Who should pay for Ida? The consumers or the company? Entergy says the consumers, the regulators say not so quick.
Shocked to learn that while typical electricity bills soon will jump $20 a month, and Entergy’s top executive received a $1 million pay raise and spent Hurricane Ida in Colorado, the state’s regulators Wednesday floated the notion that the owners of the state’s largest corporation should pay some of the storm restoration costs. “All five of us commissioners are getting a lot of calls from the folks. We’re all hurting here in Louisiana,” said Public Service Commissioner Mike Francis, R-Crowley. Four of the five elected members of the Public Service Commission were critical of Entergy. Leo Denault, chair and chief operating officer, was asked if Entergy Corp. would be willing to pitch in some of the $5 billion it cost to get the lights back on after being repeatedly knocked out by a series of hurricanes, rather than requiring the company’s 1.1 million customers to foot the whole bill, as required by law. “No,” replied Denault, who holds ultimate responsibility for the Entergy utility companies that sell electricity in Arkansas, Mississippi, and Texas as well as Louisiana. “We need to go through the process and see where we come out. We need balance.” “We’re trying to set a tone and balance between the ratepayers and the companies,” said PSC Chair Lambert C. Boissiere III, D-New Orleans. “Do things that look good. Optics are important. We got to answer for some of this.”
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Entergy is doing things they want us to pay for that are ways to ensure they continue to make money.
Denault said Entergy is following a unique system that lowers interest payments for storm restoration, is expanding its fleet of more efficient generating plants and is hardening its transmission and distribution lines – all with a view of keeping the company financially strong enough to ensure reliable power at the lowest possible prices. PSC Commissioner Foster Campbell, D-Bossier Parish, thanked Denault, then asked why he and his family used the corporate jet to hunker down in their Vail, Colo., vacation home during Hurricane Ida. He also asked why Denault paid $1.2 billion in dividends to Entergy shareholders, announced $1.4 billion in profits, and accepted a $1 million pay raise to $17.2 million per year, all while Louisiana customers were struggling without electricity. Denault said Entergy customers, who are charged parts of some business trips on the company’s jets, were not charged to ferry his family to their Colorado vacation home. As president of the New Orleans City Council, Helena Moreno is the chief utility regulator within the city’s limits, including Denault’s personal home. She said she was taken aback by the points Campbell made, which were supported by documentation. “The fact that the head of the main corporation during one of the biggest storms to ever hit his territory went off to Vail a couple days before and stayed there through the storm and its aftermath and wasn’t there with his team, I thought was very surprising and concerning as well. I think the customers would be concerned about this.” Moreno was attending the PSC hearing at the invitation of PSC Commissioner Craig Greene, R-Baton Rouge, because Denault was attending his first regulatory meeting since becoming Entergy’s chief in 2013. The PSC regulates utilities statewide except in a few municipalities, such as New Orleans. “Did anything go off in y’all’s mind?” Campbell asked. “Do you think it’s a good time to be giving a billion-dollar dividend and give a million dollar raise when we got $5 billion in damages from these storms … and our people are going to have to pay?”
20% of the costs, that is all Entergy is being asked to fund. 80% still to be paid by us and did you get a substantial pay raise?
Campbell asked PSC staff to draft an order requiring Entergy shareholders to bear 20% of the storm costs – that’s about $400 million. While Entergy, which has 1.1 million customers in Louisiana, is the largest one, the PSC plans to ask the other privately operating utilities to pay a percentage of storm restoration costs. The proposal would be ready for the PSC’s meeting next month. “This is a fair formula rather than just making the people pay for it all,” Campbell said. Moreno added that she liked the plan in which shareholders pay for some of the storm restoration costs. “It may not be able to stand up to legal muster, but maybe it brings Entergy to the table to at least be able to come up with additional options rather than just say to the ratepayers, you pay for it all,” she said.
Entergy also just received a $3B check for fixing parts of their system.
Entergy just received a $3 billion check for its first storm restoration repayment. Using a unique system designed by Entergy and the PSC to pay for getting the lights back on after hurricanes Katrina and Rita in 2005, the company sold bonds to cover the amount owed and guaranteed the loans with customer monthly surcharges rather than the traditional method of customers repaying the company directly. The method lowers finance costs for customers while strengthening the company’s position with financiers and allows the corporation to raise the billions necessary to quickly fix the system after a storm. The $3 billion amount translates to about $12 more on the monthly bills of typical residential customers for the next 15 years. A typical residential customer uses about 1,300 kilowatt hours of electricity. Entergy has asked the PSC to approve a second request for another $1.6 billion. The process will take about a year to complete. When that money is given to Entergy through the securitization process, another $5 or so will be added to monthly bills.
Natural gas prices have risen and since that is what Entergy uses to produce electricity their costs have risen.
Meanwhile, the price of natural gas, which fuels most of the plants that make electricity for Entergy, has jumped from a couple dollars per MMBtu to about $9.05 per MMBtu Wednesday morning. Metric Million British Thermal Unit is the scale used to sell natural gas. That cost translates to another $4 per month for residential customers. “You’re talking about $20 a month for people, half of whom make a little more than a thousand dollars per month,” Campbell said. “I think Entergy’s shareholders benefit immensely from Entergy’s business model in Louisiana, but I do not think Entergy’s customers see those same benefits,” said PSC Commissioner Greene. “While Entergy’s stock price has risen, dividends are increasing, and executives are flying in private jets, Louisiana’s reliability scores are last in the nation and Louisiana customers are paying higher bills.”
In other words, our prices will go up, period.
