Texas Court Dismisses Entergy Price-Gouging Case

A class action suit first filed against Entergy in Chambers County, Texas, in 2003 has finally been dismissed by an appeals court. In the case – Entergy Corp. et. al. v. Jenkins et. al. (Case No.: 01-12-00470-CV) – plaintiffs claimed that Entergy Texas and operating company Entergy Gulf States had systematically overcharged ratepayers by a total of nearly $1 billion.

On behalf of the utility’s customers in its 23-county service area, the suit had charged that Entergy violated the terms of the Texas Theft Liability Act by selling both residential and commercial customers expensive power from its own generating plants rather than cheaper power available from other, retail suppliers.

Entergy operates outside the state’s deregulated electricity market, and therefore, as the monopoly supplier, is mandated to provide the lowest-cost power available to its customers

Harking back to the first complaint, Entergy’s legal team had argued that either the Federal Energy Regulatory Commission (FERC) or the Texas Public Utility Commission (PUCT) had jurisdiction over the claims raised by the proposed class – and not the court system. Thus, while the case started as an argument about inflated electricity bills, it devolved into a question about the authority of a state court to interfere with the bulk power arrangements of an interstate power pool.

What’s more, Entergy contended that its rates already had been approved by the state and federal authorities and, therefore, held legal status in the state.

Further, according to an account in Law 360, the company pleaded that the class, itself, never should have been certified, given that the lawsuit alleged excessive charges on 2 million individual accounts over an 18-year period.

The ratepayers, Entergy’s counsel told the court, “have no way to determine on a classwide basis whether there was any theft and, if so, who was damaged and in what amount.”

Finally, after making the rounds of the Texas judicial system for 12 years, the utility found respite in the 14th Court of Appeals, which agreed last November that FERC, and not the courts, had exclusive jurisdiction over the case; because the company’s fuel and purchased-power costs are subjected to scrutiny under the Federal Power Act.

The class then asked the court to reconsider, but after a rehearing en banc, the full court declined on July 28 to change its decision.

In its final opinion, the court said, “”Because Jenkins did not exhaust his administrative remedies by first bringing this dispute before FERC, we hold that the trial court lacks subject matter jurisdiction over the case …. We hold that the trial court erroneously denied Entergy’s motion to dismiss for lack of jurisdiction and that the trial court’s class certification order is therefore void.”

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