1/14/10 Independent Audit Again Shows No Inappropriate Charges by Entergy Mississippi

Horne audit second to confirm company properly accounted for costs

Jackson, Miss. – An independent audit of Entergy Mississippi, Inc.’s fuel and purchased energy findings shows no inappropriate charges by the company to its customers. It is the second independent audit ordered by the Mississippi Public Service Commission to confirm that Entergy Mississippi has properly accounted for fuel and purchased energy costs.

"We’re pleased that the audit did not find any costs to be imprudent,” said Bob Grenfell, vice president of regulatory affairs for Entergy Mississippi, Inc. “We take pride in the way we operate our business and take seriously our obligation to serve our customers.

“We’re also happy this second audit repeats the findings of the first--that we are treating our customers fairly.”

The Horne audit is a financial audit. Another firm, McFadden Consulting Group, is conducting an operations audit.

The Mississippi attorney general filed a lawsuit against the company in 2008 that relates to how Entergy Mississippi purchases power. The suit claims that the company is paying too much for these power purchases. The MPSC, in seeking to better understand how utilities purchase fuel and energy, ordered independent audits of both Entergy Mississippi and Mississippi Power Company, two of the state’s larger power providers. In addition, the MPSC ordered an earlier audit of Entergy Mississippi by Vantage Consulting of Cudjoe Key, Fla.

“We recognize the need for the commission to audit and confirm our practices and costs are correct,” said Grenfell. “After two costly audits and thousands of staff hours and other resources, we’re hopeful the positive results from both provide the commissioners with confidence in our business practices and decisions so we can all move forward.”

The audit by Horne LLP, an auditing and accounting firm, investigated Entergy Mississippi’s total fuel and energy purchases from October 1, 2007 through September 30, 2009. The audit report questions the recovery of approximately $11 million through the Entergy Mississippi fuel adjustment clause. Most of these costs are related to nuclear fuel, environmental compliance, coal handling and power plant operating and maintenance costs. These identified costs represent less than one percent of the $1.6 billion Entergy Mississippi spent on fuel and purchased energy during the two-year audit period to provide energy to its customers.

“The audit report does not question the prudence or legitimacy of those costs—it just questions whether those costs should be recovered by Entergy Mississippi through some mechanism other than the fuel adjustment clause,” said Grenfell. “It’s a question of where the costs should appear on a bill and does not challenge our accounting for these costs.”

Entergy Mississippi believes the costs are in the appropriate accounts.

“Our fuel recovery practice is a time-tested process closely overseen by the MPSC for more than 30 years,” he said.

Entergy Mississippi’s electricity rates are among the lowest in the southeast and are currently at their lowest level in about six years due largely to low fuel costs. Fuel costs are passed through directly to customers, dollar-for-dollar, with no profit to the company.

Entergy Mississippi, Inc. provides electricity to more than 433,000 customers in 45 counties. It is a subsidiary of Entergy Corporation. Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. 

Entergy Mississippi’s online address is entergy-mississippi.com.