In the continuing saga that has AG Jim Hood and the Mississippi Public Service Commission chasing Entergy Mississippi and claiming malfeasance on their behalf, some new light has been shed by an industry expert.

Entergy had requested a fuel adjustment rate increase in 2008, which was denied by the PSC. The PSC claimed that more information was needed about Entergy’s fuel purchasing practices and that industry expert Walter Drabinski of Vantage Consulting was being hired to conduct a performance audit. With the Attorney General using politically inflamatory terms like “hands in the cookie jar” and “shell game” to readily claim Entergy Mississippi’s bad deeds to the press, it would have seemed logical that Drabinski’s report would have been scathing . . . if there was anything truly fraudulent about their practices.

There wasn’t.

Yesterday, the PSC finally released the Drabinski audit numbering 78 pages, which was released a full two months after the publicly funded report was dated (November 10, 2008).

Certainly, I don’t claim to be a utilities expert, but a quick read did not lead a lay person to conclude that Entergy Mississippi’s operating or purchasing practices were deficient or wrought with fraud and bad intent as the AG and certain members of the PSC have so readily publicly proclaimed. Though the report is certainly a dry read, a few things did stand out.

First, Vantage would clearly like to have Entergy conduct more internal audits. For a multi-billion dollar company with tens of thousands of fuel purchasing transactions and hundreds of thousands of customers, I doubt that would be an uncommon request.

Vantage did state that there is “no evidence that Entergy mismanages its power plants” and has a “well designed (power) system”. There were also certain structural and regulatory suggestions made.

The bottom line is that the much ballyhooed industry expert could find no indication of anything that was really “out of kilter” with normal industry practices. Certainly, Drabinski had a critical eye and would make some changes, but political, regulatory and business realities would make it difficult to find perfection in any regulated or regulating body. Of course, that’s just my take. You can read for yourself and decide.

Now that this information is out there, it will be interesting to see if the Commissioners that put so much stock and trade into this report will temper their language and seek to find a solution rather than lobbing political hand grenades from the cheap seats. With the political zeal that the AG and certain Commissioners have pursued this, the bitter pill may be that the result may well be having a million dollars of effort chasing a half-million dollar mistake. Time will tell. Regardless, I believe that everyone on both sides will be given a chance to show their true colors and motivations soon and that it will all be laid bare for the public to see.