Opinion ID: 1705462
Heading Depth: 1
Heading Rank: 4

Heading: LPSC Proceedings

Text: During the pendency of the FERC proceedings, and separate from the issue of whether or not a charge for interruptible load should be included in capacity costs, Entergy Louisiana submitted a detailed revenue filing with the LPSC in January, 2004 seeking a retail base rate increase. This filing was based upon 2002 test year data. [8] In May, 2005, the LPSC and Entergy Louisiana, together with intervening parties, agreed to terms regarding Entergy Louisiana's January, 2004 request for retail base rate increase and the retail base rate was changed. As part of that settlement, the LPSC and Entergy Louisiana agreed that the FERC Opinions effective April 1, 2004, [9] would be implemented by the LPSC as delineated in the LPSC's May 2005 retail base rate order as follows: 7. [Entergy Louisiana] shall immediately reflect the prospective rate effects of Order 468 and Order 468-A of the Federal Energy Regulatory Commission in docket No. EL00-66-000, ER00-2854-000 and EL95-33-002 (Consolidated) in accordance with [Entergy Louisiana's] Formula Rate Plan Rider Section 3.A.4. [Entergy Louisiana's] preliminary estimate is that [Entergy Louisiana's] retail customers should receive a $4.1 million decrease and that decrease will be implemented as of the effective date of this Order [May 25, 2005]. [Entergy Louisiana] is further ordered to provide the Commission, no later than July 15, 2005, with a revised estimate of the rate decrease associated with FERC Nos. 468 and 468-A. If the Commission determines that a further prospective change in [Entergy Louisiana's] rates is warranted by the revised estimate, such further change shall be implemented as directed by the Commission and shall be effective as of the effective date of this Order [May 25, 2005]. 8. No later than July 31, 2005, [Entergy Louisiana] shall provide its calculation of the effect of FERC Orders 468 and 468-A on System Agreement charges from April 1, 2004-May 31, 2005. 10. The settlement that we approve is without prejudice to the Commission's position or Entergy's position on whether refunds are appropriate as a result of FERC Orders 468 and 468-A in Docket Nos. EL00-66-0000, ER00-2854-00 and EL95-33-002 (Consolidated), and without prejudice to either party's position on how any prospective rate changes from April 1, 2004 shall be calculated and implemented. 11. [Entergy Louisiana] shall submit responses to the LPSC Staff's discovery requests issued in U-20925 (RRF 2004) [10] on May 6, 2006 as soon as possible, but not later than July 31, 2005 unless the Company is unable to do so for good cause shown. LPSC Order No. U-20925 RRF 2004 Entergy Louisiana, Inc., Ex Parte (May 25, 2005). The LSPC's May 2005 retail base rate order further addressed the issue of a refund for the period from April 1, 2004 through May 24, 2005 to be paid to Entergy Louisiana ratepayers: There remains a dispute between [Entergy Louisiana] and the Commission Staff as to whether any amounts are due [Entergy Louisiana] ratepayers by virtue of Entergy's continued use of interruptible load in determining System Agreement charges from April 1, 2004 (the date of FERC Order 468) and the effective date of this Order. We will address the issue of refunds in a subsequent order after Entergy has responded to the Staff's discovery on this issue, which responses are due no later than July 31, 2005. [11] The fact that [n]o party to this proceeding objects to the terms of this settlement as amended in this Order was memorialized in the May 2005 retail base rate order. [12] After the retail base rate was changed, Entergy Louisiana provided data to the LPSC showing that Entergy Louisiana had received a net refund from the Entergy Operating Companies of $3,296,149.55, effective April 1, 2004, as a result of the FERC Opinions. Further, Entergy Louisiana removed interruptible load calculations from costs charged to its retail customers as of May 25, 2005. This adjustment was based on Entergy Louisiana's interruptible load calculations for 2004-2005, however, and not the 2002 test year data used to set the retail base rate. Because 2002 test year data submitted by Entergy Louisiana was used to determine the change to the retail base rate, the LPSC asked for and received from Entergy Louisiana information showing what the removal of interruptible load calculations using the 2002 test year data would be. After receiving this information, the LPSC's Special Counsel submitted a