Complaint filed against Entergy
Utility regulators in 2 states say ratepayers owed refunds
The Arkansas Public Service Commission and two Louisiana utility regulators say the Entergy Corp. subsidiary that operates the troubled Grand Gulf nuclear power plant has “violated the obligation of prudent management” to the extent that ratepayers in both states are owed refunds worth hundreds of millions of dollars.
The questioned costs include $360 million in “drastic and continued degraded performance due to this mismanagement” and at least some of the $800 million spent in 2012 to upgrade Grand Gulf, according to the complaint, which was filed March 2 with the Federal Energy Regulatory Commission.
The amount ratepayers could see in a refund, including the the precise amount owed to customers of Arkansas Entergy, remains to be determined.
“The excessive amounts assessed to ratepayers as the result of System Energy’s imprudence are difficult to quantify without discovery, but amount to hundreds of millions of dollars,” according to the complaint.
The complaint was filed by the Arkansas Public Service Commission, the Louisiana Public Service Commission and the New Orleans City Council against System Energy Resources Inc., the Entergy Corp. affiliate that operates Grand Gulf; Entergy Services LLC; and Entergy Operations Inc. as well as their parent company, Entergy Corp.
Entergy Arkansas is obligated to purchase 36% of the power it produces, said Donna Gray, executive director of the Arkansas Public Service Commission. She supervises the general staff separate from the staff of the three-member commission.
“Our commission is always involved in watching regulatory issues at the federal level that could impact Arkansas ratepayers,” Gray said. “And so they’re active in that forum and there have been ongoing cases before [the Federal Energy Regulatory Commission] since Grand Gulf first went into service in challenges in differing regards about how that unit performed and what the distribution of the costs should be.”
Entergy and other affiliates which must purchase power from Grand Gulf pay costly rates because the plant is operated inefficiently and shuts down too often, according to the complaint.
“Commencing in 2016, Grand Gulf’s performance deteriorated dramatically, driving its all-in costs to consumers to extremely high lev
els,” it said. “The exorbitant cost levels reflect the failure of management to produce electric output from the plant at a level anywhere near a normal level for nuclear power plants in the United States, and safety issues that have required unplanned shutdowns and significant expenditures.”
The independent Nuclear Regulatory Commission, which monitors the safety of the nation’s nuclear power plants, released a statement three days after the complaint was filed announcing its annual performance letters to the 94 commercial nuclear reactors under its jurisdiction.
Ninety of the reactors “reached the highest performance category,” according to the agency, which rates the reactors in four categories.
Reactors in Missouri, Illinois and Virginia fell into the second performance category, which requires them to resolve one or two items of “low safety significance,” the agency said, adding it will require them to undergo an additional inspection and have a followup of corrective actions.
Grand Gulf was placed in the third performance category with what the agency called a “degraded, and still acceptably safe, level of performance.” Oversight will include additional inspections, senior management attention and oversight focused on the reason for the degraded performance.
Michael Bowling, an Entergy spokesman, said regulatory rules didn’t permit him to comment on the complaint, but he defended the operation of Grand Gulf.
“We are investing in our Grand Gulf facility to position it for many years of safe, secure and reliable operations,” he said in an email. “In 2020, we invested in significant upgrades, replacing the plant’s turbine control system to extend the life and efficiency of the facility.
“In late 2020, the plant experienced operational issues related to that upgrade, including unplanned shutdowns and time spent off the grid. We’ve worked to identify the related issues, implemented a maintenance outage and conducted additional training for our team.”
Bowling said Grand Gulf had no problems last month when snow and ice slowed or stopped power production at many other power plants throughout the South.
“The team operated Grand Gulf at 100 percent power throughout the recent unprecedented winter storms, providing much needed carbon-free electricity to customers,” he said. “The plant boasts more than 860 highly trained professionals who are committed to continuous improvement and becoming the premier nuclear fleet. Entergy remains committed to Grand Gulf for the long term as part of its carbon-free portfolio.”
The Arkansas Public Service Commission and the other regulators who filed the complaint say they don’t want to shut down Grand Gulf “as it provides clean baseload electricity when it operates,” they said in the complaint.
“Rather, the retail regulators seek to have the plant returned to reliable service at just and reasonable rates.
“Although its costs are usually above market even at full output, the unit can provide large, stable quantities of energy without emitting carbon dioxide and other greenhouse gases.”