NEW ORLEANS - The New Orleans City Council has joined the Louisiana Public Service Commission and the Arkansas Public Service Commission (together the “Retail Regulators”) to file a complaint at the Federal Energy Regulatory Commission (“FERC”) against Entergy Corporation, Entergy Services, Inc., Entergy Operations, Inc. and System Energy Resources, Inc. (together “Entergy”).
The Retail Regulators are seeking refunds and rate reform related to over $1 billion in costs imposed on Entergy customers across New Orleans, Louisiana, Arkansas, and Mississippi due to Entergy’s poor management of the Grand Gulf Nuclear Station.
The complaint is the culmination of over a year of work by the Retail Regulators to gather information regarding the causes of the degraded performance of Grand Gulf Nuclear Station. The Retail Regulators jointly retained Critical Technologies Consulting, LLC (“CTC”), an independent consulting firm with widely respected nuclear expertise, to investigate the operations of the plant from 2012 through 2020. CTC’s investigation found significant evidence of imprudent plant management that led to safety issues and poor performance. Among other things, the Retail Regulators concluded:
- That Grand Gulf’s safety performance has been far below national averages, causing significant mitigation costs to be imposed on consumers as a result of System Energy’s imprudent operation of the plant.
- That Grand Gulf's performance since 2012 has been below industry standards, and since 2016 has been far below average levels for the U.S. nuclear fleet - performing on average 30% less effective than other nuclear plants in the U.S..
- Evidence that Entergy imprudently relied upon outdated economic analysis when it made the decision to invest in an $800 million project in 2012 to increase the size of the plant.
“We promised New Orleanians that we would hold Entergy accountable over their responsibility to provide reliable, affordable power to their ratepayers,” said Council President Helena Moreno. “Grand Gulf is the single largest energy resource for the city of New Orleans, and we need it to be operating safely, at full capacity, and at a reasonable cost. We are asking FERC to help us get that plant running efficiently again as well as seeking refunds to make it right by our people.”
When Grand Gulf experiences an outage and is not producing power, Entergy must acquire replacement energy to serve customers. In this scenario, Entergy customers are paying both for the high fixed costs associated with the operation of Grand Gulf and the additional energy purchased to replace what Grand Gulf failed to provide.
The Retail Regulators estimate the additional cost of the Grand Gulf outages to customers over 2016 - 2020 to be approximately $361 million, of which approximately $71.1 million was paid by New Orleans customers. This amounts to approximately $153 in increased costs for each Entergy New Orleans residential customer.
Chief of Staff, Office of Helena Moreno