Entergy bonuses: 20% live in state

Thursday, October 31, 2013

Fewer than one in five of the Entergy Corp. employees who qualify for incentive packages that will be funded in part by Arkansas customers of the utility actually live in the state, company executives told the state Public Service Commission on Wednesday.

Entergy Arkansas is proposing that about $7.8 million in incentives be funded by its Arkansas customers. Only 144 of the 782 employees who are eligible for stock options or restricted stock awards are Arkansas residents, Entergy Arkansas acknowledged.

The utility had not provided specifics on the breakdown for incentive payments before Wednesday.

“It was along the lines of what we anticipated,” said Shawn McMurray, senior assistant attorney general. It is not appropriate for Entergy Arkansas customers to have to pay for those incentives, McMurray said.

The attorney general’s office has recommended that the commission not allow Entergy to charge customers to pay for incentives or bonuses for executives that are based on financial criteria not tied to providing utility service.

Entergy Arkansas sought a rate increase of $178 million in March, but since has reduced that request to $145 million.

However, Entergy Arkansas’ approximately 700,000 customers will see a decrease in their monthly bills because of reductions in rates when the utility withdraws from Entergy Corp.’s system agreement on Dec. 19 and also joins a regional transmission organization.

If its rate request is approved, Entergy Arkansas estimates that residential customers will see a 2.21 percent drop in their monthly payments, said Sally Graham, a company spokesman. So a customer who normally has a $100 monthly bill will have a bill of $97.79.

The commission’s general staff has proposed that the commission approve a rate request of about $109 million instead of $145 million.

Residential customers would see a 3.62 percent decrease in their monthly bills under the staff’s proposal. So a customer with a $100 monthly bill would have a bill of $96.38 if the commission agrees with the staff’s recommendation.

The commission staff estimates Entergy Arkansas’ rates will drop by $121 million when it no longer is part of Entergy’s system agreement.

The system agreement is a cost-sharing pact among Entergy Corp.’s six subsidiary utilities. Federal regulators have required Entergy Arkansas’ customers to pay more than $4.5 billion in costs unrelated to energy charges since 1985. Entergy Arkansas informed Entergy Corp. in 2005 that it would leave the system agreement this year.

Testimony before the commission ended Wednesday. A final round of public comments in Entergy’s rate case will be taken in Batesville on Nov. 7.

The commission is expected to make a decision on the Entergy Arkansas case by the end of the year.

Business, Pages 25 on 10/31/2013