​Grand Gulf Nuclear Station, which provides power to Entergy Louisiana & Entergy New Orleans customers in Louisiana, is a notoriously unreliable reactor that has suffered numerous safety and operational issues since starting operations in 1982, ultimately costing ratepayers billions of dollar ​in unjustifiable costs.
“NOPSI management sat on it’s hands for 10 years. They watched Grand Gulf cost come up and they simply put all their chips on forcing Grand Gulf’s costs down the throats of New Orleans ratepayers," said Alliance for Affordable Energy's Co-Founder, Gary Groesch. 

From the start, Grand Gulf has a long and legendary history of imposing inordinate costs on ratepayers. By the time construction of Grand Gulf was completed, the cost of the plant had increased from a projected total cost of $1.2 billion for both units to an excess of $3 billion for one unit. A FERC administrative law judge found that between now and 1993 the total amount which ratepayers will incur for Grand Gulf power will be $3 billion more than if the power were generated from existing units.
Who Owns Grand Gulf?
Construction on Grand Gulf in Port Gibson, Mississippi began in the 1970s. In 1974, Entergy Mississippi determined that they could not finance the unit independently, so Middle South Energy, Inc. was created to own and construct the unit. Middle South Energy's name was changed to System Energy Resources, Inc. (SERI) in the late 1980s. Grand Gulf Nuclear Power Station is the only power plant SERI owns.


The costs of Grand Gulf were to be born by it’s four subsidiaries: Arkansas Power and Light, Mississippi Power and Light, Louisiana Power and Light, and New Orleans Public Service Incorporated (now known as, Entergy New Orleans). Eventually, Arkansas Power and Light, retracted their commitment to purchase some of the energy from Grand Gulf, putting the remaining burden to the other subsidiaries, and ultimately New Orleans ratepayers. 

On March 2, 2021, the New Orleans City Council, Louisiana Public Service Commission, and Arkansas Public Service Commission filed a formal complaint against System Energy Resources (SERI), Entergy Services, Entergy Operations, and Entergy Corporation alleging that SERI has violated the obligation of prudent utility management in operating the Grand Gulf nuclear unit, resulting in large overcharges to its four affiliated customers, including Entergy Louisiana and Entergy New Orleans. 

The lawsuit demonstrates a history of failures that together have resulted in ratepayers being saddled with $1 Billion in unreasonable and excessive costs.
​

History of Failures

Frequent Outages

As reported by Michael Issac Stein for The Lens, "from 2016 through 2018, nuclear plants in the US produced about 92% of their maximum generating capacity on average, according to the US Energy Information Administration. But over that same period, Grand Gulf, plagued by persistent outages, produced only 55.5% of its capacity. 

According to a recent filing by the New Orleans City Council, Grand Gulf’s problems are continuing. Grand Gulf was offline for more than three weeks in late July and early August of 2022. Every week Grand Gulf was down that summer cost New Orleanians between $7-12 million.​
When Grand Gulf is experiencing an outage, it forces the operating companies to acquire replacement energy at much higher cost than the Grand Gulf energy cost, even as they continue to pay the enormous fixed costs of the unit. According to figures compiled by the Nuclear Energy Institute, Grand Gulf was top three in the least reliable nuclear plants in the U.S. from 2019-2021.

Safety Issues

Grand Gulf has been subject to heightened safety review by the Nuclear Regulatory Commission (NRC) to a far greater extent than most nuclear power plants. The Complainants’ expert concluded that Grand Gulf is in the bottom 5% of the U.S. nuclear fleet with regard the Nuclear Safety Performance. More shocking is the NRC’s finding in 2018 that "deliberate" violations of safety protocols occurred at Grand Gulf.

As a result of System Energy’s imprudent operation of the plant and Grand Gulf’s poor safety performance, significant mitigation costs have been imposed on ratepayers. 

Imprudent Costs

In 2012, despite the already high costs imposed on ratepayers by Grand Gulf, SERI (the entity that owns Grand Gulf) elected to expend an additional approximately $800 million to uprate Grand Gulf. For this $800 million, SERI should have obtained 160 additional megawatts (MW); however, an ill-conceived sale/leaseback transaction resulted in the uprate increasing SERI's owned capacity by only about 142 MW.

In addition to the millions of dollars wasted, outages, and safety issues, Sam Karlin from the Advocate reported that regulators also allege that "Entergy improperly assessed ratepayers for various expenses." 
Those expenses include "$1.6 million of private airplane travel, lobbying expenses, advertisements promoting Entergy and industry association dues" (The Advocate). The lawsuit at FERC found that in total ratepayers have been saddled with more than $1.1 billion in unreasonable and excessive costs. ​​​

The Complaint at FERC

The basic principle underlying the complaint is that ratepayers should not have to continue to pay exceedingly high costs for consistently degraded and imprudent performance, or for the costs of SERI's continual safety violations. 

