Regional electrical utility Entergy Corp. said Tuesday the Justice Department is investigating its competitive practices in four states where it is a major power provider.
The investigation covers subsidiaries with a total of about 2.7 million customers: Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans and Entergy Texas. Also involved is Entergy Services Inc., which provides shared services to all of the utilities, such as engineering.
Besides being a large electricity provider in the four states, Entergy owns five nuclear power plants in New York, Massachusetts, Vermont and Michigan that sell power on the spot wholesale market.
Entergy said in a regulatory statement that the investigation involves power procurement, dispatch and transmission system practices, along with policies of its utility units. It did not provide more details, but said it is cooperating with the probe and believes its operations "have satisfied all applicable laws and regulations."
Justice Department spokeswoman Gina Talamona said the agency had no comment on the disclosure.
Mississippi Attorney General Jim Hood said Tuesday be believes the Justice Department is investigating allegations he made in a December 2008 lawsuit against Entergy. Hood alleges that Entergy overcharged customers by buying electricity from its sister companies at a higher rate than on the open market, then passing the inflated costs along to consumers.
Hood said he requested a federal investigation in late 2009.
The suit is pending in federal court. Entergy has called Hood's claims "irresponsible, without merit, a waste of taxpayer money and harmful to the state's business reputation."
Entergy spokesman Chanel Lagarde said the company received formal notification of the probe on Sept. 24 but could not comment further.
Entergy said it first became aware of the investigation while the Justice Department was conducting an antitrust review of its proposed purchase of one of the generators of the Acadia power plant at Eunice, La. Entergy said the Justice Department did not file an objection to the deal, which is still pending.
The Louisiana Public Service Commission was informed of the investigation Tuesday, said PSC member Foster Campbell. He said he would demand that the company provide "full disclosure" of the investigation at a PSC meeting on Wednesday.
Foster said he believed Entergy should have informed the PSC immediately after receiving formal notification from the Justice Department. "A Justice Department investigation is serious business," he said.
Entergy shares closed down 33 cents at $76.81.