Federal regulators on Thursday ordered Entergy Corp. to refund up to $200 million to many of its Louisiana customers.
The refund likely would come as a lump-sum credit of about $30 to $40 on the monthly bill of a typical residential customer in Baton Rouge, though many of the details have yet to be worked out, said Michael R. Fontham, the New Orleans lawyer hired by the Louisiana Public Service Commission to pursue the case in Washington, D.C.
The typical residential customer of Entergy Gulf States Louisiana, which services about 325,000 homes in 18 parishes including East Baton Rouge, uses about 1,300 kilowatt hours of electricity each month, according to the PSC.
The Federal Energy Regulatory Commission ordered payments to cover a period of time in 2005 when the price of natural gas was about four times more than it is now, Fontham said late Thursday.
“I’m a little reluctant to start tossing out numbers, but we’re talking $30, $40,” Fontham said. “That’s my best guess. But it’ll be significant. You’ll notice it.”
The FERC order gave Entergy 60 days to calculate exactly how much is owed and another 30 days to pay it.
“We’re looking at all the options,” said Molly Janke, Entergy’s Louisiana spokeswoman, when asked about FERC’s order.
Thursday’s order stemmed from a federal appellate court ruling about an earlier FERC decision.
In 2005, FERC found Entergy failed to keep the costs of generating and transmitting electricity roughly the same for its customers in the four states the utility operates.
The power made in Louisiana, more so than in other states, relies on natural gas to fuel the generators. The higher cost of natural gas, when compared to other fuels such as coal, led to cheaper rates for Entergy’s customers in other states.
FERC ruled in 2005 that under what is called Entergy’s “System Agreement,” Louisiana customers deserved a refund to make the costs roughly equal for all the utility’s customers. But the order was not implemented until June 2007.
The PSC sought refunds going back to 2005. The D.C. Circuit Court of Appeals agreed and, on Thursday, FERC ordered Entergy to comply and refund back to 2005.
“This proves that tenacity works to the benefit of Louisiana ratepayers,” PSC Chairman Jimmy Field, of Baton Rouge, said late Thursday shortly after being informed of the order by email.
Field said the PSC legal actions in the “System Agreement” case have now caused about $1 billion in refunds for Entergy’s 1 million customers in Louisiana.
New Orleans-based PSC Commissioner Lambert Boissiere, whose district also includes much of Baton Rouge, said in a prepared statement late Thursday: “This is a big victory for Louisiana due to, among other things, Louisiana ratepayers experiencing high natural gas and electricity bills during and after (Hurricane) Katrina.”