The New Orleans City Council’s utility committee on Thursday chose not to act on a resolution to impose a $5 million fine on Entergy for its role in a scheme to pay actors to support its proposed power plant at council meetings. The resolution will instead be considered at the full City Council meeting next Thursday, Feb. 21.
The resolution represents a punishment, but for plant opponents in the packed chamber, it isn’t justice. Council members had earlier proposed a revote on the plant. But this week, they announced that they would withdraw that measure, instead opting for the fine and a set of conditions imposed on the plant, including a process intended to control construction expenses and required reporting on plant maintenance, emissions and costs.
“Sometimes I wonder what we even come to these public hearings for,” said Mark Nguyen, a resident of eastern New Orleans who was hoping for a revote on the plant. “All we want is a fair process. Hear our voice, go through this with us.”
The meeting was a heated one, and included one animated exchange between Councilman Jay Banks and Monique Harden, the assistant Director of Law and Policy for the Deep South Center of Environmental Justice. Harden called out Banks for having worked for one of the council’s utility consultants, Legend Consulting Group Limited, up until at least September 1, 2016. The consultants advise the council on utility regulation and, last year, recommended that the council approve the proposed gas plant in eastern New Orleans.
Legend currently gets about $2 million to provide technical analysis to the council. In a bid to renew its contract submitted to the council on Sept. 1 2016, the company listed Banks as its director of governmental affairs.
In an interview after the meeting, he said that his job was to be a “local face” for the Denver-based company to “facilitate meetings and interface with people.”
That position does not appear on any of the financial disclosure statements he has submitted to the Louisiana Board of Ethics. He said it wasn’t necessary.
“I wasn’t working for the other side,” he said. “I wasn’t working for Entergy.”
Under the law, that doesn’t matter. Banks was required to report the names of any of his employers and the income he received from them.
Up until Tuesday, power plant opponents expected Thursday’s meeting to feature a resolution to rescind the council’s March 2018 approval of the plant. But the chair of the utility committee, Councilwoman Helena Moreno, canceled the vote based on new information from Entergy and the council’s utility advisers: Entergy had already spent $96 million on the plant.
If the plant’s approval is revoked, Entergy’s customers could potentially be on the hook for a portion of that sunk cost, one of the advisers, who asked not to be identified by name, told The Lens last month. He could not, however, provide a firm answer as a full legal analysis had not been done.
Entergy hasn’t yet broken ground on the plant itself. The money it’s spent so far has been for pre-construction expenses like equipment and design contracts. The total cost of the plant was expected to be $211 million. But several opponents at the meeting noted that there is no explicit cost cap on the plant yet, leaving ratepayers open to the risk that the power plant will cost even more.
The new resolution requires Entergy to file an application if “becomes aware of the possible need for expenditures above $211 million. Council will then have to review the spending and find it to be prudent before Entergy can recover those costs.
The resolution advanced on Thursday replaced the original revote resolution and largely mirrors a settlement offer that Entergy sent to the Council on Jan. 30. Some critics accused the council of caving to the corporation.
“Our question is, what will it take?” said Logan Burke, the Executive Director of the Alliance for Affordable Energy, which is currently suing the council over its approval of the plant. “What credibility crisis is enough, what threat or scandal, or response from the citizens is serious enough to warrant that a elected regulatory body say no to this corporation’s wishes?”
If passed, the resolution would direct a portion of $5 million fine to the cash-strapped Sewerage and Water Board for infrastructure improvements. Entergy is prevented from passing the fine onto its customers.
Ghassan Korban, The director of the Sewerage and Water Board, was also present at the Council to discuss how he would use the $5 million. He presented three options for how the money would be spent, all of which address recent failures in the city’s pumping system.
The first option is a $2 million weatherization upgrade to one of the city’s five working turbines that provide power to the city’s water pumps — Turbine No. 6. Currently, that pump can’t be used when the outside temperature dips below 45 degrees without risking “catastrophic” damage. The S&WB’s inability to use that pump in cold whether was one of the reasons New Orleans was subject to a boil-water advisory last November.
The second option would allow the pumps to switch from one Entergy feeder to another more quickly in case of a power outage. A one-second drop in power will trigger the pumps to go offline, Korban says. The new technology, which would cost $4 million, would allow the pumps to switch sources in a tenth of second.
The third option is to upgrade two steam-powered pumps to electrical motors. The S&WB got some more bad press this month when it was discovered that water used to cool steam turbines is recycled back into the drinking supply. The Louisiana Department of Health sent a notice of violation to the S&WB on Feb. 5 over the practice. The upgrades would cost $1.5 million.
During the meeting, Entergy’s general counsel, Marcus Brown, asked for two small changes to the settlement. Both sought to remove the words “sanctions” and “penalties” from the resolution and replace them with “actions.” The changes were denied by the council.
“Marcus, you have to be kidding me,” Moreno said in response to the requested changes. “What you’re asking right now is kind of the old way Entergy would act.”