By Amanda Durish Cook

FERC last week refused to reconsider how Entergy should calculate ratepayer refunds resulting from Entergy Arkansas’ off-system sales to non-Entergy entities from 2000 to 2009. FERC denied rehearing requests from the Arkansas Public Service Commission, the Louisiana Public Service Commission and Entergy (EL09-61-006).

The order stems from a 2012 ruling requiring the company to make refunds to ratepayers because it improperly allocated lower-cost system energy in off-system energy sales to third-party power marketers and other non-agreement members between 2000 and 2009. The allocation violated the circa-1982 Entergy system agreement, driving up the rates of captive customers of other operating companies by preventing their purchase of the low-cost energy.

Last year, in Opinion 548, FERC ordered a full rerun of Entergy’s intra-system bill that reflects how the purchases should have been priced to determine damages. Final damages have not yet been determined, and the issue is still in hearing procedures. (See FERC Affirms Entergy Refund Order on Off-System Sales.)

The commission also affirmed its 2012 Opinion No. 521, in which it decided that although the opportunity sales in question are not joint account sales — sales to others for the joint account of all of the company’s operating companies — they should be given the same treatment under the company’s responsibility ratio.

It dismissed the Louisiana PSC’s argument that FERC erred in requiring that the opportunity sales load be excluded from Entergy Arkansas’ responsibility ratio because the subsidiary is solely responsible for the sales.

“The Louisiana commission’s interpretation of Opinion No. 521 ignores the commission’s full findings,” FERC said. “Entergy Arkansas should not have to pay for the capacity used to service the opportunity sales if it did not also have the ability to draw upon the cheaper energy for sales to its own load.”

FERC rebuffed the company’s argument that its remedy was “arbitrary and capricious in deviating from the long line of orders” that held that the system agreement granted each operating company first call on the energy from their generation facilities. “The precedent Entergy cites does not interpret the system agreement with respect to the type of off-system sales at issue in this proceeding,” FERC explained.

FERC also found no merit in the company’s argument that the refund methodology is at odds with provisions of the system agreement that prohibit an operating company from simultaneously buying and selling energy. The commission said Entergy failed twice to point out such a provision in its system agreement.

The commission also declined to decide whether payment for damages should be distributed to ratepayers or shareholders, calling it outside of the scope of proceeding.