Trial finally set in Mississippi’s $1B suit over power costs

Way back in December 2008, Mississippi’s attorney general sued the state’s largest private electrical utility claiming the company had overcharged customers by more than $1 billion.

Posted: Mar 30, 2019 7:19 PM

JACKSON, Miss. (AP) — Way back in December 2008, Mississippi’s attorney general sued the state’s largest private electrical utility claiming the company had overcharged customers by more than $1 billion.

Now, with Democrat Jim Hood running for governor, he’ll finally get his day in court on Monday against Entergy Mississippi, a subsidiary of New Orleans-based Entergy Corp.

The federal trial is expected to run for more than two weeks. U.S. District Judge Carlton Reeves, not a jury, will decide if Entergy is guilty of the offenses Hood alleges. The nub of the state’s argument is simple. Hood claims Entergy should have bought cheaper power from generating plants owned by others, but instead chose to run older, less efficient plants that it owned because selling that electricity was more profitable. Hood’s says Entergy should have to pay back up to $1.1 billion, plus penalties, from 1998 to 2009.

If Hood wins, he could force Entergy to issue refunds to 447,000 customers in western Mississippi during election season, although any verdict would likely be tied up appeals. A victory would amplify Hood’s position that he defends Mississippians against rapacious corporations. Those same lawsuits have long stuck in the craw of Republicans, who says Hood lets private lawyers handle lucrative suits and they then donate to Hood’s campaigns. This lawsuit is being handled for Hood by private lawyers who sued two Entergy subsidiaries in Louisiana, winning about $100 million in class-action damages. A state appeals court threw out a Texas suit, agreeing with Entergy that the dispute was for a regulator to decide.

Hood issued a statement Friday saying he was confident the state would prevail in court.

“I have been fighting this case for a decade,” he said. “It’s time for Entergy to stop being a poor corporate citizen and pay what they owe Mississippians.”

Entergy’s defenses start with arguments that Hood shouldn’t be bringing the suit at all. The company claims that either the Federal Energy Regulatory Commission or Mississippi’s Public Service Commission should decide such a complaint.

The latter argument is bolstered by a 2018 state law saying the Mississippi Public Service Commission has “exclusive jurisdiction” over utility matters. The law, pushed strongly by Entergy, says Hood can only appeal decisions to court or sue with permission from the three-member regulatory body. Hood decried the law, but says it doesn’t apply to this case, filed long before.

Entergy also says that it needed its own expensive-to-run power plants that could start and stop quickly in order to ensure the lights stayed on. Entergy notes that it’s required to buy electricity generated as a byproduct at industrial plants. Louisiana and Texas have many such plants and Entergy says the power supply can shift from moment to moment in a way that third-parties can’t handle.

Entergy argues that buying more power for Mississippi from independent producers would have harmed other subsidiaries under a now-defunct system agreement that unified operation of subsidiaries across Mississippi, Arkansas, Louisiana and Texas.

“We have always believed that this case should be heard by our regulators and are hopeful the court will find in our favor and grant our motion to dismiss,” Entergy spokeswoman Mara Hartmann said in a statement. “Regardless, our fuel costs have been audited annually since 1979, and since the suit was first filed in 2008, 20 independent audits have all concluded that there were no inappropriate charges by Entergy Mississippi to its customers. This affirms that we treat our customers fairly.”

Reeves hasn’t agreed with Entergy’s claim that Hood shouldn’t be bringing the suit so far, though. On Friday, he issued a short ruling denying Entergy’s previous arguments to dismiss the case.

“Persistent factual and legal issues require a complete airing of their dispute at trial,” Reeves wrote.

Entergy faced claims from the U.S. Department of Justice that it used control of its transmission grid to favor its own power plants over independent generators. Independents were unable to sign profitable long-term contracts. Many generators ended up in financial distress and Entergy bought seven of their power plants.

The Justice Department didn’t pursue those claims further after Entergy turned over management of its power grid to the Midcontinent Independent System Operator, a third party that now decided which power plants run. Entergy has long denied wrongdoing.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 259117

Reported Deaths: 5668
CountyCasesDeaths
DeSoto17436187
Hinds16524328
Harrison13876199
Rankin11000217
Jackson10652187
Lee8981141
Madison8413168
Jones6552112
Forrest6101121
Lauderdale6034189
Lowndes5463119
Lafayette507393
Lamar496465
Washington4877124
Bolivar4068109
Oktibbeha401681
Panola378380
Pontotoc372155
Monroe3628105
Warren3619101
Union350563
Marshall349569
Neshoba3433152
Pearl River3380104
Leflore3079108
Lincoln300687
Sunflower289272
Hancock285360
Tate276762
Alcorn268854
Pike266580
Itawamba266261
Scott253448
Yazoo250156
Prentiss249552
Tippah245850
Copiah244549
Coahoma243654
Simpson240069
Leake234367
Grenada221171
Marion218473
Covington216972
Adams210170
Wayne206432
Winston205267
George202739
Attala195761
Newton195745
Tishomingo192461
Chickasaw186144
Jasper176038
Holmes169868
Clay162735
Tallahatchie154935
Stone148424
Clarke143562
Calhoun138021
Smith125825
Yalobusha120234
Walthall113437
Greene112129
Noxubee111425
Montgomery110936
Carroll105922
Lawrence104317
Perry103231
Amite99926
Webster94324
Tunica87621
Jefferson Davis87327
Claiborne86825
Benton84023
Humphreys83624
Kemper79120
Quitman7029
Franklin68716
Choctaw62313
Wilkinson58825
Jefferson55920
Sharkey44217
Issaquena1606
Unassigned00

Alabama Coronavirus Cases

Cases: 432536

Reported Deaths: 6379
CountyCasesDeaths
Jefferson63523957
Mobile30967562
Madison27627201
Tuscaloosa21122268
Montgomery19495326
Shelby18941126
Baldwin16798188
Lee12901102
Morgan12447129
Etowah11911178
Calhoun11365205
Marshall10322119
Houston8813156
Limestone823176
Cullman8159106
Elmore8056104
DeKalb7796102
Lauderdale773399
St. Clair7705122
Talladega6347109
Walker5993174
Jackson590341
Colbert543274
Blount541186
Autauga527061
Coffee454160
Dale405482
Franklin371948
Russell345712
Chilton340972
Covington334168
Escambia328344
Dallas310196
Chambers297370
Clarke290536
Tallapoosa2665107
Pike258830
Marion250155
Lawrence249150
Winston231442
Bibb219848
Geneva206946
Marengo205229
Pickens198631
Hale180842
Barbour177836
Fayette174528
Butler171358
Cherokee162530
Henry157523
Monroe150718
Randolph143236
Washington139527
Clay128546
Crenshaw121644
Cleburne119724
Lamar119621
Macon119637
Lowndes112536
Wilcox105822
Bullock101428
Perry99118
Conecuh96320
Sumter89726
Greene76723
Coosa62215
Choctaw51624
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