Louisiana Power & Light Co. has agreed to refund to customers $335,000 that was paid to former Judge Edmund M. Reggie for his help in reversing a 1982 Public Service Commission order.

Commissioner John F. Schwegmann of New Orleans made the request Wednesday, after saying the arrangement with Reggie smacked of influence peddling.

The Times-Picayune reported July 23 that LP&L and its parent company, Entergy Corp., had agreed to pay Reggie $1.25 million if he could reverse the order requiring the company to refund $1.7 billion to customers. Under the agreement, Reggie was free to use his own methods to change the PSC order, and Entergy employees didn't want to be informed of how it was done. The utility paid him $750,000 before cutting off the payments in 1986, and charged LP&L customers for $335,000 of that sum.

The case involved money from the settlement of a breach-of-contract case between Texaco Inc. and LP&L. After Texaco reneged on a long-term supply contract in the 1970s, LP&L was forced to buy higher-priced natural gas and passed the cost on to customers.

LP&L received $1.7 billion in damages from Texaco. It used the first $500 million of the settlement money to pay debts and to continue construction of its Waterford 3 nuclear plant in Taft. The commission's order to refund the money [to rate payers] immediately placed the company in danger of bankruptcy, officials said at the time.

LP&L hired Reggie and asked that he lobby the PSC to reverse the decision and approve instead a proposal by Schwegmann that would have allowed the company to keep a big chunk of the natural gas settlement.

Under the proposal, the utility would charge lower electric rates in return for being allowed to use the refund money.

Three weeks after then-Entergy Chairman Floyd Lewis hired Reggie, the commission approved a version of Schwegmann's plan. Reggie received the first $250,000 of his payments by the end of the year, with the promise of $100,000 a year for the next 10 years.

Following the Texaco case, Reggie was contracted to help in other rate cases before the commission.

Entergy cut off Reggie's payments in early 1986, after Lewis retired and it was learned that Reggie was splitting his fee from the Texaco case with former Gov. Edwin W. Edwards.

In a statement given earlier to the Times-Picayune, Entergy officials said Edwards' involvement "created a potential embarrassment to the companies."

"I think that word (embarrassed) fits you best," Schwegmann told LP&L Vice President Shelton Cunningham. "I think the word that fits me, and that fits this commission, if I'm allowed to speak for the commission, is that we are insulted that any utility would have to go out and contract to spend a million dollars to influence a decision of this commission."

Schwegmann said he was personally embarrassed because his name was used by Lewis in the letter outlining Reggie's actions, and repeated his denial of ever having been contacted by Reggie in connection with the Texaco case.

Schwegmann added, however, that he didn't mean to imply that the commission's decision in the Texaco case was incorrect.

No commissioner asked Cunningham on Wednesday what Reggie and Edwards did to earn the money.

Of the five commissioners who voted on the Texaco refund in 1983, three are still members of the commission: Louis Lambert of Gonzales, Tommy Powell of Eunice, and Schwegmann. All have denied ever talking to Reggie or Edwards about the Texaco refund case, as has former Commissioner Ed Kennon of Bossier City. Former Commissioner George Ackel Sr. of Harahan died in 1988.

Cunningham said LP&L will return the $335,000 to customers through the fuel adjustment charge on their next bill.

Cunningham said later that another $30,000 identified as having been charged to customers of New Orleans Public Service Inc. will be refunded as part of that company's fuel adjustment charges.

Because the amounts are so small, customers probably won't notice the change in their bills, he said.

Gary Groesch, executive director of the Alliance for Affordable Energy, a consumer group, said Wednesday that LP&L's refund agreement doesn't go far enough.

"The Texaco settlement needs to be reconsidered," he said. "There should be a full-scale investigation, just to get to the bottom, to get all the facts out."

Endnote

• The Waterford 3 nuclear power plant at Taft, Louisiana (St. Charles Parish) is situated on the Mississippi River about 25 miles upstream from New Orleans and 50 miles downstream from Baton Rouge.

Additional Reading

• Mark Schleifstein,"Refund: How Lobbyist Got $1 Million Deal," The Times-Picayune, New Orleans, July 23, 1989, National, p. A-1.
  
  
• Mark Schleifstein, "Dual Strategy Paid Off, Chief Says," The Times-Picayune, New Orleans, July 12, 1989, Money, p. F-1.
  
  
• Mark Schleifstein, "Embattled Middle South Offers 'Olive Branch'," The Times-Picayune, New Orleans, May 14, 1989, National, p. A-1.