Entergy New Orleans customers will get $10.2 million bill for power plant outage, utility says | Local Politics

From the shutdown of a massive nuclear power station in Mississippi to brief blackouts caused by squirrels, Entergy New Orleans reliability big and small was put under a microscope at a City Council hearing Wednesday.

For the first time, utility officials explained what led to a month-long outage at the Grand Gulf Nuclear Station that will cost local ratepayers an estimated $10.2 million.

With Entergy bills already sky-high before the outage, utility officials said help is on the way in the form of a one-time, $150 credit for some low-income customers. However, City Council Vice President JP Morrell said Entergy must do much more to make customers whole for the shutdowns that have plagued the plant for years.

“What is the relief we give to customers based on Grand Gulf’s unreliability?” said Morrell “Why is it fair that consumers take it all on the chin when it comes down?”

Power problems

Two related issues loomed over the Utility Committee meeting: the hefty bills customers are encountering because of high natural gas prices, and the further spikes that could come from 32 days of unplanned outages at Grand Gulf in June and July.

In normal times, nearly a third of the city’s power is generated at the Port Gibson, Mississippi, plant, which is owned by the Entergy holding company.

The plant was down for most of July, however. Bill Maguire, the chief operating officer for nuclear at Entergy, described a series of mishaps. A June 30 lightning strike to the plant’s water pumps from the Mississippi knocked it out until July 3.

On July 4, plant employees found a broken stem on one of the plant’s four, critical turbine control valves. The plant reduced power to 60% and started preparing for an outage at a more opportune time.

But eight days later, operators found a faulty stem on another valve. The plant’s managers put it into full shutdown mode to avoid damage to the turbine, said Maguire.

There was an all-hands-on-deck push to get the plant online, Maguire said. In addition to the two broken stems, Entergy replaced a third nearing the end of its operational life. On Monday, the plant came back online.

bill bumps

For Entergy’s customers, the outage could not have come at a worse time. Air conditioners are blowing hard, and Entergy had to pay hefty prices for replacement power on the open market because of high natural gas prices tied to the war in Ukraine.

The total cost to local consumers will be about $10.2 million, said Courtney Nicholson, an Entergy New Orleans vice president. Nicholson said the average residential customer could first expect to pay $1.95 more on their bill in September, with the total cost rising to $17 per customer.

Morrell, in an interview after the hearing, said he expects that the utility will quickly pass along the full cost once it is finalized.

Before the latest shutdown, Entergy New Orleans and the City Council, its regulator, were already engaged in long litigation at the Federal Energy Regulatory Commission.

City officials allege that Entergy has badly mismanaged the power plant, which Entergy denies. Earlier this year, the utility offered a $116 million settlement to the City Council, which it rejected as a low-ball offer.

On Wednesday, Entergy officials declined Morrell’s suggestion that they voluntarily pay for the cost of the latest outage.

“We’re disappointed that the plant was off this summer. That doesn’t meet our expectations,” said Maguire. “We recognize the impact on our customers is real, and we work very hard to get the plant back online just as quickly as possible.”

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credits coming

Without linking them to the outages at Grand Gulf, Entergy New Orleans announced Tuesday that customers making up to 250% of the poverty level will be eligible for $150 bill credits on Aug. 17.

Those credits will be administered by the United Way of Southeast Louisiana, which details of how customers can apply.

Entergy New Orleans customer Bethany Garfield took a number of past bills and bank statements to the utility’s Canal Street customer service office in an effort to get her power tuned back on Thursday, Nov. 18, 2021.

Denise Bickham, 67, told the council that said she’s been looking for help. She still has to pay last month’s bill of $461 and just received another $370 sticker-shock, she said. In an ordinary summer she might spend $200 a month.

“$150 is a help – but not a whole lot,” said Bickham.

Several council members expressed concerns that the credits, which Entergy says came from shareholder donations, won’t last long. They also fretted that senior citizens won’t be able to access the online application.

“We’re seven days out before this program launches, and we still don’t have clear information about what is necessary to apply,” said City Council President Helena Moreno.

Blackout standards mulled

Much closer to home than Grand Gulf, council member Joe Giarrusso questioned why parts of his District A have been subject to repeated outages on sunny days.

Trees, small animals like squirrels and poles toppling from the after-effects of earlier storms can all be the cause, Entergy officials said. Yet they were able to offer few stats about how often such blue-sky outages occur, blaming a software update a few years ago that changed the way linemen enter data.

Giarrusso expressed alarm and asked for better numbers soon. Entergy officials said that regardless of the details, the overall number of outages has gone down in recent years.

That assertion lines up with data presented by Joseph Rogers, a technical advisor to the council. He said that the average number of outages was 1.1 per customer last year, down from a recent peak of 1.61 in 2016.

Between 2013 and 2016, Entergy’s reliability slipped from the top half of utilities nationally to the bottom fourth, according to Rogers.

In response, the council slapped the utility with a $1 million fine. Entergy filed a lawsuit. In June, the state judge vacated the penalty, on the basis that the council did not have pre-existing reliability standards.

File photo of Entergy worker

A lineman is seen working on a power pole along Lafayette Street near the power substation on Julia Street on Wednesday, March 9, 2022, in New Orleans. (Staff Photo by Max Becherer)

Now, Rogers has crafted a proposal for the council’s first-ever reliability rules. Under his plan, Entergy could be fined if it exceeds an average of 1.53 outages per customer per year. If the standards had been in place five years ago, Entergy could have been dinged $1 million.

The council’s plan would set minimum reliability standards for the city’s overall grid, but it would also require Entergy to identify and fix problem feeder networks, or face $500,000 fine.

The committee forwarded the draft standards to the full Council, where they are set to be formally approved Aug. 18. That will kick off a 30-day comment period before a final version is sent to the Council for another vote.

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