Entergy Arkansas, Inc. v. Arkansas Public Service Commission
2011 Ark. App. 453
| Ark. Ct. App. | 2011Background
- ATU and Entergy have long-standing Facilities Agreements; Entergy owns/maintains equipment on ATU’s side of the meter and indemnity provisions exist.
- During 2009 renovations ATU signed a Facilities Agreement with indemnity clause or risked losing Entergy’s behind-the-meter facilities.
- ATU filed PSC complaints (Aug 2009) alleging indemnity clause violated Art. 12, §12 and unlawfully waived sovereign immunity, seeking reform of all Agreements.
- Entergy contended the Facilities Agreements are part of a PSC-approved tariff and that the filed-rate doctrine allows continued provision of services.
- ALJ Order No. 9 (May 13, 2010) held the indemnity clause irreconcilable with Art. 12, §12, non-severable, rendering agreements void; PSC affirmed later, staying the effect; Entergy appealed.
- Court reviews de novo for constitutional construction and affirms PSC’s ruling that indemnity conflicts with Art. 12, §12; issues beyond that ruling not reached as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does indemnity clause violate Art. 12, §12? | ATU argues indemnity contravenes Art. 12, §12 and sovereign immunity. | Entergy contends public-welfare exception allows indemnity; the indemnity clause is part of a state-regulated tariff. | Yes; indemnity conflicts with Art. 12, §12 and is not saved by the public-welfare exception. |
| Does public-welfare exception apply to educational facilities? | ATU asserts no public-welfare basis; clause invalid. | Entergy argues facilities serve public educational purposes. | No; educational purposes are not within the public-welfare exception of Art. 12, §12. |
| Is the indemnity provision severable from the Facilities Agreements? | If severable, remaining contract could survive. | Indemnity is integral/non-severable. | Indemnity is irreconcilable and non-severable; agreements void and unenforceable in their entirety. |
| Does filed-rate doctrine affect the outcome? | ATU relies on formulation within a PSC-regulated tariff. | Agreements part of the applicable tariff; filed-rate doctrine applies. | Court treats doctrine as less central given constitutional conflict; focus is on Art. 12, §12. |
| Are other issues moot after dispositive ruling? | N/A | N/A | Yes; remaining issues moot where indemnity ruling dispositive. |
Key Cases Cited
- CenterPoint Energy, Inc. v. Miller County Cir. Ct., 370 Ark. 190 (2007) (filed-rate doctrine relevance in rate-regulation context)
- Nettleton Sch. Dist. v. Owens, 329 Ark. 367 (1997) (mootness and scope principles in agency decisions)
- Flow Doc, Inc. v. Horton, 2009 Ark. 411 (2009) (limits on advisory opinions and mootness in review)
- Lavaca Tel. Co. v. Arkansas Pub. Serv. Comm’n, 65 Ark.App. 263 (1999) (procedural review under PSC—notice of rehearing)