BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION. COMPLAINANT V. Docket No C

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1 BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION ARKANSAS TECH UNIVERSITY COMPLAINANT V. Docket No C ENTERGY ARKANSAS, INC. RESPONDENT ARKANSAS TECH UNIWRSITY S POST-APPEAL MOTION TO STAY OR IN THE ALTERNATIVE PETITION FOR TEMPORARY INJUNCTION COMES NOW, Arkansas Tech University, and in support of its Post-Appeal Motion to Stay or in the Alternative, Petition for Temporary Injunction, states as follows: 1. On June 22, 2011, the Arkansas Court of Appeals in Case No , upheld the decision of the Administrative Law Judge in Order No. 9 and the Public Service Commission in Order No. 13, that a requirement that Arkansas Tech University indemnify Entergy in Entergy s Additional Facilities Agreement, violates Article 12, 012 of the Arkansas Constitution. 2. Pursuant to Rule 5-3 of the Rules of the Supreme Court, a decision of the Court of Appeals is not final until the time for filing a Petition for Review or a Petition for Rehearing has expired. Under Rule 2-4 of the Rules of the Supreme Court, a Petition for Review must be filed within eighteen calendar days from the date of the decision. In this case, the decision of the Court of Appeals in Case No would become final on Tuesday, July 12, On June 6, 2011, counsel for Arkansas Tech University wrote to Entergy s counsel seeking assurance that in the event that Entergy s appeal in CA was unsuccessful, Entergy would continue to provide electrical power and service behind the meter without 1

2 interruption to the Arkansas Tech University campus in Russellville. A copy of this letter is attached as Exhibit A. 4. On June 10, 2011, counsel for Entergy responded that, Entergy legally would not be permitted to provide the same service under the same contracts with the indemnification provision removed and that absent a stay, continued service in the near term may require separate metering of the campus. A copy of this letter is attached as Exhibit B. 5. Arkansas Tech University, as a customer of an electric utility, is unable to initiate a rate case to take any other action that would address the illegal indemnification provision, and thus far, Arkansas Tech University is unaware of any attempt by Entergy to initiate such a proceeding. In summary, Arkansas Tech University is powerless to change Entergy s tariff to make it comply with the law. 6. It is noteworthy that on page 18 of Order No. 20 of Docket No U, which contained the settlement of that Entergy rate case, Entergy agreed that, issues related to contract indemnification provisions for State agencies would be addressed in Docket No C Failure of Entergy to continue to provide electric service and service behind the meter to Arkansas Tech University without interruption would be catastrophic. Students and other groups who contracted with the University for housing, and who were residing on campus would be constructively evicted, temperature sensitive equipment would be destroyed, and summer classes would not be able to be conducted. In essence, all operations on the Arkansas Tech University campus in Russellville would cease. 8. Separate metering of the campus is not an option. With the Arkansas Court of Appeals decision in , of Entergy s Additional Facilities Agreements with & state agencies suffer from the same illegality as the one between Entergy and Arkansas Tech 2

3 University. There is nothing in the June 10, 2011, letter from Entergy s counsel indicating that all (or any) of the other state agencies - for example the five other Arkansas colleges and universities who currently take service under Entergy s Additional Facilities Agreement - were going to have to make arrangements for lack of electrical service or service behind the meter or separate metering by July 12, This failure to take similar action against all other state agencies similarly situated is prima facie evidence that Arkansas Tech University is being discriminated against by Entergy in violation of A.C.A. $ , , and A.C.A , all to Arkansas Tech University s detriment and ultimately causing Arkansas Tech University to suffer irreparable harm. 10. The Commission has the authority to issue an injunction or issue an order to prevent Entergy from taking actions that will result in irreparable harm. See A.C.A. $ and Allied Telephone Co. v. Arkansas Public Service Comm n, 239 Ark. 492, 504, 393 S.W.2d 206, 213 (1965). 11. In Three Sisters Petroleum. Inc. v. Langley, 348 Ark. 167, 175, 72 S.W.3d 95, 101 (2002), the Arkansas Supreme Court stated that there are two criteria a trial court must consider when determining whether or not to issue a preliminary injunction or temporary restraining order: (1) whether irreparable harm will result in the absence of an injunction or restraining order, and (2) whether the moving party had demonstrated a likelihood of success on the merits. 12. As noted in paragraph seven inpa, irreparable harm would occur to the operations of Arkansas Tech University, and consequently to its students in the event Entergy discontinues electric service or service behind the meter to the campus. Additionally, while not conceding 1 Exhibit C, Abstract p, 35. Five other Arkansas colleges and universities are currently taking service under the Additional Facilities Agreement. The largest is UAPB, where we primary-meter the campus, and we own the facilities, and they signed an Additional Facilities Agreement. 3

