The New Orleans City Council's Utility Committee will hold a potentially contentious hearing on Tuesday, Dec. 7, to ask Entergy New Orleans (ENO) what the company is doing about moves by some of its affiliates in other states to withdraw from an interstate agreement designed to equalize costs and benefits among the various Entergy Corp. subsidiaries. The so-called System Agreement has become a target of Entergy's Mississippi and Arkansas affiliates and regulators, who claim the agreement imposes higher costs on their ratepayers.
The flip side of that claim is the assertion by the council's utility advisers that the withdrawal of some Entergy companies from the System Agreement will cause a spike in local utility bills — by as much as $10 million a year citywide. Consultants to the council, which regulates Entergy New Orleans on the East Bank and Entergy Louisiana in Algiers, allege that ENO has effectively rolled over for its Arkansas and Mississippi affiliates — to the future detriment of New Orleans ratepayers.
All Entergy affiliates are subservient to their parent holding company, Entergy Corp., which is headquartered in New Orleans and is proposing major changes to the 50-year-old System Agreement.
At Tuesday's hearing, which starts at 10 a.m. in the City Council chamber, the council's utility advisers will offer their take on the issue, followed by a response from ENO officials. The council has ordered ENO to come ready to answer questions. The council also will consider options for requiring Entergy Corp. to hear the council's concerns and provide information needed to protect New Orleans ratepayers.
If the council is not satisfied with ENO's answers or actions with regard to the System Agreement changes, it can levy fines or sanctions against the utility. Other council weapons include a full-scale "prudence investigation" of ENO (court-like hearings on whether ENO has acted "prudently" in the interest of its ratepayers, which it is required to do in exchange for having an electricity monopoly) and a potential revenue disallowance if ENO agrees to changes in the System Agreement that hurt local ratepayers.
"The council has been warning about Entergy's actions for several years, but its warnings have gone ignored by Entergy Corp.," says utility consultant Clint Vince, an attorney who has been advising the council on utility matters for more than 25 years. "The council has requested several changes to the present proposal, which have been ignored. To protect New Orleans ratepayers, the council has passed several resolutions requiring the production of information that would enable it to determine the best options for protecting New Orleans ratepayers against these proposed changes. But its resolutions mostly have been ignored."
Entergy officials deny they have stonewalled council requests for information — or that the company is acting against the interests of its customers.
"We continue to work with the New Orleans City Council and its advisers to explore all options available to us and our customers," says Deanna Rodriguez, ENO's vice president of regulatory affairs. "In preparation of Tuesday's meeting, we have submitted expert testimony and analysis in addition to volumes of data previously submitted. We will continue our discussions and listen to the council's concerns, while keeping our customers — the residents of New Orleans — a priority. Like the council, Entergy New Orleans is committed to delivering safe, reliable and the most cost-efficient power available to our customers." — Clancy DuBos