PSC approves Entergy’s plan to shift $1.4B in Hurricane Ida repairs to customers
The Louisiana Public Service Commission approved Entergy’s plan to have its more than 1 million customers in the state pay $1.4 billion to improve the company’s grid and repair damage wrought by Hurricane Ida.
The change will result in an average increase of $5.50 on Entergy customers’ monthly bills for the next 23 years and comes on top of the $10 per month fee the utility imposed on customers last year to cover the $3.2 billion in damage Hurricanes Laura, Delta and Zeta cause in 2020.
State law allows Entergy and other utilities to recoup repair costs through rate increases for customers.
The measure passed on a 3-2 vote along party lines with the commission’s two Democrats opposed.
Republican Commissioner Craig Greene of Baton Rouge sponsored the compromise deal, which uses a tax maneuver to reduce rate payers’ obligation by $180 million from what the utility originally proposed. The compromise requires the utility to credit ratepayers upfront with the income tax benefits the company would earn over the 23 years of the plan and assume the risk that the tax code might change and those benefits may never be realized.
“Ultimately it provides certainty through upfront guaranteed savings and reducing the overall amount paid by customers, and it requires Entergy to get a little dirt on their jersey, so this is good news for all, ” Greene said.
“We think it's a fair balance and provides a significant reduction in the upfront amount to be securitized,” Phillip May, president and CEO of Entergy Louisiana said.
Commissioners Eric Skrmetta of Metairie and Mike Francis of Crowley, also Republicans, joined Greene to vote in favor of the measure.
Chairman Foster Campbell of Elm Grove and the newly-elected Commissioner Davante Lewis of Baton Rouge, both Democrats, voted against the deal.
Campbell expressed frustration that Entergy, Louisiana’s largest utility provider, had not explored the cost-saving option when the commission first considered the company’s proposed rate increase last month. The commission delayed action on the proposal into the new year against the utility’s objections.
“It was troubling last time to see you had this big rate increase and there was nothing you could do about it,” Campbell said. “But I’ll be damned, a little arguing here and there and fighting back and forth and today I’ve got a reason to save a little money.
Campbell questioned whether the company could find more savings for customers.
“One month we argued with you and now you brought it down $180 million,” Campbell said.
Lewis said the increase would hit low-income customers the hardest.
Lewis, who capitalized on customer frustrations to unseat 17-year incumbent Lambert Boissiere last year, challenged Entergy officials to commit to reviewing and auditing its storm recovery process to ensure that the changes customers pay for will result in a hardened electrical grid that is less vulnerable to future storms.
“If I’m going to be honest, the displeasure of the public with your company is by far the biggest reason why I’m sitting up here on this dais,” Lewis said. “So for me, this high price tag requires very strict scrutiny, and I’m very curious about how we are going to go above and beyond to prepare for the storms that are coming in so we’re not doing this process every three years.”