4 that alternatives are available to Arkansas Tech University, the school has not been apprised by Entergy of the length of time it would take to implement any such alternative. Further, discrimination by Entergy against Arkansas Tech University by making it separately meter but not enforcing the same requirement on all other similarly situated state agencies would cause Arkansas Tech University to suffer irreparable harm. 13. Arkansas Tech meets the second criteria for issuance of an injunction - likelihood of success on the merits - by the factual composition of this case. The Additional Facilities Agreement that Entergy required Arkansas Tech University to sign prior to providing service behind the meter contained an unconstitutional requirement of indemnification which rendered the contract void. Arkansas Tech University is without the ability to correct this illegality, while in the meantime, other similarly situated entities are being provided this service. Entergy is discriminating against Arkansas Tech University in a two-fold manner. First, versus other state agencies that also have this agreement but are not being threatened with cessation of services by July 12, Second, Entergy is wronghlly discriminating against Arkansas Tech University versus other Entergy customers for whom Entergy has taken the appropriate steps with the Arkansas Public Service Commission to legally be able to provide electric service as well as service behind the meter. 13. This issue - the issue of indemnification of private utility companies by Arkansas state agencies - is both significant and pervasive. This case is more than just a customer versus a utility. The issue of Article 12, $12, and its prohibition against indemnification, affects not only Entergy, but potentially all electric utilities and all other regulated utilities that fall under the purview of the Arkansas Public Service Commission. 4

5 14. As immediate relief, Arkansas Tech University respectfblly requests that the stay issued by the Commission in Order No. 10 be continued until revised Entergy contracts, tariffs, rates, schedules and all other necessary documents are approved by the Commission. In the alternative, Arkansas Tech University respectfblly requests that an injunction be issued prohibiting Entergy from discontinuing electric service or service behind the meter to Arkansas Tech University and that Entergy be ordered to initiate within thirty days the necessary proceeding before the Arkansas Public Service Commission to revise its contracts, tariffs, rates, schedules and all other documents necessary to bring Entergy into compliance with Order No. 9, Order No. 13, and CA Arkansas Tech University prays that a hearing be set on these matters immediately. WHEREFORE, for the above-stated reasons, Arkansas Tech University prays that the Commission grant the relief requested herein, and for all other appropriate relief. Respectfblly submitted, Arkansas Tech University n By: Ark. Bar No University Counsel Arkansas Tech University Admin. Bldg. Room 21 1 Russellville, AR (479)

6 Certificate of Service I, Thomas W. Pennington, do hereby certify that a copy of the foregoing instrument was served upon the following via U.S. mail, postage prepaid and via electronic mail, this 28th day of June, : Ms. Tucker Raney traney@,entergy. com Entergy Arkansas, Inc. P.O. Box 551 Little Rock, AR Paul B. Benham, I11 benham@,fridavfirm. com Robert S. Shafer s hafer@, fri d ay fir m. co m 400 West Capitol Avenue, Suite 2000 Little Rock, AR Ms. Valerie F. Boyce. ~ a l e ~ ~ ~ ~ ~ ~ o ~ ~ ~ ~ ~ ~ ~ ~ : ~ ~ a ~ e ~ General Counsel Mr. Kevin Lemley klemley@,p sc. state. ar. us Arkansas Public Service Commission P.O. Box 400 Little Rock, AR

