Hood: Don't believe power company

By John O'Brien | Feb 12, 2009


JACKSON, Miss. (Legal Newsline) - News from the camp of power provider Entergy just isn't true, Mississippi Attorney General Jim Hood is contending.

The two sides, already locked in a bitter debate concerning Hood's ability to investigate the company, are now disagreeing over what was proved by an independent consulting firm's assessment of Entergy's business practices.

While Entergy claims it shows it has its customers' best interests in minds, Hood says the company is spreading false information.

"Entergy is at it again, issuing press releases that are not true," Hood said in a release of his own Wednesday.

"The report itself states that Vantage Consulting did not review any procurement decisions and did not make any judgment as to the prudence of any purchase. In fact, the audit recommended additional audits because they found Entergy's accounting was 'likely to be inaccurate.'"

Dorman Davis, the manager of regulatory affairs for subsidiary Entergy Mississippi, said he was encouraged by the report's findings.

"The way we project fuel costs and true up fuel cost recoveries, provide the commission with sufficient fuel filing data and plan for Mississippi's future energy needs were all noted as practices that serve our customers well," Davis said.

"We'll pay careful attention to the report's critique of our method for recovering fuel costs. Matters like these are under consideration at the (Public Service Commission) and we'll continue to fully support their review."

The PSC sided with Hood.

"Vantage found that the model being used by Entergy for forecasting load and fuel prices is 'likely to be inaccurate due to the very nature of Entergy's system,'" PSC Commissioner Brandon Presley said.

"Mr. Drabinski also noted in his report that he was "surprised" by the fact that there were few internal audits conducted by Entergy.

"With respect to the touting of these findings, I think Entergy needs to put down the pom-poms and pick up some reading glasses."

Hood filed suit against Entergy in December, charging the company with fraud, unjust enrichment and anti-trust violations. The two sides remain deadlocked on the legality of the Civil Investigative Demands issued by Hood in August.

Entergy, the state's largest energy provider, operates in three other states. Hood feels that Entergy Mississippi is buying gas at an inflated cost from the other Entergy companies, driving prices up for Mississippi consumers.

Entergy called Hood's CIDs a "fishing expedition" and feels the Attorney General's Office has no business investigating utilities.

In November, the state's Public Service Commission urged the company to turn over the requested records.

Entergy unsuccessfully tried to block the request in federal court. The dispute then moved to Hinds County Chancery Court, where a judge heard arguments in October.

Hood has said he requested the documents because of Entergy's past in Louisiana and says the state's Consumer Protection Act allows him to investigate.

Entergy agreed to refund $72 million over similar allegations in Louisiana in 2000 and was ordered to pay $34 million to New Orleans customers in February.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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