Our efforts surrounding the “solution in search of a problem” antics of Attorney General Jim Hood are well documented. After cowering as a result of his settlement with State Farm, he has now set his sights on Entergy. We have documented these out of state lawyers that the AG secretly engaged behind the Public Service Commissioners’ backs. And just days ago, we seem to be the only one besides the MBJ reporting that Entergy reported the total purchases from the Hood-maligned “Evangeline” contract has been .4% (that’s point-4% or .004 or 4-one-thousandths) of energy purchased by Entergy Mississippi since 2006.
Hood’s entire MS rate case was based on a LA case. Well, guess what? That case just got tossed by the LA Supreme Court.
Today Entergy Mississippi issued a release saying:
The Louisiana Supreme court late last week overturned a Louisiana appeal court’s decision and reinstated the rulings previously made by the New Orleans City Council in the Gordon proceeding involving Entergy New Orleans, Inc.. The Mississippi attorney general has often publicly cited the Gordon case in his lawsuit against Entergy Mississippi, Inc. and has referred to this case extensively in his reasons for filing the suit against the company.
“We’re pleased with the high court’s decision, and we believe it is the right decision,” said John Mullins, vice president of customer operations for Entergy Mississippi, Inc. “The Court concluded that Entergy acted in good faith and with no intent to harm our customers, just as the City Council had previously concluded. “Additionally, this decision demonstrates that although the AG tries to act as prosecutor and judge at the same time, mere claims of wrongdoing do not prove wrongdoing in our legal system.”
The Gordon case was based on allegations that Entergy New Orleans, Inc. had overcharged customers. The Council voted to have Entergy refund Louisiana customers $7.2 million (plus $4.1 million in interest). The decision was appealed to the 4th Circuit Court of Appeals, which increased the amount from $7.2 million to $34.3 million. The Louisiana Supreme Court’s ruling means the original New Orleans City Council decision will stand.
The issue that was the focus of the Louisiana Supreme Court’s decision was a claim by the plaintiffs that Entergy New Orleans had recovered certain costs through its fuel adjustment clause instead of its base rates. However, the Louisiana Supreme Court concluded that the Council had not found that its rules had been violated, and that even if the Council had found that its rules had been violated, the Council would not have been required to order a refund.
“This fully supports our argument that matters like these should be handled by the proper regulating authority,” said Mullins. “In this case the Supreme Court confirmed the findings of the New Orleans City Council, Entergy New Orleans’ regulators.”
The Gordon v. Council of New Orleans case is one of the fundamental examples Hood used last year as his evidence for his action against Entergy. He cited it both in his September 22, 2008 press release (Attorney General Takes Action Against Entergy) where he laments that Entergy’s actions had forced him to file suit against them, and his December 2, 2008 press release (Entergy’s blatant refusal to disclose documents forces lawsuit) where once again, he claimed was forced to file suit against them. In neither release did he disclose that he had contracted with Alabama trial lawyers Vince Kilborn and David McDonald of the law firm Kilborn, Roebuck and McDonald on a contingency fee basis. In fact, he had signed that contract with Kilborn and McDonald on September 17, before either press release above that suggested it was Entergy’s fault he was filing suit. He further neglected to mention that these attorneys, who he contracted with for their expertise in these matters, was the source of this litigation. In retrospect, his statement to the media that “this was brought to our attention by the Public Service Commission’s work” seems a little disingenuous and misleading.
If you review that press conference you’ll find Jim Hood uses the Gordon case a number of times:
Uhm, you know it came to my attention back in about June that just recently over in the State of Louisiana, a judge ordered that they pay back $34 million to Louisiana rate payers of New Orleans only, $34 million just to the Entergy company, the little shell company, uh that handles New Orleans….We’ve got our documents. We’ve got our proof in the case that we’ve handed out to the press in this Gordon case where it shows they had to pay that money back in Louisiana. It’s the exact same allegations….And so, if you-know, they’ve got some defense they can provide that says they didn’t do this in Louisiana or they didn’t agree to this order, or this court order idn’t true, I’d like to see it….And we’ve got these documents, here’s the documents that show our authority, to file the suit, uhm, this Gordon case those copies are right over there. It shows what the allegations were and uhm, here’s a copy of our complaint.
If Jim Hood is right, and his allegations are exactly the same as the Gordon case, then the fact the Louisiana Supreme Court just rejected those allegations do not bode well for him. He asked for evidence “that says they didn’t do this in Louisiana,” now he has it in the form of Supreme Court ruling. It seems in arguing for the Gordon Case, Hood has proved Entergy’s defense.
Hood Predictably Goes Populist
As if on cue after taking a gut punch, Hood collects himself to go on offense again. Instead of acknowledging to taxpayers, ratepayers and the PSC the mistake it appears that he’s made, he now attacks Entergy on executive compensation. However, he doesn’t allege any malfeasance or use this as a basis for legal action. He just takes a shot at “big business” to say how unpalettable a huge paycheck is.
Leonard’s (the CEO’s) company, meanwhile took in revenue of $13 billion in 2008, amid recent fraud charges by the state of Mississippi that Entergy has engaged in pricing schemes that have resulted in its customers being overcharged for power. “The average Mississippian cannot even comprehend a $54 million payday, let alone ever see a fraction of that kind of money in a lifetime,” said Attorney General Hood. “Yet, every month, these customers pull out their wallets and faithfully and trustingly pay their electric bills to a company that apparently just sends a big portion of their hard-earned money back to its CEO.”
Just to show you how deep a hole Hood has dug, he is taking a rare step for him . . . a talk radio interview. He’s doing it in the ultimate place for Mississippi political populism . . . an interview on the JT & Dave show, Tuesday, April 7 at 11:30 a.m. Expect a full course of Entergy and “big bidness” bashing.
My prediction continues to be that this is a $1,000,000 of effort chasing a problem worth a fraction of that, all at signficant taxpayer and ratepayer expense. I also predict that Hood’s jihad against Entergy will end much like it did against State Farm . . . with a wimper instead of a bang.