report to the LPSC, recommending the following: (1) a full refund of interruptible load costs paid by Entergy Louisiana retail customers for the time period of April 1, 2004-May 24, 2005 (effective date of the FERC Opinions through the last day of the then-existing retail base rate); and (2) an adjusted refund, based on 2002 test year data, of interruptible load costs paid by Entergy Louisiana retail customers for the time period of May 25, 2005  September 14, 2005 (effective date of the new retail base rate, based upon 2002 test year data, through the effective date of an LPSC special order regarding the sharing of capacity costs after Hurricane Katrina). [13] The LPSC heard argument on its Special Counsel's report at its March 29, 2006 Business and Executive Session. Entergy Louisiana contested LPSC's authority to make a refund for the period prior to May 25, 2005, arguing that implementation of the FERC Opinions could not be instituted by the LPSC retroactively. Entergy Louisiana also argued that the refund for the period after May 25, 2005 should be based on 2004-2005 data, rather than the 2002 test year data, because the 2004-2005 data reflected actual interruptible load calculations for the time period in which the FERC Opinions were effective. Entergy Louisiana submitted a written response to the LPSC report incorporating these arguments on April 24, 2006. The LPSC again took up the issue of refunds for the two time periods at its Business and Executive Session of April 26, 2006. Entergy Louisiana's counsel stated that the utility's argument had not changed and requested that a hearing be held on these issues. Entergy Louisiana's counsel was given the opportunity to supplement Entergy Louisiana's documents regarding the refunds, but declined to do so. Thereafter, despite its contention that the LPSC had miscalculated the refund due from May 25, 2005 forward, Entergy Louisiana paid a refund to its retail customers in an amount based on 2004-2005 data, effective May 25, 2005 (the effective date of the LPSC's May 2005 retail base rate order). The LPSC issued an order on May 16, 2006 (May 2006 refund order) directing Entergy Louisiana to refund to its retail customers: (1) those sums paid by the retail customers for interruptible load costs from April 14, 2004 through May 24, 2005, which had not been refunded by Entergy Louisiana to its retail customers, and (2) the difference between what Entergy Louisiana refunded to its retail customers for interruptible load costs from May 25, 2005 through September 14, 2005, using 2004-2005 information, and the 2002 test year data. [14] The LPSC stated, in pertinent part: [T]he Commission must determine the appropriate treatment of the refund and any rate reduction [Entergy Louisiana] received for the period April 1, 2004 through May 24, 2005.... [Entergy Louisiana] has quantified the refund for the relevant period to be $3,296,150. [Entergy Louisiana] objects to flowing through this refund to ratepayers, however, arguing that the Commission cannot order the company to flow through a wholesale rate refund relating to a period prior to the Commission's Order [May 25, 2005].... The Louisiana Supreme Court ruled authoritatively on this issue in Dixie Electric Membership Co-op. v. Louisiana Public Service Comm'n, 509 So.2d 1002 (La.1987).... holding that Dixie Electric's possession of the refund amount was a current condition justifying the Commission's flow-through Order.... [T]he implementation of the FERC decision was delayed at Entergy's request.... The Commission brought the interruptible case at the FERC and would not have ignored the retail impact of its victory. Entergy should not be permitted to benefit by its own request for a delay in the implementation of the FERC ruling. LPSC Order No. U-20925-A RRF 2004, Entergy Louisiana, Inc., Ex Parte (May 16, 2006) at pages 6-7. [Entergy Louisiana] asserts that only the going-forward change in MSS-1 receipts, as of 2005, should provide the basis for the additional refund.... The Commission finds that the test year impacts should determine the amount of the refund for the period May 25, 2005 through September 14, 2005. The base rates established on May 25, 2005 reflected conditions in the test year; the only way to adjust these rates properly is to eliminate the interruptible load effects from the test year data. LPSC Order No. U-20925-A RRF 2004, Entergy Louisiana, Inc., Ex Parte (May 16, 2006) at pages 5-6. Entergy Louisiana sought judicial review of the LPSC's order.