New Orleans City Council President Helena Moreno, who chairs the council’s utility committee, said on Tuesday that she is in favor of launching an independent and comprehensive management audit of Entergy New Orleans following a flurry of controversies that have plagued the company over the first few months of 2021. 

Since the year began, the New Orleans City Council has held two emergency meetings related to Entergy failures, opened an investigation into high January bills, opened a formal forensic investigation into power outages on Mardi Gras night and joined a $1 billion complaint against Entergy for mismanagement of its Grand Gulf Nuclear Station. The company is also trying to figure out if and how scammers may have gotten access to customer data. 

The Energy Future New Orleans Coalition, a local advocacy group, sent a letter to Moreno and the other council members on Monday urging them to order a comprehensive audit of the company’s operations.

“Entergy’s cascade of failures necessitates a management audit to provide the Council with honest and trustworthy answers about weaknesses in Entergy’s business and operational practices,” the letter said. “Please take the necessary steps to bring this embarrassing and dangerous pattern of failed and incompetent management to an end. The first step is an independent management audit of Entergy New Orleans, which only the Council can order.”

Although no official action has been taken yet, Moreno said at a Tuesday utility committee meeting that she would be moving forward on authorizing an audit. It was not immediately clear on Tuesday if opening an audit would require a full City Council vote.

“I already responded back to all of them that yes, I would do a management audit and move forward with that based on their recommendations,” she said, referring to the EFNO coalition letter.

“The Chair agrees it’s necessary to conduct an audit of management because of the clear failures in communications and operations experienced on Mardi Gras night, as well as the continuing service and billing issues,” said a follow up statement from Moreno’s office. 

Rolling blackouts on Mardi Gras

At Tuesday’s meeting, Entergy officials gave a presentation on one of their most recent controversies: rolling blackouts on a frigid Mardi Gras night. Entergy recently revealed that due to an error, the company accidentally shut off four times the amount of power it was supposed to, meaning that over 17,000 customers unnecessarily lost power.

The blackouts that occurred on Mardi Gras evening were not typical. When the lights go out in New Orleans, it is almost always the result of a failure in the electric distribution system, like a downed power line or pole. But the Mardi Gras outages were implemented intentionally by the utility due to power shortages caused by the unusually cold weather.

The winter storm that hit the region during Mardi Gras caused similar issues all across the south, most notably in Texas. The plunging temperatures drove up energy demand as people turned their heaters up. At the same time, the weather knocked out some power generation that couldn’t operate in the cold weather. 

When customers try to use more electricity from an energy grid than is available, the consequences can be catastrophic, causing long-term blackouts and expensive equipment failures.

Generally, before that bleak scenario plays out, energy systems will implement rolling, temporary blackouts to force a demand reduction. But the decision to do that isn’t made by Entergy New Orleans. It is made by Midcontinent Independent System Operator, or MISO, which manages a regional energy grid that goes from Louisiana, up through the midwestern US to Manitoba, Canada. Entergy New Orleans is part of MISO South, which includes most of Louisiana, Mississippi and Arkansas as well as a portion of eastern Texas. 

On Mardi Gras, MISO South made the decision that utilities had to start disconnecting customers and “shed load” to avoid a larger system failure. It then communicated to all the member utility companies, including Entergy New Orleans and Entergy Louisiana, exactly how many megawatts of power they need to cut off. 

Entergy officials said that this type of “load shedding event” hadn’t happened in 20 years. 

MISO told Entergy New Orleans to cut off just 26 megawatts of power. But the company accidentally shut off 105 megawatts of power to Entergy New Orleans customers. Overall, roughly 25,000 customers, or 12 percent of New Orleans energy customers, lost power that night for a maximum time of just under two hours, according to a recent letter from Entergy New Orleans CEO David Ellis.

“If everything would have worked as planned, the 26 MW targeted for ENO would have affected approximately 7,800 customers, or 4 percent of the base,” Eli Viamontes, the vice president of utility distribution operations for Entergy, said on Tuesday. “We understand that components of this process did not work as planned.”

He explained that the company uses an automated system to manage the rolling blackouts.

“During an event, the operator’s role is strictly to enter the megawatts and trigger the automated process, where the system then takes over until the target megawatts is reached,” Viamontes said. 

Entergy identified two problems in that process that led to the unnecessary, additional outages in New Orleans. The first and most significant cause was that 60 megawatts of load shed that was supposed to happen in the Entergy Louisiana region was accidentally done in the Entergy New Orleans region. 

“New Orleans alone shed half of the load for the entire state,” Moreno said.

The second problem was that some of the electricity shutoffs done within New Orleans weren’t communicated back to the automated system implementing the rolling blackouts. That problem meant that 19 megawatts worth of power shutoffs in New Orleans weren’t counted toward the 26 megawatt total that MISO demanded. 

Aside from the unnecessarily high number of electricity disconnections, council members had questions about where those outages occurred. In particular, they’ve been questioning the company about why a key Sewerage and Water Board water pumping facility lost power. 

Entergy officials said that since that night, the company had started working closely with the Sewerage and Water Board to make sure key facilities are left out of future rolling blackouts.

But Council members questioned why there wasn’t a process in place to do that already. The company has an annual review process for its rolling blackout procedures, including one in April 2020.

“We’re having an annual review, and the annual review failed to catch the fact we had items mismarked or mislabeled or whatever the technical term is,” Councilman Jay Banks said.

“I hate to say it, it’s just a complete failure on your part,” Moreno said, “And I get you’re admitting it and I get you’re changing things, but I mean, definitely the ratepayers were left in the dark and the cold because of mistakes made by the company. If y’all had taken all the necessary steps, this wouldn’t have occurred.”

Scam targets ratepayers

The council also questioned Entergy officials over a recent report from WWL-TV about scammers pretending to be Entergy debt collectors. The general idea is to call customers, tell them that they owe money and that they’ll be disconnected in mere minutes if they don’t pay. According to the WWL-TV report, however, some of the scammers seem to be aware of exactly how much some customers owe to the company, making the scam all the more convincing.

Entergy officials on Tuesday said in a presentation that if there were data leaks, it wasn’t coming from them or their vendors. 

“There is no indication that Entergy or vendor systems divulged or were the source of the scammer’s information,” said Entergy Chief Security Officer Chris Peters. 

“If you all have found that apparently nothing may have been compromised, then what is the explanation for these individuals having their very specific billing information in the hands of someone else?” Moreno asked.

First, Entergy officials questioned whether the scammers actually did get access to customer information. In the WWL-TV story, one woman says she got a scam call demanding payment for a $200 deposit and an $85 charge. The woman told WWL-TV that she did, in fact owe those amounts. But Entergy officials said the scammer’s information was wrong.

“The scammer did not have the correct information,” Ann Delenela, Entergy’s chief information officer, said on Tuesday.

Delenela said that the woman didn’t actually owe that money on her account. The WWLTV report notes that the $85 charge was waived and she was credited for the $200 deposit she owed.

Moreno said that by her understanding, although scammers may have not had up to date information, they did have information about the woman’s account that was very recently true. Delenela said she could only speculate about how that could be possible, maintaining that if any breach occurred, it came outside of Entergy’s systems.

“When you have email involved, when you have other technologies and platforms involved, by the time the customer receives that information, it passes through a lot of technical network and infrastructure. All along the way, there are possibilities where the information might have been compromised or might have been interfered to gain any kind of information.”

Moreno asked the council’s utility advisors and the Council Utilities Regulatory Office to do a “thorough review” of Entergy’s vendor risk program, which is meant to ensure that third-party vendors with access to Entergy data have proper cybersecurity protocols in place.