[StBernard] Regulators order Entergy to issue another refund in La.

[Westley Annis]

Regulators order Entergy to issue another refund in La.
	
By MARK BALLARD
Advocate Capitol News Bureau
Published: Sep 21, 2007 - Page: 12A

Federal regulators on Thursday found that Entergy Corp. customers have been
paying too much for their electricity and once again ordered the utility
that services 1 million customers in this state to issue refunds.

The money being returned amounts to another dollar or two knocked off
monthly bills of typical residential customers.

But the federal decision sets the stage for a fight over yet another refund
that could mean an additional $300 million returned to Entergy's customers,
which could translate to a 20 percent reduction in typical residential
monthly bills as soon as 2008, said Jay Blossman, chairman of the Louisiana
Public Service Commission.

The Federal Energy Regulatory Commission's decision Thursday agrees with the
PSC's arguments in the other case, said Blossman of Mandeville.

FERC usually follows precedence - earlier decisions - when ruling on cases.
That means federal regulators should side with the PSC and order Entergy
later this year to make the third refund to its Louisiana customers, said
PSC member Jimmy Field of Baton Rouge.

"It is frustrating that we have to continually litigate these issues," Field
said.

"Maybe on the commission we should have been tougher on Entergy through the
years," said PSC Commissioner Foster Campbell of Bossier Parish, who is
running for governor. "The good thing is the consumers will be getting back
some of their money. That's what's important particularly since the rates
are so high."

Speaking for Entergy, Walter Ferguson of New Orleans, vice president of
system regulatory affairs, refused to confirm or deny the commissioners'
refund estimates and refused to discuss Entergy's position on any of the
cases other than to say that the utility follows FERC orders.

Entergy already is refunding Louisiana customers about $195 million - about
$8 for a residential customer using 1,000 kilowatt hours per month, which is
slightly less than typical. The money is being paid by Entergy's Arkansas
customers, who are being asked to pay higher rates by that state's
regulators.

Thursday's FERC decision amounts, by PSC estimates, to about $27 million in
refunds plus a similar amount in interest. The results still need to be
tallied, but that estimate calculates to a refund of about $2.

"This is a complete victory for Louisiana," said Michael Fontham, the New
Orleans lawyer who was hired by the PSC to handle the case. "It's a lot of
dough."

Because privately owned utilities operate as a monopoly, the state
constitution gives the five-elected PSC commissioners the ability to oversee
Entergy's business decisions that affect what Louisiana customers pay each
month for electricity. FERC becomes involved when business decisions cross
state lines, as they often do with Entergy, which sells electricity in
Arkansas, Mississippi, Louisiana and Texas.

The PSC argued that Entergy's "system agreement" requires the customers in
the states Entergy services to pay roughly the same amount for electricity.
FERC found that Louisiana customers were paying more than those in Arkansas.
Entergy contended in filings and press releases that reason lay with the
high price of natural gas, which makes much of the electricity in Louisiana,
versus lower costing coal primarily used in Arkansas.

This is the case that led to the refunds that Entergy's Louisiana customers
currently are receiving. Those refunds, the amount of which can be seen as a
line item on each month's electric bill, cover only the overpayments made in
2006.

The PSC contends that Entergy's Louisiana customers also overpaid in 2005
and that the utility should issue another 18-to-24 months of refunds, which
could mean another $300 million or so need to be refunded.

Thursday's decision is "a big deal because they say that you can go back in
time to grant refunds," Blossman said.