Customers are the audience as Hood takes on Entergy

Published 12:00 am Sunday, March 1, 2009

An attorney general, as champion of the people, empowers private attorneys to use the state’s name to sue blue-ribbon corporations and demand compensation for harm.

In this edition, the AG is Jim Hood. The corporation is Entergy Mississippi, which has the exclusive franchise to sell electricity in most of a 45-county area in the western half of the state.

A problem for Hood, in his second term and now the lone Democrat elected to statewide office, is that some of the higher-profile attorneys who have been hired by him and by Mike Moore, his predecessor, have confessed corruption in unrelated cases and are now doing hard time instead of enjoying the tens of millions they received by virtue of winning billions (yes, billions) for the state treasury.

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That, plus the fact that two of them, Richard “Dickie” Scruggs and Joey Langston, were campaign ATMs for Moore or Hood or both adds an “icky lawyers, they’re scum” element to the story.

It’s also a point Entergy is pressing in defense of its sanctity as an open, honorable, fair-dealing, investor-owned public utility.

Further, Entergy Mississippi President Haley Fisackerly says, the allegations of fraudulently inflating rates plus harsh statements and demands being made by the Mississippi Public Service Commission, may cause investors to become skittish and lenders who finance fuel purchases to charge more. The net effect of a populist politician seeking to curry public favor by trashing their company, they imply, may be to make electricity more expensive for the Joe Paychecks for whom Hood says he’s working.

Other state officials try to stay away from such frays. But they sure don’t mind spending the money the cases generate, including Scruggs’ 1997 settlement with Big Tobacco that is to provide up to $4 billion. The MCI back taxes cases Langston settled in 2005 netted the Legislature $34 million just in time to pay off the loan guarantees made in its famous beef plant misadventure.

Hood, however, goes into orbit when he reads Entergy’s press releases about the case.

“Please don’t let this be reduced to some thing about lawyers and fees,” he said, adding that none of the private attorneys or expert witnesses in this case have donated to him in any way, shape or form.

He said the contract with Mobile attorney Vincent Kilborn is a public record. The case, Hood said, will cost at least $2 million to pursue, which his office doesn’t have and the Legislature will not allocate. Fees for expert data analysis are hundreds of dollars per hour and the attorneys will net from 14 percent to 25 percent, depending on how far the case goes. If there’s a whopper verdict, the 25 percent figure declines, he said.

Entergy has retained a Jackson firm to work with in-house counsel. The case was filed in state court, moved by Entergy to federal court and Hood said he will seek to have it moved back to state court. Unless something unexpected happens, there will be no decision for about three years.

To say the meat of the issue is complex is an understatement.

Entergy Inc. is based in New Orleans and sells power in four states through an array of subsidiaries that make, market and meter electricity sold to millions of customers, 435,000 in Mississippi. Hood says he can prove eight separate instances of manipulations he believes have violated the utility’s “compact” with its customers.

That compact has two components. One is that in exchange for the state giving the business an exclusive market and guaranteeing it will be allowed to make money, the company should make full operational disclosures. Second is that it will provide the most reliable energy at the least expensive cost.

Fisackerly has repeatedly called Entergy “transparent” and notes that the state and federal authorities actually empowered to monitor everything it does have deemed the company fully in compliance.

Not so, responds Hood, saying Entergy’s own documents — at least those made available so far — as well as consent orders in Louisiana and Texas cases provide all the evidence needed to show a pattern of consumer abuse.

Those cases, Entergy says, involved clerical errors and any added costs in Mississippi have been extremely light.

Hood anticipates the litigation will yield “hundreds of millions of dollars,” including punitive damages.

Entergy says Hood is risking Mississippi’s business-friendly reputation.

Hood says businesses will not come here unless they don’t think someone’s watching the power company and blocking unjustifiably high utility bills.

We all know the script, the characters and the stakes.

The unknown is how it all plays out.


Charlie Mitchell is executive editor of The Vicksburg Post. Write to him at Box 821668, Vicksburg, MS 39182, or e-mail