More specifically, the consequences of the imprudent operation of the Grand Gulf plant include:
  1. Entergy operating companies have been required to purchase replacement energy at a cost much higher than the low nuclear fuel cost of Grand Gulf, even as they continue to pay the enormous fixed costs of the unit.
  2. Unplanned shutdowns have disrupted regional energy supplies in the Midcontinent Independent System Operator ("MISO") region, causing shortages and cost increases in the region.
  3. SERI has incurred substantial costs attempting to comply with the NRC requirements and increased oversight required to mitigate its failure to adequately address safety issues, a cost imprudently incurred and improperly passed through to consumers.
  4. SERI incurred increased costs attempting to address operational issues stemming from mismanagement, these increase costs also are charged to consumers.  ​

New Orleanians Deserve Better


​​The complainants are seeking a modification of the Unit Power Sales Agreement (UPSA) to:
  1. Tie cost recovery to Grand Gulf's performance level going forward
  2. Secure refunds for costs that would not have been incurred but for SERI’s imprudent management actions
  3. Adopt a new ratemaking procedure for SERI to ensure that adequate economic analysis of alternatives is performed prior to making major new investments in Grand Gulf
​
EFNO has been working diligently for years to hold corporate utilities like Entergy accountable for profiteering at the expense of Louisiana ratepayers. There are few clearer examples of Entergy’s malfeasance as an energy provider than its over-charging ratepayers for ‘maintenance’ of the barely functional Grand Gulf Station because of uncertainty over its tax liability. 

We urge that the FERC, LSPC, and CNO continue to press Entergy on issues pertaining to Grand Gulf to ensure that ratepayers are made adequately whole with these refunds. EFNO looks forward to continuing its work with regulators and policymakers to ensure that Entergy does not avoid its obligations to ratepayers as established by this decision.
​

Follow the Lawsuit

JANUARY 2023

Emergency motion in response to Entergy's Press Release
January 3, 2023

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The Louisiana Public Service Commission, New Orleans City Council, and Arkansas Public Service Commission (together, the "Retail Regulators") have issued an emergency motion in response to Entergy's "blatantly incorrect" press release about the Grand Gulf FERC decision.
In it's press release issued on December 26, 2022, Entergy asserted "that System Energy Resources, Inc. (SERI) owes $0 to consumers in refunds for SERI's failure to include decommissioning liability Accumulated Deferred Income Tax (ADIT) balances in rate base during the period 2004 to the present." Basically Entergy is suggesting that it has made investments that have reduced costs/passed on “savings” to ratepayers well beyond what FERC is saying they owe in refunds.

However, as stated by the Retail Regulators in their motion, "The position Entergy asserts in its press release is a blatant and perhaps intentional misrepresentation of the Commission's Orders."

The Retail Regulators are requesting "that the Commission immediately issue a press release or explanatory statement confirming that SERI owes additional refunds for its violation of Commission tax normalization requirements."

DECEMBER 2022

Entergy Issues a Press Release
December 26, 2022

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Entergy issued a press release on December 26, 2022 asserting "that System Energy Resources, Inc. (SERI) owes $0 to consumers in refunds for SERI's failure to include decommissioning liability Accumulated Deferred Income Tax (ADIT) balances in rate base during the period 2004 to the present." Basically Entergy is suggesting that it has made investments that have reduced costs/passed on “savings” to ratepayers well beyond what FERC is saying they owe in refunds.

Despite Entergy’s incorrect claims otherwise, Louisiana and New Orleans ratepayers served by Entergy should expect to be issued hundreds of millions of dollars in refunds.

FERC Sides with the LPSC in it's complaint against Entergy
December 23, 2022

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The Federal Energy Regulatory Commission (FERC) released a decision siding with the Louisiana Public Service Commission (LPSC) in its dispute against System Energy Resources, Inc. (SERI), a subsidiary of Entergy Corporation (Entergy). FERC's decision reaffirms regulatory and advocate concerns that Entergy has systematically overcharged ratepayers across the states of Arkansas, Mississippi, and Louisiana for over two decades for costs related to its ownership, and mismanagement, of the Grand Gulf Nuclear Station in Port Gibson, Mississippi.​

​This ruling is a huge victory for the people of Louisiana, and the Alliance applauds the Louisiana Public Service Commission (LSPC) and the New Orleans City Council (CNO) for its leadership in pursuing this outcome. As a result of this decision, and despite Entergy’s claims otherwise, Louisiana and New Orleans ratepayers served by Entergy should expect to be issued hundreds of millions of dollars in refunds.

June 2022

Entergy offered a $588M settlement to end allegations at Grand Gulf. Should Louisiana agree? By Sam Karlin
June 23, 2022

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Check out this article by Sam Karlin, originally published on The Advocate on July 7, 2022:
Amid wide-ranging allegations that it soaked ratepayers for inflated costs at its troubled Grand Gulf nuclear power plant, which serves customers in three states, Entergy has struck a settlement with Mississippi, agreeing to refund the state $300 million. But it’s not yet clear if regulators in Louisiana will opt into the deal, and some officials are skeptical.

The Alliance's take: This plant has been a problem from the jump. Louisianans are owed far more than this pittance and we’re glad to see regulators in the state indicate the same sentiment.

March 2021

LPSC, CNO & APSC File Formal Complaint with FERC
March 2, 2021

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On March 2, 2021, Louisiana Public Service Commission, Arkansas Public Service Commission, and Council of The City of New Orleans, Louisiana (Complainants) filed a formal complaint against System Energy Resources (SERI), Entergy Services, Entergy Operations, and Entergy Corporation alleging that SERI has violated the obligation of prudent utility management in operating the Grand Gulf nuclear unit, resulting in large overcharges to its four affiliated customers, including Entergy Louisiana and Entergy New Orleans. 

The basic principle underlying the complaint is that ratepayers should not have to continue to pay exceedingly high costs for consistently degraded and imprudent performance, or for the costs of SERI's continual safety violations. ​

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