The New Orleans City Council plans to consider a resolution at its Thursday meeting to temporarily prohibit Entergy New Orleans from disconnecting electricity service to customers due to unpaid bills until July 1. The resolution also creates a process for Entergy New Orleans to recover costs from customers associated with the coronavirus crisis — a signal that the current crisis could cause customer bills to increase in future years.
Entergy New Orleans had previously promised to suspend service shutoffs until May 31. But that was only an informal assurance. The new resolution would not only extend the moratorium, but would make it enforceable as a formal regulation.
Last week, The Lens reported that New Orleans had been left out of statewide utility protections passed by the Louisiana Public Service Commission. The new consumer protections included a temporary moratorium on late bill payment fees and a permanent prohibition on late fees for any debt racked up from March 13 to the end of the order.
The new measures and the service shutoff moratorium approved by the Public Service Commission will last until the state enters “Phase II” of the White House’s plan to reopen the economy in which bars, gyms and large venues will open for business with some new protocols. It’s unclear exactly when that will happen.
Those protections covered nearly every utility in the state. But New Orleans was left out, meaning that Entergy New Orleans, a subsidiary of the larger Entergy Corporation, didn’t have to follow those rules.
That’s because the Louisiana Public Service Commission doesn’t have regulatory jurisdiction in Orleans Parish. New Orleans is an atypical American city in that it regulates its own investor-owned utility at the local level through the City Council, rather than relying on the state’s Public Service Commission.
Before the new regulation, which appears on Thursday’s regular meeting agenda, the City Council had not considered any new Entergy regulations since the coronavirus crisis began. Residents can submit public comments digitally on the council’s website.
However, the council’s resolution still doesn’t go as far as the statewide protections. Importantly, the council resolution does not put a moratorium on any late fees. In a April 30 press release, Councilwoman Helena Moreno said that Entergy New Orleans would waive certain late fees “for customers in need who are in contact with the company.”
Entergy New Orleans wouldn’t confirm that they were offering that service, it’s still unclear who qualifies as “customers in need” and it’s unlikely that every Entergy New Orleans customer knows to call and ask about the offering. Entergy New Orleans did not mention the potential suspension of late fees in its own press release from May 5.
Along with creating a service shutoff moratorium, Thursday’s resolution also sets up a process for Entergy to recover costs associated with the response to the coronavirus.
“The Council Recognizes that ENO also may incur increases in certain other expenses related to its response to the COVID-19 outbreak, including but not limited to expenses incurred due to the suspension of disconnections,” the resolution says. “The Council recognizes the need to provide ENO some regulatory certainty by authorizing the use of an accounting mechanism and a subsequent process through which ENO may request future recovery.”
The resolution points to what many utility experts around the country have predicted: energy bills are going to rise in subsequent years because of lost utility revenues during the coronavirus crisis.
Some of the new costs that utilities across the country are facing are common among many industries, like purchasing personal protective equipment to protect employees from infection. Others are more specific to the utility world, such as slumping energy sales in the commercial market.
“ENO may petition the Council, to recover, at a later date, the incremental expenses directly resulting from the effects of COVID-19, including ENO’s proposed method by which such costs shall be recovered.”
One of those methods is a “general rate action,” another way of saying bill hikes for customers.