Entergy Corp. sold power to Mississippi in 2005 from a subsidiary under a fuel contract that years earlier led to a refund of $72 million to Louisiana customers, the company has acknowledged in a letter to state officials.

The letter helps affirm the case being made by Mississippi Attorney General Jim Hood that Entergy and its subsidiaries illegally manipulated the purchase of fuels to make electricity to maximize profits.

Hood’s fraud and antitrust lawsuit, filed in December, accuses Entergy of buying electricity from sister companies at a higher rate than it could on the open market, then passing the inflated costs along to consumers.

Entergy is based in New Orleans and operates many subsidiaries, including Entergy Mississippi, which sells electricity to 433,000 customers in 45 counties.

A statement from Hood’s office said the admission came when attorneys for Entergy told the Public Utilities Staff and counsel for the state Public Service Commission that the company was mistaken when it said the activities in Louisiana did not affect Mississippi ratepayers.

A letter to the Commission dated Thursday quoted in Hood’s release read, “…in the course of the companies’ continuing review of the facts in connection with this matter Entergy Mississippi and Entergy Services now have reason to believe that beginning in January 2005 energy produced by the Evangeline (Louisiana) gas contract has been sold into the Entergy exchange and may have an effect on the costs paid by Entergy Mississippi customers.”

Separate from the letter, Entergy Mississippi announced that residential electric bills will drop 14 percent for January through March.

The first quarter fuel adjustment approved by the PSC is the third reduction since a nationwide spike in natural gas prices pushed bills 28 percent during July and August. Typical residential usage, pegged at 1,000 kilowatt hours, will translate into a bill totaling about $89. Due to the spike in natural gas, that same amount of electricity would have cost about $133 last summer, a company release said.

“This fuel adjustment provides further relief to customers, which is especially important during these tough economic times,” Entergy president and CEO Haley Fisackerly said in a statement.

In Hood’s release, Fisackerly is taken to task for broadcast statements in October about the Louisiana case having little relevance to Mississippi ratepayers and the company’s cost of doing business in Mississippi.

Hood’s lawsuit, pending in Hinds County, also charges that Entergy has made false statements to the PSC, the three-member elected panel designated by state law to regulate public utilities. Hood alleges the company has padded its invoices since 1974 and has sold its customers in Mississippi the highest-priced power available in its four-state system.

Entergy Mississippi files possible fuel adjustments quarterly with the Public Utilities Staff and the PSC to reflect the market effect of fuel on its power-generating facilities. Both the staff and commission have 45 days before the start of the affected quarter to review the filing and make changes before it goes into effect. By law, the utility makes no profit on fuel charges.

In total, Entergy owns and operates power plants with about 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy sells electricity to 2.6 million utility customers in Arkansas, Louisiana, Mississippi and Texas.

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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com.