Changes may be coming to the Entergy subsidiary that provides power to the City of New Orleans.
Entergy New Orleans currently is a subsidiary of Entergy Louisiana, and has a monopoly in the City. The way things are set up, the New Orleans City Council has regulatory authority over the company, and that relationship has not always been good.
Tomorrow, the City Council's utilities committee has several Entergy-related topics on its agenda: A presentation from the company to explain storm preparations, the loss of transmission lines into New Orleans, the role of the New Orleans Power Station (NOPS), repairs to the transmission and distribution systems, and costs related to Hurricane Ida; Consideration of a motion that would order review by city officials of Entergy's actions before, during and in response to Ida, and resolutions requesting reviews of the transmission system serving the City by the Public Service Commission, the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation.
Yesterday, a lawsuit was filed against the company on behalf of New Orleans residents who accused the company of using a "bubble gum and super glue approach" to system maintenance, instead of doing what it should have to keep the system strong. You can read about it, and see the suit, here.
According to the Alliance for Affordable Energy, New Orleans is the only US city where a city council has separate regulatory authority over an Investor Owned Utility. There has often been political back-and-forth, especially since council discussions about the company are held in open session. Back in 2018, there were even lawsuits over one meeting in which the company was accused of hiring actors to appear as concerned constituents. Read coverage from The Lens about that situation here.
Now, with the residents of the city in the dark for so long after Hurricane Ida, city leaders have been vocal about past promises and assurances, chief among them City Council President Helena Moreno. Moreno also is chair of the utilities committee that meets tomorrow.
On the eve of the discussion that may include considering changes to the way New Orleans gets its power, Entergy countered with a long release listing the ways the company might change its set up in the city, or, alternatively, dump its New Orleans system all together.
The statement, which you can read here, presents four options that Entergy says it is considering: a merger with the Entergy Louisiana company; sale or merger of Entergy New Orleans with another public or private entity; establish a standalone entity without Entergy ownership; or transfer of the system to the city of New Orleans to run on its own.
Either way, Entergy New Orleans wouldn't be dealing with the council any longer. If the New Orleans Entergy merged with Entergy Louisiana, it would then be under the oversight of the state Public Service Commission - meaning Entergy would be free of City Council regulation. Obviously, if Entergy were to sell or spinoff the company, or transfer the company to the city, again Entergy would be free of City Council regulation.
Rod West, utility group president of Entergy Corporation, said the company is "positioned to support the City Council as they evaluate various options and prepared to move forward with whatever path the council chooses.”
But he also added some rhetoric about how hard the company worked to bring power back to the city, lamenting that "despite a comprehensive and dedicated restoration effort that saw the overwhelming majority of New Orleans customers’ power restored within a week after the strongest hurricane ever to hit our region, several members of the council have expressed their intent to introduce and support a process that could potentially have another entity own and operate electric and gas service in the city."
Early on after Ida, Moreno raised questions about the extended outages, which the company linked to transmission damage. Moreno wants to know why a power station that had been built expressly to prevent that wasn't up and running. She has promised a "deep dive" into that issue, as well as possible complaints with regulatory agencies and eliminating Entergy's monopoly in the city.
“It is obvious that we have reached a critical juncture in our relationship with the City Council,” said West. “While we believe that the actions of Entergy New Orleans have always been in the best interest of our New Orleans customers, some members of the council have publicly expressed a different opinion. Certain proposed actions would prohibit ENO from recovering critical storm restoration costs and freeze funding mechanisms previously approved by the council, thus inflicting further financial decline on ENO and adversely impacting ENO’s ability to provide quality service to its customers.
“The New Orleans City Council and ENO have a long history of working together to find common ground on solutions for customers that solve complex problems and achieve important objectives to a sustainable energy future for New Orleans,” West continued. “The council’s expected resolution will require it to make an important choice: will the city continue with Entergy as its energy partner or pursue another alternative?”
Unfortunately for Entergy, the company apparently attached its entire media strategy document when it sent the release to Moreno's office.
"Dear Entergy NOLA and Entergy. When you're coming at your regulatory body with a media ploy to change up regulators, don't accidentally send me your whole messaging and media plan with your news release," the councilwoman tweeted.
Here's that tweet: