Three regulatory bodies are demanding answers on FERC’s apparent delay in addressing a complaint over the management of a southwestern Mississippi nuclear plant.
Attorneys for the Louisiana Public Service Commission, Arkansas Public Service Commission and Council of the City of New Orleans filed a motion Monday to again request FERC schedule a hearing on a complaint alleging maladministration at the 1,428-MW Grand Gulf nuclear station (EL21-56).
The regulators asked for a remedy for Entergy subsidiary System Energy Resource, Inc.’s (SERI) “significant customer harm arising from years of imprudent operations and mismanagement.” They pointed out that their original complaint was filed almost a year ago, on March 2, 2021.
“Nearly every other complaint filed in the commission’s docket year 2021 has been acted upon by the commission in some manner, yet this complaint is still pending initial commission review,” lawyers for the regulators wrote.
The regulators reminded FERC that it has a duty under the Federal Power Act to act swiftly on complaints and said the D.C. Circuit Court of Appeals “has expressed dismay at the lengthy time lags experienced by litigants before the commission.”
“What constitutes a ‘reasonable’ time to conclude a controversy may vary with the circumstances of each case; however, it is not reasonable for the commission to take over a year to evaluate whether or not a complaint merits further investigation,” the regulators said, adding that they aren’t aware of any reason for FERC’s delay.
The bodies said they have supplied the commission with supporting evidence and sworn affidavits that could be used in a FERC investigation.
Grand Gulf station is the nation’s largest nuclear reactor. Entergy sells the output at wholesale to its Arkansas, Louisiana, Mississippi and New Orleans subsidiaries.
Last year’s complaint described “imprudent operation” and “subpar performance” at Grand Gulf and sought refunds and rate reform on more than $1 billion in costs passed on to Entergy customers.
The regulators tapped Critical Technologies Consulting (CTC) to investigate the plant’s operations from 2012 to 2020. They said CTC uncovered costly safety issues and substandard output performance. They also said Entergy inappropriately used an outdated economic analysis in 2012 when it decided to undertake approximately $800 million worth of construction to bulk up the plant’s capacity.
The Louisiana PSC said the uprate work paradoxically led to diminished electricity production from Grand Gulf. Entergy customers often found themselves paying for the plant’s full fixed investment and operating costs in addition to replacement energy sourced from other plants, the New Orleans City Council said. The regulators said Grand Gulf’s frequent outages drove shortages and upped energy prices in the MISO markets.
The Nuclear Energy Institute’s data indicates Grand Gulf is the worst-performing nuclear plant in the nation, with a 66.3% capacity factor from 2018 to 2020. The plant’s last-place finish is well below the 77.9% capacity factor of Michigan’s Fermi 2, the other least-reliable unit.
The regulators estimate that their ratepayers are owed about $361 million for the added expense of Grand Gulf outages from 2016 to 2020. They also want the 2012 upgrades investigated and possibly refunded.
“We promised New Orleanians that we would hold Entergy accountable over their responsibility to provide reliable, affordable power to their ratepayers,” New Orleans Council President Helena Moreno said last year. “Grand Gulf is the single largest energy resource for the city of New Orleans, and we need it to be operating safely, at full capacity, and at a reasonable cost. We are asking FERC to help us get that plant running efficiently again as well as seeking refunds to make it right by our people.”
“Entergy customers deserve a full look at the potential imprudent management of Grand Gulf and, eventually, appropriate refunds if it is found that Entergy passed unnecessary costs onto those customers,” then-Louisiana PSC Chairman Craig Greene said.
Entergy said it doesn’t see anything amiss with the yearlong wait.
“While we don’t typically comment on pending litigation, this is a large, complex case, and we do not believe there has been any undue delay in setting the case for hearing. Further, we dispute the allegations that we have not prudently operated and managed Grand Gulf. In fact, this past year, Grand Gulf achieved all-time plant records for both gross generation and net generation in megawatt-hours,” Entergy spokesperson Mike Bowling said in an emailed statement to RTO Insider.
Bowling said in 2021, Grand Gulf’s net generation was nearly 12 million MWh, while its gross generation surpassed the 12 million MWh mark.
Entergy had not responded to requests for comments at press time on the year-long delay or how it plans to react should FERC set a hearing in the matter.
Grand Gulf’s unit power sales agreement with Entergy’s member companies is at the heart of another ongoing FERC complaint (EL20-72). In that docket, Louisiana, New Orleans, Arkansas and Mississippi regulators have accused Entergy and SERI of massaging accumulated deferred income tax numbers to overcharge customers for Grand Gulf’s sale-leaseback arrangement and recovering in rates through the sales agreement the costs of lobbying, image advertising and private airplane use.
In recent testimony, Entergy Vice President of Regulatory Services Joshua Thomas characterized the proceeding as a “kitchen sink” complaint, covering “a wide range of complex subject areas over a 30-year time period.” Thomas said the retail regulators “claims are vague, and the requested relief is undefined.”
Entergy maintains it doesn’t include below-the-line costs in ratemaking and that no over-collection occurred.
