New Orleanians will have a new natural gas company in the next several weeks, after a recently formed company, Delta Utilities, officially takes control of Entergy New Orleans’ gas business. On Monday (June 16), representatives from the company told the New Orleans City Council that the transition should be seamless for customers – whose accounts will automatically transfer to the new company on July 1.
“We are focused on living out our mission of providing safe, reliable, affordable natural gas to our customers and the communities we serve,” Delta Utilities CEO Tim Poché told the council.
The transition has been in the works for months since the City Council approved the sale of Entergy’s gas utility, which serves approximately 108,000 customers, to the private equity-backed company in December. Delta Utilities, which was created by Bernhard Capital Partners in late 2023, has also acquired Entergy’s gas utilities in Baton Rouge and CenterPoint Energy’s gas utilities across southwest and north Louisiana – quickly making it one of the largest natural gas providers in the state.
According to Poché, customers should have already received notices by mail and email of the upcoming transition. At this point in time, customers don’t need to do anything else – just wait for their first bills to arrive. At that point, they will be given instructions for how to create new online accounts with Delta Utilities, but they will not need to pay deposit to set up the accounts. Those who are enrolled in auto-pay, an estimated 25-30% of customers, will also need to re-enroll.
The biggest change, according to Delta Utilities, will be that customers will now receive two bills – one for gas, one for electricity – as opposed to the one Entergy bill they received before.
“Customers will pay for any gas usage before closing on their normal Entergy bill, and after closing, customers will pay for gas under Delta Utilities,” Sarah McLaughlin Porteous, vice president of communications for the company, told the council.
Porteous also said that there will be customer service representatives available via phone or at in-person customer care centers located on Canal Street and inside the Liberty Bank on General DeGaulle Drive.
During the debate leading up to the sale last year, some critics of the deal raised concerns over what it would mean to have a private equity-owned firm running the city’s gas utility, arguing that the typical private equity playbook — designed to maximize profit for investors — involves dramatic cost cutting and re-organization that could potentially lead to a decrease in quality of service.
The council’s utility advisers also raised concerns over whether the sale – which would involve a massive capital investment from Delta Utilities – would ultimately increase natural gas customers’ bills.
But representatives from Delta Utilities insisted that they had ambitions to responsibly run the utility over the long term – and ultimately pledged not to raise customers’ rates for 15 months following the transition. The council, in its approval, also limited the amount of transition costs that could be passed down onto customers.
Still, at the joint meeting of the council’s Utility, Cable, Telecommunications and Technology and Climate Change and Sustainability committees, concerns over whether customers might face increased bills came up again.
Councilmember Oliver Thomas asked what Delta Utilities’ plan is for managing volatile gas markets, which could potentially dramatically increase customers’ bills.
“What does that mean for Delta Utilities?” Thomas asked.
Poché said that Delta Utilities has a long-term strategy that involves buying gas during the summer, when it is typically cheaper, and storing it. He also said that the company has long-term agreements for buying gas at fixed prices.
“Between fixing the gas price at a certain level and being able to take advantage of cheaper costs in the summer months, also avoiding volatility and risk, we try to strike the right balance,” Poché said. “We take very seriously our responsibility to deliver oil and gas reliably.”
Jesse George, the New Orleans policy director for the Alliance for Affordable Energy, which opposed the Delta Utilities purchase, also raised concerns about the company’s plans for major capital improvements to the gas system — costs that are often passed along to ratepayers — which wasn’t covered in Monday’s presentation.
“It certainly seems that Delta has a robust communication strategy in terms of making people aware of the transition from Entergy to Delta Utilities,” George said. “One thing I don’t see in their presentation is a discussion of their capital investment plans. … And I would encourage you as regulators to begin demanding transparency from Delta so that in 15 months, ratepayers aren’t hit with a surprise rate increase.”