A coalition of environmental, racial justice, and consumer advocate groups has renewed its attempt to stop the construction of a power plant in eastern New Orleans, arguing that the city’s utility consultants essentially acted as judge and jury in the approval process and the city leaned in favor of the plant from the outset.
On Monday, the groups filed a lawsuit against the New Orleans City Council and petitioned for a rehearing to force the council to reconsider its approval of Entergy New Orleans’ application for a $210 million, 128 megawatt power plant. The council approved the natural-gas plant on March 8 by a 6-1 vote.
The coalition is made up of the Alliance for Affordable Energy, the Sierra Club, the Deep South Center for Environmental Justice and 350 New Orleans.
Their lawsuit, filed in Orleans Parish Civil District Court, asks a judge to require the council to reverse its decision, amend its decisionmaking process and hold a new hearing. They’ve asked the judge to delay proceedings until the council decides on their request to reconsider its decision.
Monique Harden, assistant director of law and policy for the Deep South Center for Environmental Justice, said the council can either grant the rehearing or defend against the lawsuit.
“The ball is in their court,” she said.
In an emailed statement, Entergy New Orleans spokeswoman Charlotte Cavell said the groups’ “latest attempts to overturn the Council’s decision are meritless.”
Entergy argued the city needs a “peaking” power plant to provide electricity during high-demand periods in order to avoid a rare scenario that would cause cascading outages throughout New Orleans.
Opponents said there are cheaper, cleaner ways to minimize that risk. Entergy estimated it could eliminate that risk by upgrading its transmission system, at a cost of $57 million. But Entergy never conducted a complete analysis of the transmission fixes, and it was never presented to the council as a viable option.
Cavell said opponents were included in the council’s proceedings “and produced no analysis to support their claims.”
Those groups said Entergy never created the transmission analysis that the council ordered it to produce, and the council and its consultants are obligated to pursue every option that best fulfills the public interest.
Council’s consultants acted as fact-finders and advisors
In their lawsuit and their request for a rehearing, the groups say the council’s approval process was flawed, biased and violated their due process rights.
It included an unusual, weeklong evidentiary hearing in December, overseen by a judge. Opposing parties presented opening and closing arguments, and they questioned and cross-examined witnesses.
“The City Council is generally a legislative body, but in this case it was actually working in a quasi-judicial way,” Harden said. She said this setup created a higher standard for protecting due process rights, which weren’t met.
In their filings, the groups are particularly critical of the council’s Utility Committee advisors, arguing they had a conflict of interest.
While most utilities are regulated on a state or regional level, New Orleans is in the unusual position of regulating its own power company. The council’s regulatory office relies heavily on its consultants, paying them 96 percent of its $7.2 million annual budget in 2013. That money ultimately comes from Entergy’s customers.
The consultants acted as the fact-finders and advisors for the city council, and they drafted the resolution approving the smaller of two proposed power plants. But they also argued in favor of a new gas plant throughout the proceedings and voiced their support for it even before the process began, the opponents argue in their filings.
During the evidentiary hearing, the consultants argued for a new gas plant and reported back to the council on the various arguments and options. No councilmembers were present during the hearing.
The coalition contends that the council cannot “set up an adjudicative proceeding in which the same Advisors participate as an adversarial party with a view as to the appropriate outcome and as advisors to the Council.”
The New Orleans Inspector General has criticized the city for its overreliance on consultants and their conflicting positions as both advisors and advocates. “This dual role meant that the findings and recommendations made by the outside consultants went mostly unchecked,” the office said in a 2015 report.
The Inspector General concluded that the interests of individuals and small businesses were underrepresented in the city’s regulatory decisions.
2015 agreement called for new power plant
The groups also claim that outcome of Entergy’s application was influenced by a little-noticed deal between Entergy and the city council in 2015, which compelled Entergy to pursue the creation of at least 120 megawatts of new “peaking” power generation in New Orleans. The agreement specifically mentioned the Michoud site in eastern New Orleans as one of two possible locations.
The plant approved in March is a 128 megawatt “peaking” plant on the Michoud site.
That agreement went largely undiscussed throughout the proceedings. Harden said the consultants, who were involved in crafting the agreement, were hesitant to talk about it. “They didn’t want to acknowledge it,” she said. “They tried to pretend it didn’t exist.”
At one point in the evidentiary hearing, the consultants had testimony about that agreement struck from the record, according to the rehearing petition.
Harden said that deal may have created a bias among city councilmembers and their consultants throughout the proceedings. She also questioned how the city council concluded in 2015 that the city needed 120 megawatts of additional power capacity and why the public wasn’t informed that this deal had been struck.
“We’re hoping that through this rehearing, the city council will be forced to reckon with this,” she said.
It’s unclear whether or how the council would have to consider the rehearing petition, nor whether it would be taken up by the current council or the new one that takes office in May.