas abruptly accepted an offer it had rejected a year ago.
But officials in Louisiana appear to be intensifying their fight, asking federal officials to sanction Entergy as they seek to claw back hundreds of millions of dollars from the utility.
The Louisiana Public Service Commission and the New Orleans City Council are preparing to call a former Grand Gulf employee to testify about mismanagement of the plant, which is located in Port Gibson, Mississippi, and supplies power to four Entergy subsidiaries.
The sprawling case against Entergy alleges the firm failed to operate the plant well, embarked on an ill-fated expansion and undertook a wide array of improper tax and accounting practices.
The Federal Energy Regulatory Commission, or FERC, which settles utility disputes that cross state lines, has ruled against Entergy in some aspects of the case. But Entergy claims it doesn’t owe additional refunds, while the regulators in Louisiana say Entergy absolutely does and is willfully misinterpreting FERC’s rulings.
Now, regulators are asking FERC to fine Entergy $1 million a day for refusing to pay the refunds.
“It seems to me Entergy is playing a legal maneuver that basically tries to bully us and wear down the clock,” Public Service Commissioner Davante Lewis said in an interview. “Their arguments are not sound.”
Lewis was elected to the PSC in 2022, knocking off longtime incumbent Lambert Boissiere III, after promising to take a more aggressive posture toward the utilities the panel regulates. He said Entergy wants to make a potential settlement over the Grand Gulf issues part of its ongoing request to raise rates on customers; Lewis says that is a “no-go.”
Entergy Louisiana is asking the PSC to raise rates by 5% in a bid to increase the firm’s profits and pay for various costs. That request comes at a time when regulators are heaping increased scrutiny on the utility for reliability issues, high costs and the lingering Grand Gulf case, which began in 2018. Lewis, who campaigned on a progressive platform to oust a longtime incumbent, makes up part of a bloc of votes at the PSC that has been more skeptical of Entergy than past commissioners.
The PSC and City Council were joined several years ago by regulators in Mississippi and Arkansas in their bid to claw back hundreds of millions of dollars in refunds from Entergy for problems at the Grand Gulf nuclear plant, one of the biggest in the U.S. The plant has had reliability issues in recent years, and regulators allege Entergy has shifted costs to ratepayers through accounting maneuvers.
Mississippi settled the case last year, agreeing to a $300 million refund.
At the time, last fall, Arkansas rejected a similar settlement for $142 million. But last month, the Arkansas Public Service Commission reversed course and accepted the deal.
Danni Hoefer, chief of staff to Arkansas Public Service Commission Chairman Doyle Webb, declined to answer questions about why the PSC decided to take a deal it rejected a year ago. Hoefer said the money will be refunded to ratepayers; Entergy said in an SEC filing that the amount includes $50 million it already refunded to Arkansas.
Entergy didn’t respond to messages seeking comment.
In an earnings call earlier this month, Entergy Corp. CEO Drew Marsh told analysts the settlements with Mississippi and Arkansas took care of about two-thirds of the financial risks associated with the Grand Gulf lawsuits. He also said it could take two years to reach a full resolution at FERC.
Lawyers for the Louisiana regulators are set to hold a deposition with former Grand Gulf employee Jairus Greene to discuss the plant’s mismanagement and other issues in mid-December. Entergy wrote in filings that Greene was fired for failing drug tests for marijuana.
Greene’s attorney declined to comment. Greene has filed a separate lawsuit against Entergy alleging he was actually fired for refusing to falsify safety reports.
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