The City Council wants the Federal money we are getting from the infrastructure bill to pay for the sub station. At east no one can say this is not infrastructure!
The New Orleans City Council took the initial legal steps Thursday towards using federal stimulus money to pay for a portion of a new Entergy New Orleans substation to power the city’s drainage pumps. The substation for the Sewerage & Water Board is considered a critical infrastructure project for the city, but there is not yet a consensus on how to fill a $30 million funding gap, which surfaced recently when Entergy New Orleans said it could not finance construction. Several council members want to use American Rescue Plan Act funds, and while Mayor LaToya Cantrell has said she is committed to seeing the project completed, administration officials have said they are still weighing their options on the funding.
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We do need the substation as the pumps are not that reliable. So the council is making an effort to get it built.
On Thursday, Councilmember Joe Giarrusso introduced ordinances that could speed that process along: one ordinance would set up a dedicated fund for substation construction and two others would appropriate $30 million from the city’s ARPA allocation. The measures will be put up for a vote at an undetermined future meeting. Giarrusso said they are supported by a majority of council members. “Six months ago we all said this is the first priority in the city of New Orleans. That hasn’t changed,” Giarrusso said.
Entergy said they would fund and operate the substation but then backed off citing Ida costs, which they are raising rates to pay for.
As part of the financing deal announced in June, Entergy New Orleans said it would front construction costs for a substation that it would then own and operate. The company would recoup its investment at a profit with repayment by the S&WB, which would be the substation’s sole customer. At some point after Hurricane Ida, Entergy decided its current financial position was too weak to follow through with its portion of the deal. The company has left open the possibility of a future financing arrangement, but city officials say they want to move forward as quickly as possible and are not banking on Entergy New Orleans to return to the table. Administration officials, while open to using ARPA money, have said that Entergy’s withdrawal fundamentally alters the deal, and that “due diligence” is necessary before committing to a new funding source. “If the city now does this, you’ve got the government putting money into a substation that will be owned by Entergy, and the government then pays Entergy for the power that comes to the substation. That’s an inherently complicated arrangement,” said Ramsey Green, the city’s infrastructure chief, in an interview earlier this week. An administration spokesperson, Beau Tidwell, declined comment on Giarrusso’s ordinances.
The city has the money and has set some aside for the sub station but that means nothing when allocations come.
The city was allocated $387.5 million in ARPA money, which was initially meant to cover pandemic-related revenue losses. The first half was delivered last year, and about $77 million was included in the city’s 2022 budget. A request as to whether any other ARPA funds has been used was pending on Thursday afternoon. Giarrusso said using ARPA has the added benefit of demonstrating the city’s commitment to infrastructure investment, which he said will be key to maximizing its share of the $1 trillion federal infrastructure bill. He pointed to White House guidance last month instructing cities to use ARPA money for “a jump start” on water and sewer projects that might also get funding from the infrastructure package. Also on Thursday, the council created a new joint legislative committee with members of the New Orleans delegation to coordinate federally funded infrastructure projects. The committee includes all seven council members and six members of the city’s delegation to the Louisiana legislature, as well as U.S. Rep. Troy Carter. The committee is tasked with producing a report by August that outlines priority projects.
one way or another we will get the substation but then need to make sure it is ready for the upcoming hurricane season.
