Public Service Commission Could Require Utilities to Pay More for Storm Repairs
BATON ROUGE (The Center Square) — The Louisiana Public Service Commission is drafting an order to require Entergy and other investor-owned utilities to pay 20% of storm repairs, instead of putting the entire bill on ratepayers.
PSC Commissioner Foster Campbell asked the commission’s staff to draft the order after confronting Entergy CEO Leo Denault about increasing profits, $1.2 billion in dividends paid to the company’s shareholders last year, Denault’s recent $1 million pay raise and his family vacation to Vail, Colorado during Hurricane Ida as customers struggled without power.
Commissioners asked Denault during his first appearance before the PSC since becoming CEO in 2013 whether Entergy would voluntarily help cover some of roughly $5 billion in storm damages, instead of passing the entire cost on to the company’s 1.1 million customers.
Those customers are expected to pay roughly $16 more per month for 15 years to recover the costs, as required by state law, but commissioners highlighted the company’s questionable spending in a bid to lower that burden. Entergy has received more than $3 billion through bond sales to recover repair costs, and the company is in line to receive another $2 billion, but Campbell suggested it should be less.
“It really troubles me that y’all don’t have any skin in the game, but I have a solution,” Campbell said. “I want 20% to go to the ratepayers. That’s a small portion” of the $2 billion.
“I think ya’ll ought to put back in $400 million back toward the ratepayers,” he said, noting the high rate of poverty in Louisiana. “Would you agree to that?”
“No, I would not,” Denault said. “I think we need to go through the process and see where we come out. … We need to make sure that the company continues to have the financial flexibility to have the confidence of the capital markets to be able to respond during those events.”
Denault highlighted the company’s investments in improving efficiency, a shift toward more renewable energy, Entergy’s charitable contributions and advocacy in Congress to help secure relief for customers.
He also discussed Entergy’s efforts to brace against future storm damage as ways the company is working to keep costs lower for customers.
Commissioner Craig Greene told Denault “we want to see you value your customer as much as we represent them” and suggested “we need to do better.”
“Our objective is to create an environment where the customers are getting the outcomes they desire and we want to make sure we manage our business to match,” Denault said. “It will improve the service levels … and in addition to that we think that it is really going to help drive the economic development of the state.”
New Orleans City Council President Helena Moreno also weighed in on the revelations to The Advocate about Denault’s $17 million annual compensation, raise, trip to Vail and the company’s growing profits at a time when ratepayers are struggling.
“The fact that the head of the main corporation during one of the biggest storms to ever hit his territory went off to Vail a couple days before and stayed there through the storm and its aftermath and wasn’t there with his team, I thought was very surprising and concerning, as well,” she said. “I think the customers would be concerned about this.”
Moreno, who oversees utilities in the city, one of the few places outside the PSC’s authority, also signaled support for Campbell’s proposal to claw back 20% of Entergy’s next storm repayment for ratepayers, according to the news site.
“It may not be able to stand up to legal muster,” Moreno said, “but maybe it brings Entergy to the table to at least be able to come up with additional options rather than just say to the ratepayers, you pay for it all.”the cenbt