FERC sanctioned a partial settlement to resolve many of the New Orleans City Council’s longstanding complaints over management of the Grand Gulf Nuclear Station.

The commission in an Aug. 14 order said Grand Gulf operator and Entergy subsidiary System Energy Resources, Inc.’s (SERI) $116 million partial offer seemed fair and in the public interest (ER18-1182-008).

The settlement resolves numerous grievances New Orleans officials made in 20 FERC dockets related to subpar Grand Gulf operations, ratemaking and tax violations that shifted costs to customers, an unreasonable capital structure and return on equity and excessive costs of the Grand Gulf sale-leaseback renewal. The earliest docket involved in the settlement stretches back to 2017.

The New Orleans City Council settled with Entergy unofficially last spring in a three-part agreement: $116 million to settle allegations around misconduct within SERI; $138 million more to resolve allegations of dubious tax accounting; and lastly, $500,000 to put concerns over reliability to bed. (See Entergy Earnings Call Focuses on La. Resilience Plan, Nuclear Outage and Settlements.)

The partial settlement provides a return on equity moratorium: SERI will use a fixed, 9.65% ROE in monthly sales to Entergy New Orleans that began in June and will continue through June 30, 2026. The agreement also stipulates SERI’s equity ratio in its capital structure won’t exceed 52% in bills to Entergy New Orleans.

Entergy’s operating companies in Arkansas, Mississippi, Louisiana and New Orleans purchase Grand Gulf’s power through SERI. The state public service commissions from the trio of states all have or are on the verge of agreeing to their own settlements with SERI over mismanagement of the southwest Mississippi nuclear plant, with Louisiana the latest to agree to an offer. (See Entergy Touts Louisiana Settlements, Beryl Response in Q2 Earnings.)