After months of complaints from residents about skyrocketing rates, Louisiana-based natural gas provider Delta Utilities appeared before the New Orleans City Council Tuesday to answer questions about its billing structure. Delta Utilities, owned by private equity firm Barnhard Capital Partners, took over as the primary natural gas supplier to the city — and most of Louisiana — after purchasing it from Entergy last July.
In the utility company’s first winter as the primary natural gas provider, customers have reported receiving much higher heating bills – sometimes triple their normal rates. In Louisiana, natural gas is most often used for heating homes and cooking.
“I’ve been to meetings, and I’ve been on the phone with so many [Delta] representatives, and nothing has been consistent,” said one resident, who told company executives her gas bill increased from $30 to nearly $200 in three months.
“Those percentages are very, very high.”
Before a joint meeting of the city council’s Utility, Cable, Telecommunications and Technology, and the Public Works, Sanitation and Environment committees, Delta attributed the increase to higher natural gas prices. Delta Chief Executive Officer Timothy Poché told council members that natural gas prices on the market have substantially increased, and the costs are being passed on to ratepayers.
Poche said that’s despite efforts to offset those price spikes in January, like purchasing gas at the beginning of the month — before Winter Storm Fern drove up prices — and tapping into reserves they purchased in the summer, when prices and demand are much lower.
He did not indicate whether those same measures were enacted in November or December of last year, when several New Orleans customers who spoke with WWNO/WRKF first reported sharply increased bill amounts.
But rising natural gas prices, which jumped 56% last year, are also driven by a burgeoning liquified natural gas (LNG) global export market. Of the eight operational LNG export facilities in the U.S., six are in Louisiana, which alone provides more than 60% of all U.S. LNG exports worldwide. At least two new facilities and one major expansion are already underway. In a report published this month, the U.S. Energy Information Agency projects natural gas prices could rise another 25% by the end of 2027 as exports continue to rise. The agency also expects global LNG exports to triple over the next decade.
That’s an increase likely to be reflected on customers’ bills, and is not unique to only those with natural gas in their homes; about 75% of Entergy’s power generation also comes from natural gas, meaning Entergy electric customers will also be impacted.
Jesse George, with the Alliance for Affordable Energy, said the city should shift away from fossil fuels.
“In the short term, we’re going to continue to be hit with these price spikes, and over the long term, we’re only going to continue to pay more and more the longer we stay dependent on gas for our energy needs,” he told council members.
“The previous council made the mistake of creating a for-profit utility whose sole business is selling gas, which makes it a little more difficult for you to create pathways for people to reduce their dependence on gas. But it's not impossible.”
Several council members, including President J.P. Morrell, criticized Delta for not automatically enrolling customers — transferred from Entergy after the purchase — into ‘levelized billing’, a payment plan that spreads costs more evenly across monthly bills.
The council also encouraged the company to revise certain sections and language in bills provided to customers and to improve community outreach.
“I think that it is going to be incumbent upon y’all to really have the ability to have this sample bill reconstituted in a way that the public can understand,” Morrell said.
