The New Orleans City Council voted on Thursday to prohibit Entergy New Orleans from disconnecting electricity services due to unpaid bills until July 1. The company had previously promised to suspend service disconnections until May 31. But Thursday’s resolution not only extends the moratorium, it changes it from an informal assurance to an enforceable regulation.
The resolution also sets up a process for Entergy New Orleans to start tracking expenses and lost revenues related to the coronavirus crisis. Utility regulators around the country have taken similar steps in anticipation that energy companies will be asking for bill hikes next year.
But Councilwoman Helena Moreno, who chairs the council’s utility committee, said that Thursday’s vote was only the first action the council was planning to take to protect New Orleans residents. She said that at the council’s next meeting on June 4, they would be voting on a proposal to direct Entergy to dedicate $22 million to a new bill assistance program.
“We recognize that we need to provide much more than a moratorium on shutoffs. We believe that the burden of built up bills is incredibly stressful for people who have faced job loss. … That’s why today I’m introducing the framework for the City Council’s Cares program,” Moreno said.
According to Moreno, the proposed program would provide a maximum of $400 in Entergy bill credits to eligible residential customers. The payments would be spread over four months, with a maximum of $100 each month. Moreno said that the average monthly residential bill is $110. She said the program could provide assistance to upwards of 50,000 households.
“Bottom line, this is a new endeavor, something we’ve never tried before. It is likely the only program of its scale and scope in the country.”
Moreno noted in a Thursday press release that for customers enrolled in the program, “all current late fees would be waived in concert with the application of the bill credits.”
Moreno’s Chief of Staff Andrew Tuozzolo told The Lens that late fee forgiveness would apply to debt accumulated during the crisis, starting with the April billing cycle.
Moreno said she expects the program to go live in June and start issuing credits for the July billing cycle.
“The program is for those who are struggling the most,” Moreno said. “Those who, due to the recent and unexpected loss of pay, aren’t sure exactly how they’re going to make ends meet.”
She said that residents who want to participate in the program will be required to show proof of unemployment benefits since March 29 — the effective date for the CARES Act, the federal stimulus package that included significantly expanded unemployment insurance eligibility. Just like those new federal unemployment guidelines, the City Council Cares program would be open to gig and contract workers, as well as full time employees.
“This will come at no additional cost to ratepayers,” Moreno said.
She said the program is funded through two sources. The first is $15.5 million from an emergency disaster reserve fund. Moreno said that Entergy New Orleans has two storm funds, one with $15.5 million and another with $67 million.
“All parties agree that the $15.5 million is not necessary to maintain a sufficient buffer to secure the utility for future disasters,” Moreno said.
The remaining balance of the $22 million will come from a 2018 settlement at the Federal Energy Regulatory Commission, she said.
It’s not clear how much debt is accumulating among Entergy New Orleans customers. The company has repeatedly declined to share that data with The Lens, including for this article. But one possible indication of how many people are falling behind on their energy bills is how many people are falling behind on their water bills.
Yesterday, The Times-Picayune/New Orleans Advocate reported that 13,000 Sewerage and Water Board customers had fallen behind on their bills since the beginning of the coronavirus crisis. If you add those on top of the 30,000 customers who were already behind on their water bills before the crisis, 30 percent of Sewerage and Water Board customers are currently in debt to the utility, the paper reported.
Last week, The Lens reported that New Orleans was left out of statewide consumer protections passed by the Louisiana Public Service Commission. New Orleans wasn’t included because the Louisiana Public Service Commission, or LPSC, doesn’t have jurisdiction over Orleans Parish. While most U.S. cities rely on state utility commissions, New Orleans regulates its own municipal energy company — Entergy New Orleans — through the City Council.
The LPSC placed a moratorium on service disconnections early in the crisis on March 13. Then, in late April, the commission extended that protection and added a new moratorium on late bill payment fees for charges to customers between March 13 and the end of the order. Both protections now last until Louisiana enters “phase two” of the White House’s plan to reopen the economy, which will see bars, gyms and large venues open for business with some new protocols. Louisiana entered phase one of reopening the economy on May 15, which is expected to last at least 14 to 21 days.
The City Council, until Thursday, hadn’t passed any formal regulations since the coroanvirus crisis began, instead relying on informal assurances from the company.
“Until now the company has been voluntarily committing to suspend service shutoffs,” Moreno said on Thursday. “But some advocacy groups have requested reassurance with an official council order.”
In response to The Lens’ article, some readers commented on social media that the lack of local action was proof that the city’s energy utility should be regulated at the state level, rather than the City Council. Moreno took the opportunity to refute that argument and make the case that New Orleans residents are better served by local regulation.
She said that the city’s new moratorium would likely be extended past July 1.
“As that date approaches, we will assess once again whether another extension will be necessary,” she said. “The order by the state extends until the state enters phase two. Depending on how things go we could be entering phase two sometime in June.”
And she pointed out that the Council Utilities Regulatory Office had been working on the City Council Cares program for weeks.
“This program is above and beyond what we’ve seen from any other power utility regulator in this country. It shows yet again the added benefit of having the council, the people’s representatives in this city, be the regulating authority over our utilities to ensure that the ratepayers of this city are being put first. These steps are significant, but hardly the end of our efforts to help our community through these difficult times.”