Entergy Louisiana customers will soon see a drop in their monthly bills. Thirteen years after hurricanes Katrina and Rita devastated much of Louisiana, the bonds used to save customers hundreds of millions of dollars in storm restoration costs are now paid off.
Starting in August, a legacy Entergy Louisiana residential customer using 1,000 kilowatt-hours per month will see a reduction of approximately $4.35 in the storm restoration charge on their monthly bill, while a legacy Entergy Gulf States Louisiana residential customer using 1,000 kilowatt-hours will pay about $2.57 less per month, according to a press release from Entergy.
The cost of restoring power following the storms totaled $966 million with $687.7 million in the legacy Entergy Louisiana service area, which includes the southeast Louisiana and north Louisiana regions, and $278.4 million for the legacy Entergy Gulf States Louisiana service area, which primarily covers from just east of the Baton Rouge metro area west to the Texas line, stated in the release. The companies were combined as Entergy Louisiana in 2015.
The Katrina storm recovery team numbered more than 13,000. It took 42 days to restore power to all customers who could accept it following Katrina. For Rita, a team of more than 17,000 worked three weeks to restore power to all customers in Louisiana and Texas.
Officials say Hurricanes Katrina and Rita caused more damage to the company’s distribution system than any other storms in history. The hurricanes damaged more than 21,000 poles, 12,600 distribution transformers, and miles of wire in Entergy Louisiana’s service territory, either due to the intensity of the wind, flying debris, storm surge, or a combination of the three.
To recover costs of the massive restoration effort, Entergy Louisiana used alternative financing in the form of low-interest, long-term bonds provided by the state-created Louisiana Utilities Restoration Corporation to help reduce the financial impact to customers, according to the release.
“Hurricanes Katrina and Rita were catastrophic events. When we realized the extent of restoration costs, it became one of our top priorities to protect our customers so they wouldn’t see a spike in their bills,” said Phillip May, president and CEO of Entergy Louisiana. “We worked closely with the Louisiana Public Service Commission and other elected officials to put a mechanism in place to secure low-interest bonds that saved our customers hundreds of millions in financing costs.”
While the Katrina/Rita bonds are now repaid, and charges for those storms will no longer be included on customer bills, storm restoration charges for hurricanes Gustav, Ike and Isaac remain. The Gustav/Ike bonds issued in 2010 are expected to be repaid in August 2022, while the bonds issued in 2014 to finance Isaac restoration costs will be repaid in 2026.
“Despite these storm restoration charges, Entergy Louisiana has been able to keep its rates among the lowest in the state and nation,” May said.