No end in sight for price hike

For residents and businesses paying at least a 31 percent higher rate to receive electricity from the City of Houma Electric Utility System, Terrebonne Utilities Director Tom Bourg has some bad news for you.

“I don’t see any substantial relief in sight,” he told the Terrebonne Parish Council last week.

Bourg said the cause of the rate hike is the higher price of natural gas, which the Houma Generating Station normally burns to produce 15 to 25 percent of the electricity the plant transmits to its customers. He said the price of natural gas has more than doubled recently.

And since the Houma Electric Utility System generates a $21 million annual surplus, council members Alvin Tillman, Arlanda Williams and Johnny Pizzolatto suggested that the system use some of that money to reduce electricity rates.

Usually, the bulk of the electricity the Houma station transmits comes from a coal-burning plant near Alexandria owned partly by Cleco and the city of Lafayette. The power is transmitted from that plant to the Houma station over lines owned by Cleco and Entergy.

From there, the electricity is delivered to residences and businesses on power lines owned by Houma.

But Bourg said Houma has experienced difficulty receiving electricity over the Entergy-owned lines, forcing the city to produce around 55 percent of the electricity it transmits burning the higher-priced natural gas.

Houma has been embroiled in a long-running dispute with Entergy over who should pay for upgrades to the Entergy lines coming in to the city.

Regardless, electricity providers across the country have had to raise rates because of the rise in the price of natural gas, Bourg said.

“Our unit cost is typical for the entire country,” he said. “We’ve been saddled with these costs. We have to pass them on to the customers. This is not a Houma-only problem. The nation is dependent on gas.”

Williams told him she has received calls from alarmed customers on fixed incomes about the skyrocketing costs of their electricity.

Although Bourg gave a figure of 31 percent, Williams and Councilman Joey Cehan told him they have seen electricity bills of Houma customers spike by 66 percent.

In response, Bourg said he would need to see those bills before he could comment.

The utilities director called comparisons between the Houma system and the lower rates charged by the Houma/Amelia-based electricity distributor South Louisiana Electric Cooperative Association unfair since SLECA has received favorable treatment by the federal government and is prohibited by federal law from generating its own electricity.

If Houma did plow its surplus back into helping reduce electricity bills, other agencies could take a hit. The system has been a cash cow for Terrebonne Parish government, transferring some of its surplus money to other agencies to supplement their budgets.

The transfer of funds, Tillman said, means Houma electricity customers are partly paying the cost to run other parts of Terrebonne Parish government.

Tillman said, “Departments depend on money from the plant.”