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: 512632

Reported Deaths: 10262
CountyCasesDeaths
Harrison34853555
DeSoto33162432
Hinds32556641
Jackson24830389
Rankin22442402
Lee16238242
Madison14874283
Jones14086247
Forrest13741259
Lauderdale12249324
Lowndes11286193
Lamar10644140
Pearl River9707244
Lafayette8827143
Hancock7835132
Washington7550169
Oktibbeha7204138
Monroe6989179
Pontotoc6970109
Warren6849178
Panola6746134
Neshoba6726210
Marshall6653141
Bolivar6440151
Union633897
Pike5924156
Alcorn5862107
Lincoln5525136
George510180
Prentiss500884
Tippah490282
Itawamba4829107
Scott477499
Adams4766125
Tate4748116
Leflore4723144
Copiah455895
Yazoo455591
Simpson4543117
Wayne442772
Covington432895
Sunflower4299106
Marion4265112
Coahoma4227109
Leake413790
Newton395581
Tishomingo381793
Grenada3775109
Stone365666
Jasper340166
Attala337790
Winston317792
Chickasaw313367
Clay311878
Clarke301195
Calhoun284449
Holmes271289
Smith268952
Yalobusha243747
Tallahatchie231453
Greene224749
Walthall221366
Lawrence217840
Perry213356
Amite209557
Webster205148
Noxubee188642
Montgomery181557
Carroll174441
Jefferson Davis173643
Tunica163239
Benton152639
Kemper144941
Choctaw136527
Claiborne134238
Humphreys131139
Franklin124929
Quitman107528
Wilkinson105939
Jefferson96834
Sharkey65121
Issaquena1957
Unassigned00

Alabama Coronavirus Cases

Cases: 844594

Reported Deaths: 16115
CountyCasesDeaths
Jefferson1160612006
Mobile741651379
Madison53255732
Shelby38313368
Baldwin38061589
Tuscaloosa35996641
Montgomery34473781
Lee25541263
Calhoun22582518
Morgan22441406
Etowah20009517
Marshall18771316
Houston17723425
St. Clair16863358
Limestone16123218
Cullman16032303
Elmore15902294
Lauderdale14945306
Talladega14186299
DeKalb12957269
Walker12011380
Blount10700192
Autauga10512157
Jackson10151194
Coffee9412192
Colbert9325208
Dale9013191
Tallapoosa7248201
Russell707465
Chilton7015170
Escambia6951143
Covington6926195
Franklin6337108
Chambers5778142
Marion5400130
Dallas5283209
Pike5114109
Clarke484986
Lawrence4826129
Winston4777110
Geneva4640136
Bibb434094
Barbour369180
Butler3433100
Marengo342393
Monroe336666
Randolph334067
Pickens333188
Fayette329885
Henry320566
Hale317989
Cherokee316963
Crenshaw260477
Washington256952
Cleburne254360
Lamar251253
Clay250869
Macon244764
Conecuh192762
Coosa184647
Lowndes178168
Wilcox177438
Bullock152545
Perry141840
Sumter139041
Greene130245
Choctaw93228
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