We use electricity, we pay. If the source has problems, we pay. If the company has record profits, we still pay.
The Louisiana Public Service Commission on Wednesday voted to let Entergy Louisiana borrow $3.2 billion via bonds to pay for repairs and restoration after storms that clobbered the state in 2020 and 2021, effectively passing on those costs to ratepayers who must pay back the money on their monthly bills over 15 years. In a prepared statement after the vote, the utility said that the surcharge for Entergy Louisiana customers would work out at about $8 a month per 1,000 kilowatt hours. Entergy has said its “typical” ratepayer uses about 1,250 kilowatt hours per month. The final amount will depend on the terms of the bonds issued later this year. Still, the $3.2 billion includes less than half the estimated costs Entergy Louisiana said were incurred by Hurricane Ida. The company expects to seek at least another $1 billion this year to cover the remainder of those costs, as well as the costs to Entergy New Orleans ratepayers, spokesman Neal Kirby confirmed, which means the monthly surcharge for customers is likely to rise even higher. “We are completing storm invoice processing for Hurricane Ida, and Entergy Louisiana is on track to submit its cost recovery filing in April, followed by Entergy New Orleans around midyear,” Kirby said. “Our goal remains to receive the balance of Entergy Louisiana’s Hurricane Ida securitization proceeds by the end of this year,” he added, referring to the method of issuing bonds in order to pass on the costs to customers.nola.com
Entergy is going back many years for these bills.
Entergy has previously said that the total cost of hurricanes Laura, Delta, Zeta, and Ida, as well as winter storm Uri, would be more than $4 billion. Entergy Louisiana’s 1.1 million customers are on the hook for the vast majority of that, with Entergy New Orleans’ 209,000 customers facing a bill for Ida of up to $150 million. The meeting of state regulators came on the same day that Entergy Corp. Chairman and CEO Leo Denault held a meeting with investment analysts to discuss the utility’s 2021 financial performance. He told investors that Entergy could report “strong results for another successful year.” Entergy said earnings in the last three months of the year were $155 million, up 8% from the same quarter in 2020, after adjusting for the volatile nuclear business that it has been shutting down. For the full year, earnings were up 7% at just over $1.2 billion after adjustments. That growth comes on top of record earnings in 2020. Foster Campbell, the only one of the five LPSC commissioners to vote against approving Entergy’s bond issue on Wednesday, railed against the utility and Denault. “I’m sick of the free ride y’all get,” he told Entergy executives attending the meeting, including Phillip May, CEO of Entergy Louisiana. “When all is said and done, Entergy will not pay one quarter…it will all be paid by the ratepayers.”
Public Service should not be Industry Service but that is what the commission usually is.
Campbell also criticized Denault for not turning up at any of the LPSC meetings, as well as for the chief executive’s compensation, which totaled more than $16 million in 2020. That is up from just above $10 million in 2019, according to regulatory filings. About 90% of Denault’s compensation is related to financial performance and how well the share price does, and Campbell also criticized the sharply rising dividend payments to shareholders, which totaled more than $1.5 billion over the last two years, even amid a pandemic and record storms.
ANd we can’t forget the shareholders who need their dividends.
Entergy promised much bigger dividend increases for shareholders prior to the pandemic and it has kept that pledge, increasing dividends in line with its earnings increases of between 5% and 7%, compared to increases of 2% to 3% prior to 2019. On Wednesday, Denault promised earnings and dividend increases would continue to grow at that pace for at least the next two years. “Without financial health, we could not have raised the over $4 billion needed to fund the restoration from recent storms, including Ida and Laura, two of the worst storms ever to hit Louisiana,” he said. At the regulatory meeting on Wednesday, Erik Skrmetta, commissioner for District 1, which covers parts of Greater New Orleans, said he had met this past week with U.S. Rep. Troy Carter and US. Secretary of the Department of Housing and Urban Development Marcia Fudge to discuss getting HUD grant funds to help mitigate the storm costs for ratepayers. Fudge said the request had to come directly from Gov. John Bel Edwards but that she would be favorable toward it, Skrmetta said. It is not yet clear how much the state might apply for, or how that might fit with other requests for federal infrastructure funds. Louisiana already has received more than $2 billion in federal assistance for Hurricane Ida alone, according to the Federal Emergency Management Agency.
Go to the customers or HUD, it still means that Entergy wants help in paying for the infrastructure failures they should have planned for.