Louisiana utility regulators Entergy for creating grid dependent on costly gas

With Louisiana residents receiving unprecedentedly high electricity bills, Democrats on the Louisiana Public Service Commission last week blamed Entergy Louisiana for the “mess,” saying the utility giant ignored calls to diversify its sources of fuel for power generation.

The commission called Entergy Louisiana executives to discuss the issue at Wednesday’s meeting. Commission Chairman Lambert Boissiere, D-New Orleans, said his office received several hundred calls last month from residents complaining about high bills.

“It’s hard to keep up with our small staff,” Boissiere said. “And people are frustrated, so please excuse me if you’re noticing frustration in my voice as well, but if I get it, I’ve got to turn around and give it to you when I’m here because we’re all the people have.”

Commission Executive Director Brandon Frey explained that a spike in natural gas prices caused by a lack of shale drilling and more overseas exports is driving the high electricity bills.

Boissiere and Commissioner Foster Campbell, D-Shreveport, blamed Entergy Louisiana for creating a grid that is too dependent on natural gas and for resisting investments in renewable energies. The company’s power generation portfolio is 85% natural gas and about 3% renewables with the rest coming from other fossil fuels and nuclear power.

“I had to go around to people and try to make light of it: I would say, ‘Entergy doesn’t like solar until they figure out how to own the sun,’” Boissiere said. “The beauty of the sun is that nobody owns it, and it shouldn’t be a worldwide commodity because a war in Ukraine won’t affect the sun prices.”

Campbell said Entergy executives also fought back against paying customers a fair market value for solar energy that they fed into the grid.

“We’re in a hell of a mess now because if we had been practicing with some renewables 10 years ago, we’d have been better off,” Campbell said. “But we were finding reasons not to have renewables…You guys have had your dukes up, like this, rather than saying, ‘Come on in.’”

Entergy Louisiana CEO Phillip May disagreed, saying the price of solar 10 years ago wasn’t as low as it is now.

“If we had solar right now at the price that solar is now, yes, our bills would be lower,” May said. “If we went heavy into solar half a decade or a decade ago, our bills would be much higher because we’ve seen a dramatic decline in the price of solar.”

But Democrats on the commission did not buy that argument. Boissiere, who has held his office for nearly two decades, said Entergy was fighting against even minor investments in renewables.

“We were talking about putting your toe in the water, diversifying a little bit,” Boissiere said. “I’m sure the other fuels in Louisiana weren’t the absolute cheapest when we got into those either.”

Simon Mahan, executive director of the Southern Renewable Energy Association, said it was widely known five years ago that renewable energies were quickly becoming more affordable than fossil fuels.

“Entergy failed a half decade ago to begin diversifying their power resources to avoid high bills today,” Mahan said. “We already knew then renewable prices would keep going down. Renewable projects take time to come online. Had Entergy planned to add more renewables five years ago, they’d be online or coming online now with prices lower than gas today.”

Five years ago Mahan was involved in Entergy Louisiana’s integrated resource planning (IRP) — a mandatory process that utility companies undertake periodically to forecast the future energy needs of its customers and look for the best and cheapest sources of energy. During that process, he told the commission that Entergy failed to conduct meaningful evaluations of renewable energy sources, contradicting its own corporate sustainability goals.

“While the rest of the country’s electric utility industry is moving forward on renewable energy resources, ELL’s process led to a result where the company planned to do nothing for the next five years,” Mahan wrote at the time.

Entergy has recently begun to pivot towards renewables. May said the utility currently has 475 megawatts of solar awaiting commission approval to put into service, another 600 megawatts behind that and another 1500 megawatts proposal the company has just released for bidding.

Other power companies operating in Louisiana are also investing in renewable energy. Cleco has begun purchasing solar from a third-party power generation company in the state, and Southwestern Electric Power Company signed an agreement in 2020 to begin importing wind power from Oklahoma.

Commissioner Eric Skrmetta, R-Metairie, a frequent defender of Entergy, pointed out that MISO Energy, the multi-state organization that operates Louisiana’s grid, is only about 1.3% solar.

While MISO’s solar resources are small, its total share of renewables, which includes 13% wind power, is much larger than Entergy Louisiana’s.

“There has to be a balancing of interests on this to make sure that power is reliable and power is deliverable,” Skrmetta said.

While some commissioners blamed Entergy for the problem, one advocate said the commission also bears responsibility.

Logan Burke, executive director of the Alliance for Affordable Energy, said the commission never really pushed hard for renewables. Burke addressed the commission Wednesday and later spoke with the illuminator.

“The commission simply never took the actions necessary to move away from fossil energy, and that is why we are here,” she said.

The energy industry knew years ago that renewables were going to become the cheapest sources of power, yet the commission over the course of four years approved four new natural gas power plants in Louisiana, Burke said.

For customers currently struggling to pay high electricity bills, Entergy is waiving both late fees and credit card fees and has donated $10 million to a fund that helps certain low-income customers pay their bills. The company is also allowing deferred payments so that customers can pay off their bills in smaller increments over time, May said.

May said Entergy will not disconnect anyone who reaches out to the company to get on a payment plan.

Despite the summer heat, the commission opted not to pass a moratorium on disconnects for overdue customers. Commissioners already have a policy that suspends disconnects in parishes where the National Weather Service has issued an excessive heat advisory.

However, Burke said those steps are not enough. She said an excessive heat advisory often lasts only a day or two, after which utility companies are free to resume disconnects. She also said she has heard from many residents who are unable to reach Entergy by phone or are placed on hold for extended periods of time.

“We are fielding phone calls from people who can’t get in touch with Entergy or are placed on hold for extended periods,” Burke said. “Maybe it could work if Entergy had thousands of customer service reps answering calls.”

Boissiere asked Entergy to come up with another plan that specifically helps senior citizens and customers on fixed incomes who are struggling to pay their bills.

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