FERC on Thursday ordered hearing and settlement procedures in a dispute between Entergy and its customers over the company’s accounting for income taxes and post-retirement benefits in its formula rates tariff (ER16-1528).
The commission said the dispute raised unresolved factual issues and that Entergy’s proposed formula rate changes may be unjust and unreasonable. It made the changes effective June 2015 and June 2016 but suspended them pending the settlement proceedings. The order consolidated two dockets, ER15-1436 and ER15-1453, with ER16-1528.
The multiple dockets stem from February 2013, when Entergy first filed proposed transmission formula rate templates to recover its transmission revenue requirements as a MISO member. The proposed rates were modeled on MISO’s Tariff but incorporated practices established under Entergy’s previous tariff for its operating companies.
In July 2015, Entergy reached a partial settlement on the formula rate templates with several customers, including the South Mississippi Electric Power Association and Arkansas Electric Cooperative Corp. By then, however, Entergy had already proposed two changes to the rate templates related to income taxes and retirement costs that were not reflected in the settlement.
The customers protested, contending that the changes did not reflect established practices under the Entergy tariff and were unsupported by its “grossly deficient” filing. They said Entergy’s claim for recovery of $612.7 million in prepaid pension costs was unjustified and could increase its transmission revenue requirement by $8 million annually.
Entergy said the pension costs would increase rates by only $1.3 million per year.
— Tom Kleckner
