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Originally appearing the The Advocate, 2/24/05

PSC stops vote

Time sought to study deal with Entergy

By MARK BALLARD

mballard@theadvocate.com

Capitol news bureau

The Public Service Commission on Wednesday abruptly postponed a vote on an agreement that could mean refunds of about $100 for each Entergy customer.

Commission Chairman Dale Sittig of Eunice said that "some of the commissioners" needed more time to study the $95.5 million deal that commission staffers had cut with Entergy Corp. to settle a dozen disputes over possible overcharges.

Called the "global settlement," Sittig said the commission would take up the proposal at the commission's next meeting March 23 at the Ruston Civic Center in Lincoln Parish.

The five commissioners must approve the global settlement before ratepayers can receive refunds.

His announcement led to raised eyebrows and shrugged shoulders among PSC staffers, who before the meeting had predicted a fast OK so customers could get their refunds next month.

As the commissioners started gathering papers to wrap up the meeting, a consumer advocate rushed to grab the microphone. She demanded to be heard on the global settlement.

Sallie Davis of New Orleans claimed the debate was postponed to quiet her group's criticism of the deal. She said the deal is a set-up to raise rates long-term.

Sittig attempted to quiet her, but Davis countered that she had taken a day off from work to testify against the global settlement and was angry that it had been dropped from discussion.

After conferring with other commissioners, Sittig allowed Davis to speak. The consumer group's allegations caused some PSC staffers to swear aloud and scramble through the milling crowd to line up counter witnesses.

If approved, the refunds would be issued on the following month's bill. For the 324,000 customers of Entergy Gulf States Inc., which includes customers from Baton Rouge to Lake Charles, the refunds will be calculated based on electricity use.

The average customer in this area uses about 1,047 kilowatt hours of electricity and would receive a $100 credit on the bill, according to Entergy.

The refunds are for electricity only. Natural gas usage will not be affected.

The deal also includes the 650,000 customers of Entergy Louisiana Inc., which covers southeast Louisiana. However, ELI users would receive about $9 each.

Davis, the consumer advocate, is an attorney with the Alliance for Affordable Energy, a not-for-profit organization that she says represents about 106 groups, 17,000 small commercial users and 1.8 million residential consumers.

Davis said the global settlement is a clever way to mollify consumers with shiny refunds while slipping in a mechanism that ultimately will increase utility rates without PSC oversight.

Called a Formula Rate Plan, the mechanism allows the PSC to use specific financial data to determine rates annually. Presently, rates are set only after a prolonged and in-depth review.

"This is not about settling old cases but establishing a Formula Rate Plan that will, in fact, increase rates," Davis said. "It's an unprecedented departure for the PSC."

Davis testified the entire settlement is actually worth about $360 million -- far more than the $95.5 million figure on which Entergy and the PSC staff have agreed.

PSC staff attorney Matthew Loftus, who crafted the deal with Entergy's lawyers, questioned why Davis waited so long to raise opposition.

"It concerns me that y'all, at this point in the process, are making all these responses on all these other dockets," Loftus said.

Exchanges between Davis and staff lawyers became increasingly sharp until Commissioner Foster Campbell of Elm Grove interjected, "Why do we need to cross-examine this lady? Why can't we just let her have her say and go home?"

Commissioner Jimmy Field of Baton Rouge, who represents much of the area between Baton Rouge and Lafayette, said he is against the PSC staff's deal.

Field forwarded a proposal that more closely follows the recommendations of the PSC's outside counsel, rather than the staff's. He wants Entergy to refund $123 million, plus reduce future rates by $30 million.

"I was very pleased at the delay," Field said.

Commissioner Lambert Boissiere of New Orleans, whose district also includes the River Parishes and parts of Baton Rouge, said he has not decided on whether to support the settlement.

Recently elected, Boissiere said he had been on the job slightly more than six weeks and wants more time to study the issues.

Because utilities are granted a virtual monopoly to provide vital services, the Louisiana Constitution gives the Public Service Commission authority to oversee the utility's prices and the business practices that may affect those rates.

The PSC sets rates for consumers based on complex calculations on how much utilities pay to provide power and how much these private corporations are allowed to earn for their investors.

The 12 disputes between Entergy and the PSC involve disagreements over the interpretation of the company's financial situation and how the PSC responded when setting rates.