Feb 5, 2014 7:29 PM by Dave Fields
Entergy Gulf States customers wondering why their bills still include additional charges for hurricanes of 2005 and 2008, will continue to incur those costs until 2018 and 2022 respectively.
Liz Duhon, an Entergy spokesperson, said that the charges, called storm riders, are a direct result of Act 55 in 2007 known as the Restoration Law. These storm riders, Duhon said, allow Entergy to address $1.6 billion in statewide damages for Hurricanes Katrina, Rita, Ike, and Gustav. The legislation allowed certain utilities to recover damages over an extended period of time.
Questions arose from some Jennings customers who expressed confusion about extra charges on their bills. Duhon acknowledged that sometimes customers inquire about the riders.
"It was good for the customers," Duhon said, "because it afforded them a way to pay for damages in a way that would not be a burden and would allow them to pay in increments."
Beginning July 30, 2008, Entergy attached one storm rider--2.5 percent of the customer's monthly bill--for the two 2005 storms of Katrina and Rita. Likewise, the storms of Ike and Gustav were combined into a second storm rider---1 percent of the customer's monthly bill--that began in 2012. Each of these riders is scheduled to last for a decade.
Duhon said that Entergy, as a result of these four storms, had depleted its storm reserve fund and that the two storm riders also allowed for that fund to be replenished "without having to go on the open market to borrow the money." Duhon said that this solution will save its customers a total of $10 million.
Southwest Lousiana Electric Membership Corporation (SLEMCO) Spokesperson Mary Laurent said that SLEMCO also used storm riders to pay for the restoration of three substations in Vermilion Parish, but these costs ended for its customers in March 2013.
"We had to go in and raise these substations, including the transformers," Laurent said. "All the structures inside the substations had to be raised to Hurricane Rita storm surge levels plus five feet."
Laurent added that these substations were raised at a pace of one per year until completion of the project in 2013.
Lafayette Utilities System Director Terry Huval said that its customers haven't had to deal with the additional cost of storm riders.
"We've never had to attach riders to our bills to recover damages from any hurricane," Huval explained.
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