FERC last week affirmed an administrative law judge’s 2014 ruling finding fault with Entergy’s accounting in in its fourth annual bandwidth filing (ER10-1350).

The commission agreed with much of the judge’s order, which found Entergy did not properly include the fuel inventory balance as an input to the bandwidth formula for the 2009 test year and failed to include accumulated deferred income tax for its Waterford 3 nuclear plant west of New Orleans. The judge also ruled Entergy made an error in its accounting for the amortization period for the sale and leaseback of Waterford 3.

FERC gave Entergy — which was joined by the Arkansas and Louisiana commissions in intervening — 60 days to make a compliance filing.

Also last week, FERC denied the Louisiana Public Service Commission and Entergy’s request for a rehearing of its December 2014 order, which set for hearing and settlement judge procedures the use of Waterford 3’s accumulated deferred income tax in the bandwidth remedy (EL10-65).

Entergy’s allocation of production costs among its half-dozen operating companies under its system agreement has been a source of continuing disagreement.

The companies essentially operate as one system, although each has different operating costs. Payments are made annually by Entergy’s low-cost operating companies to the highest-cost company in the system, using a “bandwidth” remedy that ensures no operating company has production costs more than 11% above or below the system average.

Regulators in Entergy’s states have regularly challenged the annual bandwidth filings, which began in 2007.

— Tom Kleckner