Judge could hand $2B Entergy Mississippi rate fight to utility regulator
JACKSON, Miss. — Days after deciding to go forward with a trial over whether a Mississippi utility overbilled its customers, the judge on Tuesday ordered fresh arguments on whether he has the authority to hear the case.
U.S. District Judge Carlton Reeves canceled the third day of the trial, set for Tuesday, and instead instructed lawyers for Attorney General Jim Hood and Entergy Mississippi to submit new briefs on whether he should hear the trial or refer the dispute to a federal or state utility regulator.
The move clouds a blockbuster confrontation between Hood, a Democrat who is running for governor, and Entergy over a $2 billion lawsuit first filed in 2008. Hood argues that Entergy, a unit of New Orleans-based Entergy Corp., defrauded customers by not buying less expensive power from outside companies. He also says Entergy Mississippi should be forced to repay the money, plus interest, to its 447,000 customers in western Mississippi. The state said Entergy blocked less expensive power plants owned by others, seeking to put them out of business.
Entergy denies wrongdoing, and says its choices were made to ensure reliable electricity supplies in the face of supply-and-demand fluctuations.
Entergy has always argued the dispute should be decided by either the Federal Energy Regulatory Commission or the state Public Service Commission, which is made up of three elected regulators.
“Whatever remedies the attorney general may have in terms of litigation, they should come after the MPSC does it work,” Entergy lawyer Sanford Weisburst said Tuesday.
Hood says court is the right place for the dispute, and Reeves agreed last Friday, writing in a ruling that he wanted to hear the law and evidence at a trial scheduled to run for parts of three weeks. There’s no jury, with Reeves to decide the verdict himself.
But beginning Monday afternoon, after opening arguments, Reeves began to ask lawyers to discuss whether he should ask the Public Service Commission to weigh in. A 2018 state law pushed by Entergy says the Public Service Commission has “exclusive jurisdiction” over utility matters. The law says Hood can only appeal decisions in court or sue with permission from the commission. Hood said the law doesn’t apply to this case because it began long before the law was passed.
“What if this court determines the attorney general should go to the PSC?” Reeves asked Monday. “Could the attorney general go to the PSC right now?”
Vince Kilborn, a lawyer hired by Hood, said the argument that the issue must be decided by the commission is just another delaying tactic by Entergy in the 10-year-old case.
“There’s going to be an Entergy objection to every step, every letter, every brief, every ‘everything’ all along the way,” Kilborn said Tuesday. “It’s going to be a nightmare of appeals and objections all along the way.”
Reeves said he might stall the case for up to six months to allow the commission to act.
The Public Service Commission has kept its distance from the dispute. Entergy claims repeated audits by the separate Public Utilities Staff showed no wrongdoing.
“If that’s sent back to the commission, I would ask us immediately to go into special session for the full commission to hear it or to appoint a hearing officer,” Public Service Commission Chairman Brandon Presley, a Democrat representing the state’s northern district, said Tuesday.
The state commission is Entergy’s second choice of forum. Because the questions involve a multi-state power system, lawyer Roy Campbell said Monday that the Federal Energy Regulatory Commission should decide the dispute.
Also Tuesday, Entergy attacked the qualifications of state witness David DeRamus, an economist whose analysis of Entergy’s power purchases is a cornerstone of the state’s case. Entergy lawyer Mark Strain argued DeRamus has long taken positions opposing Entergy, but been mostly rejected by courts and regulators.
“Just because he’s said it repeatedly doesn’t mean he’s right and doesn’t make him an expert to say he’s right,” Strain told Reeves. “You don’t become an expert by repeating a mantra over and over again.”
DeRamus, though, said Entergy’s claims that it needed to run more expensive generating units to make sure electric supplies are reliable is a “pretext” for bolstering its own revenue.
“Entergy had ample opportunities to procure flexible resources from the market,” DeRamus testified.