By Amanda Durish Cook

FERC last week granted Entergy permission to exclude from its system-wide “bandwidth” calculation the above-market portion of the price paid for electricity under two power purchase agreements with generators certified under the Public Utility Regulatory Policies Act and Louisiana’s Renewable Energy Pilot Program (ER14-1640).

The March 17 ruling came despite a protest from the Louisiana Public Service Commission, which contended it was excluded from the settlement agreement.

The decision does not alter the actual value of Entergy Gulf States Louisiana’s PPAs with the Rain CII Carbon calcined petroleum coke facility in Sulphur and the Agrilectric rice hull-fueled power plant in Lake Charles. Rather, the commission is allowing Entergy to internally “re-price” the contracts to accommodate the “bandwidth” process the company uses to ensure that none of its subsidiaries have production costs 11% above or below the company average.

Supporters of Entergy’s position said the company’s re-pricing approach prevents the costs of local and state policy initiatives — such as renewable mandates — from being exported to other jurisdictions. However, the Louisiana PSC called the re-pricing practice “unduly discriminatory” to Entergy Gulf States Louisiana and its customers, which will incur increased costs to cover the entire above-market portion of the contract prices.

The PSC also called the settlement procedure an “abuse” because it only included parties that agreed with Entergy’s original 2014 filing.

FERC disagreed.

“We note that the settlement, and the proposed revision it approves, establishes a policy that is applicable to all similar renewable energy PPAs entered into by any of the participating Entergy operating companies,” FERC said. The commission added that Entergy entered into the PPAs “to meet the requirements of the [Renewable Energy Pilot] Program for the benefit of Entergy Gulf States Louisiana’s customers, rather than for the benefit of the Entergy system as a whole.”