The PSC issued an order disallowing the costs associated with the electric generating units in extended shutdown reserve from being recovered in rates.

Nantahala held that cost allocations related to a FERC approved power agreement must be followed by state agencies in setting public utility rates.

In Mississippi Power, FERC had allocated the costs of the Grand Gulf Nuclear Generating Station among various public utility companies.

Applying the Nantahala and Mississippi Power holdings to the Louisiana case, the Court noted that the PSC order impermissibly had the effect of trapping generation costs with the public utility by excluding them from recovery in rates.

The Court then determined that there was no reason to create an exception to the filed rate doctrine for tariffs using this type of clause.