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By Wesley Brown
Arkansas News Bureau

LITTLE ROCK -- a Little Rock-based consumer group is looking into possibly challenging Freedom of Information-excepted powers held by state regulators that shield utilities' records from the public eye.

If successful, the group believes current talks between the staff of the Arkansas Public Service Commission and Entergy Corp. officials could provide important information concerning utility rates hikes in the state, said Rick Peltz, assistant professor of law at the University of Arkansas-Little Rock's William H. Bowen School of Law.

"Their main argument is that the provision is too broad," said Peltz, who said the group wanted to remain anonymous until it decides whether or not to challenge the statute.

Since the beginning of the year, state regulators and Entergy Corp. officials have been locked in closed-door talks in hopes of pushing back an upcoming rate review case that is scheduled for Feb. 26.

The meetings also include discussions about the utility's $155 million ice storm cost recovery case and how the state will dispose of a $120 million fund set up in 1997 to help Entergy pay its so-called stranded costs.

According to Arkansas Code Annotated 23-2-316 of 1987, information from those talks are protected from FOI queries at the discretion of state regulators.

"Whenever the commission determines it to be necessary in the interest of the public or, as to proprietary facts or trade secrets, in the interest of the utility to withhold such facts and information from the public, the commission shall do so," the statute states.

Peltz said the statute gives the PSC too much power and perhaps the broadest discretion of any state agency in keeping records from the public review.

"This provision, which apparently applies to all PSC records, seems to give the commission virtual carte blanche authority to withhold any record, purely based on the basis of an internal agency justification," Peltz said, citing an article in the Arkansas Law Review. The law journal is published quarterly by the University of Arkansas School of Law.

However, Michael Teague, spokesman for Attorney General Mark Pryor, said the statute does not prohibit the public from submitting a challenge to the provision.

"If they want to get access to records, then there is nothing stopping them," Teague said. "It is up to the PSC to articulate their reason as to giving an exception."

Teague said in most cases there are usually some records that will not be available for public consumption such as "trade secrets and other proprietary information."

John Bethel, executive director of the PSC, was not available for comment concerning the meetings between his staff and Entergy.

However, he said last month that the PSC staff and Entergy officials are exploring a number of alternatives to possible litigation.

"Our objective is that (Entergy's) customers get reasonable rates, safe and reliable service, and that the utility gets a reasonable return" on profits, Bethel said. "If we do come to an agreement, then we will present it to the commissioners for approval."

The PSC has already postponed a scheduled hearing because the commission's staff needed more information from Entergy in an audit of the utility giant's books. That hearing has been rescheduled for March 6.

James Thompson, spokesman for Entergy Arkansas Inc., said on Wednesday that talks with state regulators are ongoing.

"There are a lot of issues we are covering so it may be another couple of weeks before discussions are completed," Thompson said, but provided no details of possible progress. Thompson said the utility's decision of whether or not settle the rate review case or enter into possible litigation depends on the actions of the PSC staff.

"We have had no word from them" on the rate case, Thompson said. "They will make their final decision and present their findings to us ... and then we will decide what we will do." In April, Entergy asked the commission for approval of the $155 million "energy rider" to recoup losses it suffered during two crippling ice storms that hit the state in December 2000.

The stranded cost fund was established more than five years ago in advance of the state's deregulation rules. Then, in 1996, the commission and the utility agreed to put aside Entergy's excess profits to help pay off its anticipated stranded costs.

Since then, the PSC has urged the Legislature to delay until at least 2010 full deregulation or repeal altogether a law that calls for retail electric competition. The three-member panel said its studies showed that consumer electricity rates would almost certainly increase and that the price of power from Entergy, which has some 640,000 customers across the state, would increase more than 13 percent.

Meanwhile, the commission has determined that Entergy's profits from 1997 to 1999 were about $109 million above what is allowed by Arkansas law. With interest, that fund has grown to more than $120 million.

If Entergy was able to use those funds to offset its storm recovery cost, that would cut the utility's losses to $25 million, Thompson said.

Entergy's last rate case before the PSC was in 1996.