The end of Entergy New Orleans? Entergy presents options as city council assesses utility changes | Hurricane center

The parent company of Entergy New Orleans on Tuesday opened the door to a severing of ties with the city or a significant change in its regulatory structure in response to calls from members of the city council for a study of alternatives to its monopoly on the network local electric. .

By setting out several options for what could potentially succeed the current utility structure, Entergy Corp. suggested that his preference would be to merge the assets of Entergy New Orleans in the city with Entergy Louisiana, the subsidiary that supplies electricity to Jefferson Parish and other areas of the state and is regulated by the Board of state public. This move would eliminate local oversight of the public service by the city council.

The company said in a press release Tuesday morning that it plans to cooperate with the efforts of At-Large board member Helena Moreno, who chairs the board committee that oversees Entergy, to explore alternatives to Entergy New Orleans. Moreno last week commissioned the studies in response to the failure of eight transmission lines that provide electricity to the New Orleans area during Hurricane Ida.

The loss of those connections to outside power sources left New Orleans completely in the dark for two days after the storm. Many customers in the city have been without power for more than a week, and customers in other parishes have been without power for even longer.

The first step in launching these studies is to hire consultants who could review the city’s options. The council is expected to go ahead and launch an offer for these consulting services this week.

Rod West, the president of the Entergy Corp. utilities group, said in the press release that Entergy has made a major effort to restore power “after the strongest hurricane to hit our region.” He argued that the council’s threatened actions in recent days, if passed, would make it difficult for the local branch to maintain its level of service in New Orleans.

“It is evident that we have reached a critical point in our relationship with city council,” West said. “While we believe that the actions of Entergy New Orleans have always been in the best interests of our New Orleans clients, some board members have publicly expressed a different opinion. Certain proposed actions would prohibit ENO from recovering critical storm restoration costs and freezing previously approved funding mechanisms by the board, thereby inflicting a further financial decline on ENO and negatively affecting ENO’s ability to provide quality service. to its customers. “

Entergy presented four options for the board. Three of these – selling the business to another utility, splitting into a stand-alone business outside of Entergy’s umbrella, and creating a new city-owned utility – are essentially the options on offer. by Moreno.

But an additional proposal would see Entergy New Orleans merge with Entergy Louisiana, which provides electricity to much of the rest of the state. This proposal would remove the public service from the direct oversight of the city council, placing it under the jurisdiction of the State Civil Service Commission. Such a move would reduce the board’s influence over its electricity supplier, which the current board has used to prioritize power restoration as well as to develop longer-term initiatives such as an investment. increased in renewable energies.

Entergy’s press release, however, emphasizes the potential benefits of this option, saying it would lead to lower tariffs and the ability to strengthen the financial position of the combined company.

The company presented the other options as requiring compromise.

Selling Entergy New Orleans to another would keep regulations in the city’s hands, but any advantages or disadvantages would depend on which company purchased the company’s assets, which include 1,800 miles of power lines, 144 miles of transmission lines and power generation which includes the New Orleans Power Plant at Michoud.

The company also noted that the board could split Entergy New Orleans into its own company, but warned that this could lead to financial instability and increased credit risk.

Finally, Entergy included the possibility of creating a utility run by the municipality, although it warned that this could lead to higher funding costs and operating expenses. Such a move would be unprecedented in New Orleans, which has never operated its own electric company.

“The New Orleans City Council and ENO have a long history of working together to find common ground on solutions for customers who solve complex problems and achieve goals important to a sustainable energy future for New Orleans,” West said. “The expected resolution of the council will force it to make an important choice: will the city continue with Entergy as an energy partner or pursue another alternative?

A break with Entergy would mark a sea change for New Orleans, which received power from Entergy or its predecessors for more than a century. It started with the New Orleans Railway and Light Company, founded in 1905, and continued with the privately held New Orleans Public Service Inc., which was later merged with the companies that eventually became Entergy.

More to come on this developing story.