Entergy Antidote?
September 14th, 2006
It’s nice to see that someone professional is taking legal issue with Entergy Corp’s stance that they’re not responsible for any of Entergy New Orleans’ (and its ratepayers’) troubles right now. According to Jim Chen at the Jurisdynamics blog,
Much of the problem arises from Entergy’s understanding of public utility law, one evidently shared by regulators with the authority to carry out this travesty.
Chen holds that Federal Power Commission v. Hope Natural Gas Co, the 1944 Supreme Court case frequently cited as Entergy’s excuse for leaving its subsidiary in the lurch,
emphatically did not dictate that regulators must always permit a utility to earn a rate of return on all of the investments it has historically sunk…Hope and the broader law of economic regulation do entitle Entergy to stay solvent under regulatory ovesight, but no single methodology is binding on ratemakers, let alone one that so odiously transfers wealth in a way as to make Entergy an effective profiteer from the misery wreaked by Hurricane Katrina.
Odious indeed. Ultimately, I’ll have to agree with almost any compromise that prevents a 140% rate increase for us all, including a Community Development Block Grant bailout if that’s all we can do, but I hate to see Entergy’s attitude rewarded without any objection (besides of course the business of human decency, which sadly doesn’t hold much policy weight).
On another note, one of Jurisdynamics’ areas of focus is legal response to natural disasters, so there are some other interesting posts there regarding Katrina-related issues, and it’s worth watching for more.
