IG seeks consultant for analysis of city utility rates, regulatory structure

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The New Orleans Office of the Inspector General is seeking the services of a consultant for a report on the way City Council regulates gas and electric utilities Entergy New Orleans (East Bank) and Entergy Louisiana (West Bank). Inspector General Ed Quatrevaux hopes to determine whether the current model — overseen by City Council's Utility Committee — "operates efficiently and effectively at the lowest cost to ratepayers," reads a recently released request for proposals (RFP).

The vast majority of city governments in the United States do not have regulatory authority over private utility providers. To do it, City Council hires a number of expensive lawyers and consultants. Total Entergy-related contractor costs are nearly $7.7 million this year, The Times-Picayune's Bruce Eggler reported in late December.

Data from the United States Energy Information Administration (EIA) show that Entergy New Orleans has the second highest retail electric rates among investor-owned utilities in the state at 8.19 cents per kilowatt hour in 2011. Cleco Power had the most expensive rates for investor-owned providers, at 10.44 cents. (However, most of the state's providers are either publicly or cooperatively owned. According to the EIA, Ruston's public utility had the least expensive rates: 2.81 cents. The city of Erath's public utility were the most expensive overall: 14.02 cents.)

The IG's evaluation will consist of two parts, according to the "scope of services" section in the RFP. One is overall review of the regulatory system and analysis of contractor costs and performance. Another will compare gas and electric rates statewide.

Consultant responses are due by Feb. 25. Contractor selection is set for March 22.

Read the full RFP: OIGBidsforUtilityReview.pdf

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