The City Council’s utility committee unanimously approved a resolution on Tuesday that states that City Council members won’t take campaign contributions from a number of sources related to the council’s regulatory authority over Entergy New Orleans. The resolution also “encouraged” council candidates who aren’t currently council members to abide by similar rules.
“Our people must have confidence in the system of regulation and that this system is free from undue political influence,” Councilwoman and utility chair Helena Moreno said. “This resolution explains that council members and candidates for council should not take contributions from Entergy New Orleans or any Entergy affiliated companies including its parent company or sibling operating companies.”
The resolution still needs to be approved by the full City Council. The four council members to vote in favor during Tuesday’s committee vote were Moreno, Donna Glapion, Joe Giarrusso and Jay Banks.
The off-limits donors listed in the resolution include Entergy’s political action committee, the city’s contracted utility consultants and any employee of Entergy New Orleans or it’s parent company Entergy.
The resolution isn’t binding, meaning that council members and candidates wouldn’t face any real repercussions for violating it other than the publicity of going back on a public promise.
The council has passed similar resolutions several times since 2006, most recently in 2016. The resolution advanced on Tuesday expands on those previous resolutions in two ways. First, while previous resolutions had only covered contributions from Entergy’s political action committee — ENPAC — the new resolution includes all Entergy employees as well.
Second, the resolution for the first time includes City Council candidates who are not currently sitting members of the council. The resolution says that candidates are “encouraged” to abide by the same rules the council has set for itself.
There are a couple rules in the resolution that only apply to sitting City Council members, not all prospective candidates. The first is a ban on campaign contributions from any person or entity with a professional service contract with the City Council, whether or not the contract is related to utility regulation. The resolution also says council members shouldn’t take contributions from any respondents to a utility-related request for proposals or request for qualifications — a process used to competitively award contracts — for the duration of that process.
Jesse George, the New Orleans policy director for the Alliance for Affordable Energy, applauded the measure, but said that the council should look to codify these voluntary restrictions in an ordinance.
“The alliance urges this committee to explore a more permanent solution in the form of a codified ordinance that would make the passage of similar future resolutions unnecessary,” he said.
Moreno’s chief of staff Andrew Tuozzolo told The Lens that he thought an ordinance was a good idea and that Moreno’s office would be interested in working with advocates to craft one.
The resolution seeks to avoid undue corporate influence, or the appearance thereof, in two major council responsibilities — regulating Entergy New Orleans and awarding multi-million dollar utility consulting contracts.
In most of the country, utility regulation occurs at the state level. In Louisiana, for example, the vast majority of the state is regulated by the Louisiana Public Service Commission. New Orleans is in the rare position of regulating a local utility at the city level. There are other cities that have local utility regulatory control, but most of those arrangements include a publicly owned utility, rather than a private, investor-owned company like Entergy New Orleans.
Elections for the Louisiana Public Service Commission are notoriously dominated by contributions from businesses that are directly regulated by the commission or have business interests that will be impacted by its decisions. During Commissioner Eric Skremetta’s successful 2020 reelection bid, The Advocate reported that 70 percent of his $370,000 in reported donations came from lobbyists and company officials with business in front of the commission.
“There are examples across the country, and in this state as well, of regulatory boards captured or improperly deferential to those regulated,” Moreno said. “This resolution seeks to put on record that regulators — this council — should not take campaign contributions from the regulated.”
Tuesday’s resolution also seeks to avoid undue influence in the awarding of the City Council’s lucrative utility consultant contracts. Most contracts with the City of New Orleans are awarded through the city’s executive branch — the Mayor. The City Council, on the other hand, issues relatively few contracts on its own.
The biggest chunk of the limited contracts under council control is the $6 million to $7 million the council typically spends every year on legal and technical consultants for utility regulation. And as The Lens has previously reported, the process of awarding those contracts has historically been subject to influence by the political connections and contributions of the consulting firms.
That’s one reason why, according to former council members, those contracts had been controlled by the same three central consultants for nearly three decades until 2018 when two of them passed away. The third, Clint Vince, is still the council’s primary legal utility consultant.
After The Lens reported on the relationship between those consultants and the City Council, Moreno started to work to end the council’s near total dependence on consultants for utility regulation and start building in-house capacity. That process led to $1.2 million in savings on consultant fees in 2020, according to the head of the Council Utilities Regulatory Office Erin Spears.
The current consultant contracts, which are usually granted for a period of three years, expire at the end of this year. The contracts will go to a request for proposal process later this year.
All seven seats of the City Council will also be up for grabs later this year starting with primary elections on Oct. 9.