Bayou Culture Gathering to highlight the effects of land loss on local culture
December 15, 2022
Coast Guard rescues three passengers from downed helicopter near Terrebonne Bay, La.
December 15, 2022
The Louisiana Public Service Commission (LPSC) is no stranger to asking a tough question: how will the state pay investor-owned utilities back for storm restoration expenses? Since Hurricane Katrina, the Commission has utilized securitization – the act of selling low interest rate bonds to raise money for the utility and then paying off the bonds through a fee on customers’ bills for a set period of years. Today, though, after approving Entergy’s request for $3.5 Billion earlier this year for restoration expenses related to Hurricanes Laura, Delta, Zeta, Ida and Winter Storm Uri, Commissioners said enough, and did not approve Entergy’s request for another $1.6 Billion to Entergy for further costs associated to those storms.
“I stand behind the Commission’s utilization of securitization – we know that it saves customers hundreds of millions of dollars,” stated Dr. Craig Greene, Commissioner of LPSC District 2. “However, securitization is based on the assumption that the company prudently incurred the costs to be recovered, and I do not believe that to be the case for Entergy.”
Dr. Greene presented data to the Commission that showed Louisiana’s far out last place when it comes to nationwide reliability. To further illustrate his ongoing concerns about continuing to fund Entergy’s requests, Dr. Greene showed how Entergy stacks up against similarly sized utilities in the country without including storms. The data shows a trend of Entergy being one of the least reliable utilities in the country – in recent years, the least reliable.
“The data shows that Entergy has not earned the benefit of the doubt assumed in securitization,” explained Dr. Greene. “All I’m asking, and have been asking for some time, is that we do an exhaustive prudency review to know that what we are asking the customers to pay for a properly maintained and prepared electric grid.”
The Commission’s decision is not without risk. Entergy is free to sue the LPSC and ask a court to force recovery through rates or other more expensive ways than securitization.
“Right now, nobody can tell me that Entergy properly maintained the grid before the storm hit such that their infrastructure even stood a chance of standing up during the storms,” added Dr. Greene, “but Entergy is asking yet again that customers pay for that grid. I’m not anti-Entergy and I don’t want customers to be at the whim of a court, but I don’t feel comfortable approving another storm fee without having engineers tell me that the grid was maintained as it should have been.”
Dr. Greene’s presentation included pictures of leaning and broken poles throughout Entergy’s footprint. Commissioner Foster Campbell of LPSC District 5 expressed continued desire to have shareholders pay a portion of the storm costs.
The Commission then called Entergy to the table to discuss Entergy’s lack of cooperation thus far in working with Commission hired engineers on a comprehensive statewide resiliency plan. While Entergy has not yet answered Commission questions related to resiliency, Entergy expressed plans to file their separate plan at the Commission that public shareholder documents indicate will cost Entergy Louisiana customers at least $7 Billion over the next five to ten years. Entergy expects approval of the plan by 2024.
“I’d rather the Commission address the low standards in our state, if that is the case, and begin holding these utilities more accountable than ignore the data and grant Entergy another bill increase,” closed Dr. Greene.
