The City Council is taking up Entergy New Orleans’ request to raise customer bills because of the $170 million in costs the utility racked up during Hurricane Ida.
Utility committee members voted Wednesday to consider the proposal, originally made in June, which along with another request to replenish a depleted storm reserve fund would raise bills by $4.40 per month for the average customer.
At-large Council member JP Morrell, the committee chair, said it was only the beginning of a process with a deadline of August 2023.
The $170 million storm
In making its request, Entergy defended one of the most hotly debated aspects of its handling of Ida — its decision to wait until an outside transmission line was restored before spinning up a natural gas plant in New Orleans East.
When Entergy submitted its request earlier this year, it detailed the huge costs of the storm on its infrastructure in New Orleans, which lost all power when the storm barreled through southeast Louisiana on Aug. 29 last year.
The storm knocked out 921 distribution poles, 297 transformers and 1,344 cross-arms, the utility said.
Outside the parish, Ida also took down the eight transmission lines feeding power to New Orleans. Those lines fall under the control of Entergy Louisiana, a distinct entity within the Entergy holding company. Entergy Louisiana has already received approval to charge its customers an extra $12 per month to cover part of the costs of Ida and several other storms in 2020 and 2021, and it’s seeking an additional $5 monthly rider.
Residents remember what happened after Ida made landfall. It took nine days for Entergy New Orleans to restore power to all the customers who could receive it. In that time, residents who remained in the city sweltered. Many who could leave did so. But at least nine senior citizens died of heat-related causes.
Entergy New Orleans touted its response to Ida in a statement summarizing its application. The company noted that it was fighting for supplies and labor with other utilities affected by Ida in the midst of a supply-chain crisis and COVID arises.
“Working with the other Entergy Operating Companies mutual-assistance utilities, and outside contractors, ENO expended extraordinary efforts to restore service to its customers and to rebuild its electric utility infrastructure as safely and quickly as possible,” the company said.
dollars per month
Overall, the cost of repairing the damage from the storm ran to $170 million. The company says it has also incurred $10 million in carrying costs.
The company’s filing includes an accounting of the huge enterprise required to put the lights back on. The more than 4,000 workers who took part in up to 100,000 meals, slept in hotel rooms for a combined 98,000 nights and burned through 332,000 gallons of fuel.
Entergy dipped into a storm reserve fund to pay some costs. If a separate request to replenish that fund to the tune of $75 million is also approved, the utility says that the average residential customer would pay an extra $4.40 per month for the next 15 years.
Utility customers have struggled through a summer of high bills, and a spokesperson for Council President Helena Moreno gave a critical take. He said Moreno has been in contact with US Sen. Bill Cassidy and other federal officials regarding opportunities to pay for storm costs with federal funds.
“The Entergy rate hike request is too much for our people and we will continue to explore all options to prevent bill impacts throughout this process,” said Andrew Tuozzolo, Moreno’s chief of staff.
Jesse George, the policy director of the Alliance for Affordable Energy, said his group would carefully scrutinize Entergy’s request. He noted that the council’s utility advisers had chided the company for under-investing in measures to harden its grid in the mid-2010s.
Power plant’s role defended
Entergy’s request to the council included a defense of its decision not to start the New Orleans Power Station by itself.
That controversial natural gas plant in New Orleans East was approved despite complaints from residents that it would worsen air quality in a largely Black and Vietnamese-American neighborhood. During the approval process, the company played up the plant’s role as a potential backup power source during natural disasters.
Yet when Ida knocked out New Orleans’ connections to the larger electrical grid, the plant initially stayed offline. Company officials waited until one transmission line to the outside world had been restored before starting the plant.
The company said that starting the natural gas plant by itself would create a potentially risky imbalance between the electricity generated and the demand from the city’s devastated distribution network.
After the transmission line was restored, the line served as a “shock absorber” for the New Orleans East plant in the days after the storm, the company said.
Entergy says it nevertheless has the ability to start the plant up from a diesel back-up generator even when outside transmission is cut off, a procedure known as “black starting.” That capacity could still be used in the future if New Orleans ever needs to operate as an electrical “island,” the utility said.
The council’s advisers gave a favorable take on the utility’s handling of the storm in a May report, which could bolster Entergy’s case for a rate hike. They said the plant played an important role in restoring power after Ida, and they noted that it was never designed to power the entire city. The plant has only 128 megawatts of capacity, or a little more than 10% of the city’s peak power needs.
“Nothing has come to the advisers’ attention during this after-incident review to suggest that ENO’s actions were not in accordance with prudent utility practices,” the advisers said.
Staff writer Sam Karlin contributed to this report.