Entergy Arkansas announced Thursday that the power company’s residential customers would “receive a one-time bill credit of approximately $78” in August, stemming from a settlement Entergy reached with utility regulators in Arkansas, Mississippi and New Orleans. Commercial and industrial customers will also get credits. The settlement concerns the operation of Entergy’s Grand Gulf nuclear power plant in Mississippi.
Entergy’s press release makes it sound as if they’re being magnanimous and giving customers something extra. It quotes Ventrell Thompson, vice president of customer service for Entergy Arkansas: “We know that higher costs for groceries and other everyday living expenses can be tough for some of our customers, especially during the summer months. We are pleased that the timing of these bill credits will allow our customers to spend their money on other needs, such as back-to-school shopping.”
Here’s a more accurate framing: Entergy is returning money to customers that the company never should have collected in the first place. And Entergy doesn’t mention that they’re only returning a fraction of money they improperly took from customers, thanks to a sweetheart deal they got on the settlement.
In a complaint originally filed in 2017, utility regulators in Arkansas, Mississippi and Louisiana alleged that Entergy and its subsidiaries mismanaged the Grand Gulf plant, resulting in customers in all three states being overcharged by hundreds of millions of dollars. Mississippi settled its part of the lawsuit in June 2022 for $300 million, but Entergy offered Arkansas only $142 million. The Arkansas Public Service Commission, then headed by Ted Thomas, rejected the offer. In a filing with a federal regulator in August 2022, the state regulator said Entergy’s settlement offer was “a low-ball amount”
But as the Arkansas Times reported last year, the Public Service Commission in November accepted an offer from Entergy nearly identical to the one it rejected a year before. The about-face came after after Gov. Sarah Huckabee Sanders appointed former state GOP chairman Doyle Webb as head of the commission in January 2023. (There were also rumors that Sanders’ father, Mike Huckabee, got involved in the settlement process on behalf of Entergy.)
While Entergy and the state both touted the settlement, the $142 million represented a little more than a third of what the state and customers stood to recoup if the case had gone to trial. As we reported at the time:
Daniel Tait, a spokesperson for the Energy and Policy Institute, calculates that Arkansas stood to receive roughly $418 million if the state had continued the litigation. Collectively, the three states and the city of New Orleans asserted $1.16 billion in claims against Entergy, Tait explained – a $361 million claim for “imprudent operation” of the Grand Gulf nuclear plant between 2016 and 2020, primarily for what is known as “replacement energy,” and an $800 million claim related to an overall decrease in energy output from the plant from 2012 to 2020. Arkansas would have received 36% of any recovery in that suit, a higher percentage than either Mississippi or Louisiana.
That amounts to about $276 million that Arkansas may have left on the table, according to Tait.
Entergy Arkansas said last December that $100 million of the settlement would be rebated to its approximately 730,000 retail customers. As we wrote in March about this settlement and another case Entergy lost in federal court, that works out to roughly $140 per customer, or $160 when additional, related reimbursements were taken into account.
The $78 the company announced today is quite a bit less than that, but commercial and industrial customers have one-time bill credits coming as well. “Small General Service customers will receive a credit of approximately $221, and Large General Service customers will receive a credit of approximately $12,158,” the press release said.