Shocked to learn that while typical electric bills will soon soar by $20 a month, Entergy’s top executive got a $1 million pay raise and spent Hurricane Ida in Colorado, the State regulators floated the idea on Wednesday that owners of the state’s largest corporation should pay some of the costs of restoration after a storm.
“The five of us commissioners get a lot of calls from people. We are all hurting here in Louisiana,” said Public Service Commissioner Mike Francis, R-Crowley.
Four of the five elected members of the Public Service Commission asked Leo Denault, president and chief operating officer, whether Entergy Corp. would be willing to contribute part of the $5 billion it cost to turn on the lights repeatedly knocked out by a series of hurricanes, rather than demanding that the company’s 1.1 million customers pay the full of the invoice, as required by law.
“No,” replied Denault, who holds ultimate responsibility for utilities that sell power in Arkansas, Mississippi and Texas as well as Louisiana. “We have to follow the process and see where we come out of it. We need balance.
“We’re trying to set the tone and strike a balance between taxpayers and businesses,” said PSC Chairman Lambert C. Boissiere III, D-New Orleans.
Denault said Entergy is following a unique system that reduces interest payments for storm restoration, expands its fleet of more efficient power plants, hardens its transmission and distribution lines – all in an effort to maintain the company financially strong enough to provide 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 executive jet to hide out at their vacation home in Vail, Colo., during Hurricane Ida. He then asked why Denault paid $1.2 billion in dividends to Entergy shareholders, announced $1.4 billion in profits and agreed to a $1 million salary increase to $17.2 million per year, as customers in Louisiana struggled without power.
Denault said Entergy customers, who are billed for some business travel on the company’s jets, weren’t responsible for ferrying his family to their vacation home in Colorado.
As President of the New Orleans City Council, Helena Moreno is the primary regulator of public services within the city limits, including Denault’s personal home. She was surprised by the points raised by Campbell, which were supported by documents. “The fact that the head of the main company during one of the biggest storms to ever hit his territory had gone to Vail a few days before and stayed there through the storm and its aftermath and was not there with his team, I thought that was very surprising and worrying as well. I think customers would be worried about that.
Moreno was attending the PSC hearing at the invitation of PSC Commissioner Craig Greene, R-Baton Rouge, as Denault was attending his first regulatory meeting since becoming Entergy chief in 2013. The PSC Regulates utilities throughout the state, except in a few municipalities, such as New Orleans. .
“Did something go through your mind?” Campbell asked. “Do you think now is a good time to give a billion dollar dividend and give a million dollar raise when we’ve received $5 billion in damages from these storms…and that our people are going to have to pay?”
Campbell asked PSC staff to draft an order requiring Entergy shareholders to bear 20% of the costs of the storm, or about $400 million. Entergy, which has 1.1 million customers in Louisiana, is the largest, the PSC plans to ask other private utilities to pay a percentage of storm restoration costs. The proposal would be ready for the PSC meeting next month.
“It’s a fair formula rather than just having people pay for it all,” Campbell said.
Moreno added that she likes the plan in which shareholders pay a portion of post-storm restoration costs. “It may not be able to withstand a legal rally, but it may bring Entergy to the table to at least be able to provide additional options rather than just telling taxpayers, you pay for everything. “, she said.
Entergy just received a $3 billion check for its first storm restoration reimbursement. Using a unique system devised by Entergy and the PSC to pay for the restoration of lights after Hurricanes Katrina and Rita in 2005, the company sold bonds to cover the amount owed and guaranteed the loans with monthly surcharges rather than the method traditional customers. reimburse the company directly. The method reduces financial costs for customers while strengthening the company’s position with financiers and allows the company to raise the billions needed 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 approximately 1,300 kilowatt hours of electricity, which is how electricity is sold.
Entergy asked the PSC to approve a second request for an additional $1.6 billion. The process will take about a year. When this money is given to Entergy through the securitization process, approximately $4 more will be added to the monthly bills.
Meanwhile, the price of natural gas, which powers most of the plants that generate power for Entergy, rose from a few dollars per MMBtu to around $9.05 per MMBtu Wednesday morning. Metric Million British Thermal Unit is the scale used to sell natural gas. This cost translates to $4 more per month for residential customers.
“You’re talking about $20 a month for people, half of whom are making a little over a thousand dollars a month,” Campbell said.