Mississippi's largest investor-owned utility Entergy and Attorney General Jim Hood will finally have their day in court to resolve Hood's decade-long lawsuit against the utility and its wholesale pricing practices.
On November 5, Federal Judge Carlton Reeves will hear arguments in a bench trial to decide whether Entergy overcharged its 449,000 customers who live in 45 of the state's 82 counties from 1998 to 2009.
Hood is seeking $1.1 billion in the lawsuit. It was originally filed in 2008 and it alleges that Entergy chose to sell its highest-priced power in Mississippi sourced from aging, inefficient plants from its four-state service area rather than on the open market from other generators.
One factor that could affect Hood's lawsuit is the passage last year of Senate Bill 2295, which gives the Mississippi Public Service Commission exclusive jurisdiction over matters governing utilities.
Under the new law, the attorney general could go to court to contest a PSC decision and would require permission by the three commissioners to sue on their behalf.
Hood said in a letter to legislators last session that passage of the bill, which was needed to reauthorize the PSC, would jeopardize the lawsuit.
Attorneys from Kilborn, Roebuck and McDonald are handling the case on a contract with the AG's office and that could add up to $39 million in contingency fees if the lawsuit is successful.
The firm also handled a similar one filed in Louisiana that resulted in two Louisiana subsidiaries of the New Orleans-based utility having to pay more than $100 million in a class action.
This isn't the first time that Entergy's business practices have come under scrutiny. The U.S. Department of Justice reached a settlement with Entergy in 2012 over non-competitive business practices involving its distribution grid.
The government said that the company used it to shut out lower-priced, independently-owned generating plants from the wholesale market by excluding them in favor of its older, less-efficient generating plants.
When many these natural gas combined cycle plants went out of business, Entergy bought seven of them at low cost, including a plant in Atalla County in 2007, another one in Hinds County in 2012 and another near French Camp this August.
Entergy joined a regional transmission organization known as MISO, divested its transmission network and the DOJ dropped its complaint against the company.
Entergy's generation portfolio in Mississippi is in transition. While the company now owns three modern natural gas combined cycle plants, the rest of its non-nuclear fleet is either nearing the end of its its useful lifespan or close to it.
The Rex Brown facility in Jackson has three natural gas units and one oil-fired unit and they were completed in 1951, 1959 and 1968.
The Baxter Wilson plant in Vicksburg has two generating units and they became operational in 1967 and 1972. The Gerald Andrus natural gas plant in Greenville was completed in 1975.