Entergy System Agreement – Production Cost Equalization

On behalf of the Council of the City of New Orleans (CNO), ERG staff have provided expert testimony before the Federal Energy Regulatory Commission (FERC) and litigation support regarding the Entergy System Agreement on issues pertaining to utility operations, utility resource planning, resource allocations, and appropriate accounting treatment. The Entergy System Agreement is a FERC approved rate schedule that governs joint operations and cost sharing among six Entergy Operating Companies: Entergy Louisiana, LLC (ELL), Entergy Arkansas, Inc. (EAI), Entergy Mississippi, Inc. (EMI), Entergy New Orleans, Inc. (ENO), Entergy Gulf States Louisiana, LLC (EGSL) and Entergy Texas, Inc. (ETI). In 2001 the Council of the City of New Orleans and the Louisiana Public Service Commission jointly filed a complaint asserting that the cost allocations embodied in the Entergy System Agreement had become unjust, unreasonable, and discriminatory. ERG staff filed direct testimony in support of the complaint and provided litigation support in depositions, at hearing, and within briefs. FERC concluded that the Entergy System Agreement was no longer just and reasonable and not unduly discriminatory, and that a just and reasonable remedy was required. FERC implemented a remedy that requires annual filings to determine if remedy payments are required among the Entergy Operating Companies. In addition to the annual filings and associated proceedings, numerous additional proceedings at FERC related to the service schedules of the Entergy System Agreement have been precipitated by Section 205 and 206 filings. ERG staff have participated in each of proceedings in various capacities including, developing strategy, discovery, deposition questions and testimony. As each annual proceeding must review the prudence of each of the Entergy Operating Company’s production costs, the issues in each proceeding can encompass all facets of utility planning, operations, and accounting.

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