Arkansas Democrat-Gazette

Complaint filed against Entergy

Utility regulators in 2 states say ratepayers owed refunds

- NOEL OMAN

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.”

 ?? (AP file photo) ?? The nuclear power plant in Grand Gulf, Miss., is shown near the flooding Mississipp­i River in 2011. The plant’s performanc­e has been below industry standards since 2012.
(AP file photo) The nuclear power plant in Grand Gulf, Miss., is shown near the flooding Mississipp­i River in 2011. The plant’s performanc­e has been below industry standards since 2012.

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