The New Orleans City Council approved an ordinance on Wednesday to partially delay and reduce an Entergy New Orleans bill increase that’s set to go into effect next week.
But despite those changes, a typical residential gas customer can still expect to see a $10.87 increase to their monthly bill starting in November. Typical residential electric customers are facing a $8.43 monthly bill increase, but not until April.
The City Council also voted on Wednesday to start a planning process for storm hardening and resilience for the city’s electric grid.
Entergy New Orleans requested a major bill hike from the City Council — the company’s regulator — in July. The request called for a $14.21 monthly gas bill increase and a $11.03 electric bill increase for typical residential customers.
The potential $25 a month increase ruffled feathers at the time. And it received renewed ire from some customers and lawmakers following Hurricane Ida, which caused millions of dollars in storm damage that will likely be paid for by increasing customer bills.
“We’re hurting inside of our communities,” resident Katherine Prevost said on Wednesday. “When you look at your Entergy bill and have a $400 utility bill, you have to make a choice. Do you pay this bill or do you pay your doctor bill? Do you go get your teeth fixed or do you pay this Entergy bill?”
The council’s utility advisors examined Entergy’s July request and found that the company had overestimated its revenue needs in a number of categories, and recommended the council significantly reduce Entergy’s requested increases.
After those adjustments were made, the impact to a typical residential bill was reduced from $25 a month to $19.30 — $10.87 increase for gas bills and a $8.43 increase to electric bills.
Both of those increases are technically going into effect starting in November. But on Wednesday, the council approved a plan to provide five months of bill credits that will temporarily offset the electric portion of the bill increase.
Moreno said that instead of fighting Entergy to delay those increases and risking a lawsuit from the company, the quickest way to find immediate relief was through bill credits. She said the plan “will give customers comfort and safe harbour from bill increases during this critical time.”
The council advisors identified $17.4 million in unused Entergy funds that the council had direct and unilateral control over. Wednesday’s ordinance allocates that $17.4 million to mitigate the increase in electric bills from November through March.
“This buys us five months of no electrical bill increases to search for additional means to find additional mitigation measures,” Moreno said.
Moreno’s Chief of Staff, Andrew Tuozzolo, said the five month delay will buy valuable time. First, he said that it allows for another five months of pandemic recovery, more time for people and businesses to get back on their feet.
”Right now, no one can handle this,” he said.
He said the five months will also give the council time to explore other ways to lower customer bills. He mentioned that the council recently opened a management audit into the company, which could identify potential savings or excess costs. He also said that the council will be resetting the company’s billing rates next year through a process called a Formula Rate Plan. That process is set to begin next April and conclude in late summer.
Unlike the delayed increase to electric bills, the gas bill increase is set to start on Nov. 1 without any mitigation measures in place. Moreno introduced another ordinance on Wednesday that could provide some relief, but it still wouldn’t blunt the full effects of next week’s gas bill increase.
The ordinance, which the council hasn’t taken a vote on yet, would provide some gas bill support using $5 million in federal funds out of the roughly $380 million the city expects to get through the American Rescue Plan Act, a COVID-relef bill passed by Congress in March.
But even if that ordinance is approved, it wouldn’t exactly offset the bill increase. Tuozzolo said that it’s likely those federal dollars could only be spent to help people who fell behind on their bills during the pandemic, rather than offsetting the upcoming increase on all gas bills.
That measure received support from Jesse George, New Orleans Policy Director for the Alliance for Affordable Energy.
“This increase in rates and fuel charges will cause much suffering during the harsh winter months unless the Council takes action to assist ratepayers facing increasing gas bills,” George said. “Securing $5M in ARPA funds is absolutely critical to prevent this.”
Storm hardening plan
Also on Wednesday, the council voted to initiate a process to create a “system resiliency and storm hardening plan” by March of next year.
The issue of electric grid resilience was brought into sharp focus in the aftermath of Hurricane Ida, which left most of the city without power for nearly 10 days, in which time 10 people died due to excessive heat.
“As Hurricane Ida made very clear, resilience isn’t a buzz word,” Alliance for Affordable Energy Executive Director Logan Burke said on Wednesday. “It’s life or death in this city. And it’s very clear that having access to power is fundamental for us to protect life, health and safety.”
Power outages have long been a thorn in the side of New Orleans residents. The City Council has pushed the company on resilience in recent years, including a prudence investigation into the company that led to a $1 million fine for Entergy’s failure to adequately maintain the grid.
But the council’s actions on electric reliability have mostly focused on how the system performs on normal days without extreme weather. A major line of inquiry has been why the system fails so frequently on fair weather days, when the sun is shining and the wind is calm.
The new process the council initiated on Wednesday, on the other hand, will be specifically focused on how the system holds up during the most extreme weather events, which are increasing in frequency and severity due to climate change.
A major goal of the process will be to have a plan in place for if and when federal funding is made available for these types of infrastructure projects.
“We must have a plan to draw federal dollars for climate resilience and that plan must be developed with input from all stakeholders,” Moreno said. “I have been working aggressively to win Federal support for grid restoration and enhancement, and I want to move as quickly as possible to identify the investments we can make to give us better resiliency and security into the future.”
Burke noted that since Ida, organizations around the city have begun working to plan for a more resilient energy grid, and that the council’s process will allow all of them to come together and create a unified strategy.
“This docket that the council is putting forward today is a real opportunity for all these parties to work together and sort this out,” she said.