7 UNIVERSITY COUNSEL Administration Building Room 21 I 1509 North Boulder Avenue Russellville, AR phone: fax June 6,201 I Mr. Robert S. Shafer Friday, Eldredge & Clark, LLP 400 West Capitol Avenue, Suite 2000 Little Rock, AR RE: Arkansas Tech University v. Entergy Arkansas, Inc. Arkansas Court of Appeals Case No Dear Mi. Shafer: My understanding from your representations to the Arkansas Court of Appeals on May 25, is that Entergy has no intention of removing the transformers and other behind the meter equipment or discontinuing provision of electric service to Arkansas Tech University, if Public Service Commission Orders No. 9 and Order No. 13 are upheld. To ensure the continuing safety and security of the students, faculty and staff at Arkansas Tech University, I request your written assurance by June 10, that in the event the Entergy appeal in the above-captioned matter is unsuccessful, Entergy will continue to provide electrical power and service behind the meter without interruption to the Arkansas Tech University campus in Russellville, Arkansas. Thank you for your attention to this matter. Thomas W. Pennington University Counsel Arkansas Tech University TWP/cc cc: Kevin Lemley Colin Jorgensen

8 FRIDAY ELDREDGE & CLmIc1.I.P Robert Shafer 1 Attorney Dhct: (KO?) Fax: (601) E-mall: shafe@fridaflrm.com 400 West Capltol Avenue Stille 2000 LllUe Rock. Arkansas June 10,201 1 Thomas W. Pennington University Counsel Arkansas Tech University Administration Building Room North Boulder Avenue Russellville, AR Re: Entergy Arkunsas, Inc. v. Arkansas Public Service Coinzm n and Arkansas Tech University, Court of Appeals No. CA Dear Mr. Pennington: Responding to your letter dated June 6, 2011, Entergy will provide additional facilities service to ATU as long as the existing agreements are in effect. Entergy s position at the oral argument was that if the APSC Orders are upheld, then it would be in the best interests of the parties for the Court to stay the effect of the mandate until the APSC can supervise a transition at ATU away fiom additional facilities service as currently regulated by the tariff If the Court affms the Orders and denies the request for a stay, then upon the issuance of the mandate - which will occur 18 days after the decision unless a party files a petition for rehearing - Entergy legally would not be permitted to provide the same service under the same contracts with the indemnification provision removed. 1 Entergy is prohibited from providing service contrary to its tariff, and the additional facilities agreements would be void by order of the Court. It will require time to work with the APSC toward an amendment of the tariff that would allow for additional facilities service without an indemnification provision consistent with the terms of the Court s order. In the interim, ATU and Entergy will have to make alternate arrangements for ATU to continue to receive electric service to the ATU campus. Entergy s purpose in conditionally requesting a stay at oral argument was to avoid an interruption in service at ATU if the appeal is unsuccessll. However, absent a stay, continued service in the near term may require separate metering of the campus, as James Frye testified at the September 2009 hearing before the APSC. Long-term options would include ATU s purchase of the behind the meter facilities from Entergy or an amended tariff for additional facilities, as noted above, that would not require indemnification but address the consideration provided by the indemnification term. 1 Of course, a party could file a petition for review with the Supreme Court from the decision of the Court of Appeals, together with a renewed request for a stay,

9 Page 2 Entergy is hopefbl of a favorable outcome on appeal. However, as a precaution, 1 suggest that ATU review its options with Mi. Frye for responding to an affirmance if the appellate court declines to issue a stay. With best regards, Sincerely, Robert S. Shafer cc: Tucker Raney Kevin Lemley

10 their facilities. Five other Arkansas colleges and universities are currently taking senrice under the Additional Facilities Agreement. The largest is UAPB, where we primary-meter the campus, and we own the Eacilities, and they signed an Additional Facilities Agreement. (R )... Cross Examinatim by Mr. Pennington: My boss, Troy Castlekq, is the commercial and industrial accounts manager over dl account service managers Eke me throughout Entergy. We is the person at Entergy to whom I: report. (R ) It is my opinion that the Corky engineering expansion needs a new transfomer. The building could not be complete without it. EATU were to purchase everything behind the meter, the price would be what I quoted to Doug when we discussed it for Hughes Hall. A rough estimate is a million-and-a-half to $2 miilioa It is not just transformers. It is conduit and wire, and we have several primary switch gears on campus where we take the conductors and split them among the transformers. It is an entire distriiution system. If you were interested in that option, we would have to do an engineering study on the facility, and then we would give you a )