In the past month, New Orleans City Council members took several critically important steps as regulators of Entergy New Orleans (ENO), the utility that provides electricity across the city. Each of those steps will impact ratepayers' long-term ability to get reliable, affordable power. One measure also would enhance the city's ability to harness the best available technology to deliver vital services and to protect the public.
On March 8, acting on the recommendation of its utility advisors, the council approved Entergy's request to build a 128-megawatt "peaking" plant in New Orleans East on the site of a much larger, outdated plant that was decommissioned several years ago. When completed, the new plant will become the only reliable source of electrical power located inside city limits.
Last week, again on the recommendation of its advisors, the council's five-member utilities committee unanimously adopted motions taking ENO to task for failing to live up to its promises on several fronts. The seven-member council is expected to adopt the committee's motions at its April 5 meeting.
The motions upbraiding ENO deal with three long-term issues that, in the opinion of the council and its advisers, the utility has failed to address adequately and in a timely manner: power outages caused by ENO's aging distribution system, incorporating renewable energy sources into its power grid and making "smart meters" more available to residents and other customers so they can monitor and adjust their electricity consumption and save money.
Two motions adopted by the committee last week represent the regulatory equivalent of a nuclear option. They are "orders to show cause" why ENO should not be found to have acted imprudently — a finding that could expose the utility to significant financial penalties.
One order requires ENO to explain why it has not sufficiently reduced recurring power outages, as the council ordered 18 months ago. At that time, ENO agreed to spend $50 million improving its distribution system, which is the network of poles and lines that deliver power to individual locations. The utility has spent about $25 million so far, but council members and customers say outages still occur too frequently — and for too long. The same order requires Entergy to upgrade its overall distribution system to prepare for the "smart cities" initiative the council adopted earlier this year. That initiative has the potential to make ENO's citywide grid a hub for improved communications technology, street lighting, traffic control and other critical services.
The second order to show cause holds ENO's feet to the fire on its promise to incorporate 100 megawatts of renewable energy sources into its local grid. Council members accused the utility of "slow-walking" its delivery on that promise. ENO will have to make regular reports to the council on both orders — or face monetary penalties.
The council's push for "smart meters" likewise pushes ENO to modernize its entire system — sooner rather than later. All in all, the council's recent regulatory decisions will help it protect the interests of everyone who buys electricity by making sure ENO efficiently and effectively delivers safe, reliable energy.