By Tom Kleckner

The Federal Energy Regulatory Commission denied the Louisiana Public Service Commission’s request to reconsider Entergy’s allocation of transmission upgrade costs at its Ouachita Power Facility in northeast Louisiana, saying regulators should make their case in proceedings addressing changes to the company’s system agreement.

The Louisiana regulators had requested rehearing of a 2012 order in the matter (EL11-63-001).

At issue is the allocation of $70 million in transmission upgrades necessary to qualify the Ouachita plant as a network resource for Entergy’s operating companies.

Entergy Arkansas purchased the three-unit, 789-MW natural-gas fired facility from Cogentrix Energy in 2008, selling one unit to Entergy Gulf States Louisiana in 2009.

The LPSC contended Entergy Louisiana should not be liable for costs that allowed Entergy Arkansas to receive energy from the Ouachita plant, as the Arkansas utility had received approval to withdraw from Entergy’s system agreement effective in 2013.

In its January 2012 order, FERC said the LPSC’s arguments were premature because the Arkansas utility had not yet left the system agreement. Entergy Arkansas formerly withdrew from the system agreement Dec. 19, 2013, when it was integrated into MISO’s footprint.

In denying the LPSC’s request for a rehearing, FERC said the LPSC failed to support its contention that the pre-withdrawal allocation of the plant’s transmission upgrade costs could not be justified. “As Entergy has explained, until Entergy Arkansas’ departure from the system agreement, the Ouachita plant provided benefits to all operating companies.”

FERC said “the fact that planning of the Ouachita plant acquisition occurred after Entergy Arkansas provided notice of intent to withdraw from the system agreement does not provide a basis for treating it differently from other system resources for the purpose of allocating associated transmission costs.”

The LPSC contended the 2012 order violated section 306 of the Federal Power Act, which requires a public utility to answer a complaint filed by a state regulatory commission. FERC countered by saying complainants “bear the burden to prove their allegations under both sections 206 and 306 of the FPA, irrespective of the FPA section 306 requirement.”

FERC’s denial said the LPSC had “misread” section 306 and said the section “provides a public utility that is the respondent to a complaint with two options: it may either (1) ‘satisfy’ the complaint or (2) answer the complaint in writing.” FERC said the LPSC’s misreading “has the effect of improperly shifting the burden of proof to a respondent” and that Entergy had fulfilled its obligations under section 306.

FERC said it saw no reason its findings conflicted with cost-causation principles and said “the appropriate forum for the Louisiana commission to raise issues regarding cost causation with respect to the post-withdrawal period was in the proceedings addressing changes to the system agreement following Entergy Arkansas’ withdrawal.”