Hood levels charges at Entergy affiliate

Mississippi Attorney General Jim Hood announced Tuesday that he has found more evidence of wrongdoing on the part of state power provider Entergy Corporation.

Hood claims he has evidence that Entergy Louisiana, LLC, an affiliate of Entergy Corp., is guilty of improperly recovering non-fuel costs that are prohibited by law.

By an order dated December 4, 2008, the Louisiana Public Service Commission claims the affiliate used non-fuel operation and maintenance expenses and “hypothetical S02 allowance costs” to pad its bills.

“This is just another example of how Entergy pads its bills,” the Democratic attorney general said. “Our complaint alleges that they have padded their bills with these ‘hypothetical SO2 allowance costs.’ We intend to make them stop this improper conduct and give this money back to ratepayers, just like they were required to do in Louisiana.”

Entergy Louisiana, LLC allegedly used its fuel adjustment clause (FAC) to justify the allowance costs, despite those costs being disallowed in January 2002.

The clause allows utility companies to recover fuel related expenses as soon as they are incurred instead of waiting until after regulatory
approval is complete. It also provides for a dollar-for-dollar recovery by utilities and prohibits the companies from earning a profit from the FAC.

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