U.S. District Judge Frank Polozola issued a memorandum opinion on October 24, supporting Gulf States Utilities (GSU) against fraud claims made by Cajun Electric Power Co-op. (CEPP), involving its decision to invest in the River Bend nuclear plant. Judge Polozola will issue detailed reasons for the decision at a later date. (GSU owns 70 percent of River Bend; CEPP owns 30 percent.)
A second phase of the lawsuit involves breach-of-contract claims, but GSU and its parent company, Entergy, say they will attempt to settle all remaining issues. The case has been complicated by CEPP's Chapter 11 bankruptcy filing. CEPP claims the Louisiana Public Service Commission ordered it to lower rates to such a point that the cooperative
became unable to pay off over $4 billion in loans from the Rural Utilities Services. Judge Polozola retains jurisdiction over the bankruptcy proceeding, and will decide major River Bend issues while maintaining overall supervision of the case. t
Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.