Entergy 2009 Annual Report Download - page 80

Entergy Corporation and Subsidiaries
Notes to Financial Statements
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The APSC also established a separate docket to consider the resolved railroad litigation, and in February
2010 it established a procedural schedule that concludes with testimony through September 2010. The APSC may
set a hearing in a future order, if necessary.
Entergy Gulf States Louisiana and Entergy Louisiana
In Louisiana, Entergy Gulf States Louisiana and Entergy Louisiana recover electric fuel and purchased
power costs for the upcoming month based upon the level of such costs from the prior month. Entergy Gulf States
Louisiana's purchased gas adjustments include estimates for the billing month adjusted by a surcharge or credit that
arises from an annual reconciliation of fuel costs incurred with fuel cost revenues billed to customers, including
carrying charges.
In August 2000, the LPSC authorized its staff to initiate a proceeding to audit the fuel adjustment clause
filings of Entergy Louisiana pursuant to a November 1997 LPSC general order. The time period that is the subject
of the audit is January 1, 2000 through December 31, 2001. In September 2003, the LPSC staff issued its audit
report and recommended a disallowance with regard to an alleged failure to uprate Waterford 3 in a timely manner.
This issue was resolved with a March 2005 global settlement. Subsequent to the issuance of the audit report, the
scope of this docket was expanded to include a review of annual reports on fuel and purchased power transactions
with affiliates and a prudence review of transmission planning issues and to include the years 2002 through 2004.
Hearings were held in November 2006. In May 2008 the ALJ issued a final recommendation that found in Entergy
Louisiana's favor on the issues, except for the disallowance of hypothetical SO2 allowance costs included in affiliate
purchases. The ALJ recommended a refund of the SO2 allowance costs collected to date and a realignment of these
costs into base rates prospectively with an amortization of the refunded amount through base rates over a five-year
period. The LPSC issued an order in December 2008 affirming the ALJ's recommendation. Entergy Louisiana
recorded a provision for the disallowance, including interest, and refunded approximately $7 million to customers in
2009.
In January 2003, the LPSC authorized its staff to initiate a proceeding to audit the fuel adjustment clause
filings of Entergy Gulf States Louisiana and its affiliates pursuant to a November 1997 LPSC general order. The
audit will include a review of the reasonableness of charges flowed by Entergy Gulf States Louisiana through its fuel
adjustment clause in Louisiana for the period January 1, 1995 through December 31, 2002. Discovery is underway,
but a detailed procedural schedule extending beyond the discovery stage has not yet been established, and the LPSC
staff has not yet issued its audit report. In June 2005, the LPSC expanded the audit period to include the years
through 2004.
Entergy Mississippi
Entergy Mississippi's rate schedules include an energy cost recovery rider that is adjusted quarterly to reflect
accumulated over- or under-recoveries from the second prior quarter.
In July 2008 the MPSC began a proceeding to investigate the fuel procurement practices and fuel adjustment
schedules of the Mississippi utility companies, including Entergy Mississippi. A two-day public hearing was held in
July 2008, and after a recess during which the MPSC reviewed information, the hearing resumed on August 5, 2008,
for additional testimony by an expert witness retained by the MPSC. The MPSC's witness presented testimony
regarding a review of the utilities' fuel adjustment clauses. The MPSC stated that the goal of the proceeding is fact-
finding so that the MPSC may decide whether to amend the current fuel cost recovery process. In February 2009 the
MPSC published a final report of its expert witness, which discussed Entergy Mississippi's fuel procurement
activities and made recommendations regarding fuel recovery practices in Mississippi.
In addition, in October 2008 the MPSC issued an order directing Entergy Mississippi and Entergy Services
to provide documents associated with fuel adjustment clause litigation in Louisiana involving Entergy Louisiana and
Entergy New Orleans, and in January 2009 issued an order requiring Entergy Mississippi to provide additional
information related to the long-term Evangeline gas contract that had been an issue in the fuel adjustment clause
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