Facing $1B Suit, Utility Seeks To Curb Attorney General

JACKSON, Miss. (AP) — In one corner, there's Mississippi Attorney General Jim Hood, who has made suing corporations a hallmark of his tenure.

In the other corner is Entergy Mississippi, the state's largest privately owned electrical utility, whose leader says the company is supporting a bill to make it harder for Hood to sue the company again.

And in the middle of the ring is a decade-old federal lawsuit over how New Orleans-based Entergy Corp. charged its Mississippi unit for wholesale electricity. Hood claims the company wrongly chose to sell overpriced power from inefficient generating plants from 1998 to 2009 and should pay back up to $1.1 billion, plus penalties. His lawsuit argues Entergy instead had a duty to buy cheaper power from outside generators for its 447,000 customers in western Mississippi.

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"They're looking down the barrel of a gun and they're desperate with a billion dollars on the line," Hood said of the suit, which he hopes to bring to trial later this year.

Entergy is backing Senate Bill 2295 , which passed the Senate 51-1 and is now pending in the House. It says that the Mississippi Public Service Commission has "exclusive jurisdiction" over utility matters, and the attorney general can only appeal decision to court or sue with commission permission. The new clause is attached to a must-pass bill that keeps the Public Service Commission in business. Barring legislative action, the utility regulator would go out of business on June 30.

Entergy Mississippi CEO Haley Fisackerly said Hood's lawsuit has muddied the water about who's in charge of utility regulation in the state, and said rate disputes should be decided by the commission.

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"When we saw the repealer coming up here, we said 'We need some clarity here, who's regulating us — The attorney general or the Public Service Commission?" Fisackerly said.

Fisackerly said that the new law wouldn't cause Hood's lawsuit to be thrown out. Hood, though, predicted in a Feb. 7 letter sent to every member of the House of Representatives that Entergy would try to use the law to throw out the lawsuit.

He wrote in the letter that "unscrupulous utilities in Mississippi will argue that any activity, including criminal activity, that is even remotely related to rates, customer bills, or the accuracy or reliability of information" can only be handled by the commission. He also wrote that commissioners can't award damages or penalties, as a court can, even if it can order refunds.

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It's the second attack on Hood's power this session. He's also trying to kill House Bill 1238, which would prohibit the attorney general's consumer protection division from suing private businesses for actions that are allowed by state or federal laws or regulations.

The lawsuit is being handled by private lawyers who sued two Entergy subsidiaries in Louisiana, winning about $100 million in class-action damages.

Entergy faced claims from the U.S. Department of Justice that it used control of its grid to favor its own power plants over newer independent generators, even when it cost much more to make electricity at old, inefficient Entergy plants. 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.

Fisackerly restated Entergy's longtime position that it did nothing wrong. But Hood said Entergy's annual claims of savings from MISO proves the company could have bought power more cheaply from others.

"This is stuff that's so nefarious that I think people will be really concerned about their legislators supporting it," he said.

-By Jeff Amy, Associated Press

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