Lately, public scrutiny has shined a bright spotlight on Entergy New Orleans’ $1 billion Operation Gridiron. The New Orleans City Council has been rightfully cautious, given the fees that would hit residents and the recent evidence of company deceit in pitching their plans to the council.
Operation Gridiron is highly visible, taking center stage. But behind the scenes,Entergy is pushing multiple other measures out of public view that could affect residents just as much — if not more.
As soon as April, the Louisiana Public Service Commission (LPSC) could act on an Entergy-backed policy that would severely limit access to the regional competitive market for buying electricity-generation capacity.
The nation’s electricity grid is divided into many regions and operators that transfer power back and forth. Louisiana is a part of a 15-state regional grid known as MISO (Midcontinent Independent Systems Operator).
Proposal 1: Pushing to make our power more dependent on Entergy, limiting lower-cost options
The Entergy proposal before the LPSC would mean less access to lowest-cost capacity on that grid, making our power more dependent exclusively on Entergy-owned generators, whatever the cost may be.
That’s good if you’re an Entergy shareholder, bad if you’re an Entergy customer.
If LPSC approves a “Minimum Capacity Obligation” (MCO) measure with severe limits, utilities in Louisiana would only be able to source a maximum of 10 percent of their electricity capacity from the competitive regional market.
Utilities must be capable of providing power for their customers, and to maintain reliability and manage costs, they are currently allowed to provide either power they generate, from other resources they (1) own or (2) have contracts with, or from (3) an annual competitive auction.
In 2022, the Federal Energy Regulatory Commission (FERC) rejected a proposal from MISO for a region-wide Minimum Capacity Obligation that would have required utilities to have capacity to cover 50% of their power needs either by owning resources or or contracting for them, which would have limited participation in the competitive market. The FERC’s rejection stated that MISO’s 50% proposal was not reasonable and found Entergy’s arguments for it unpersuasive
But the Entergy-backed policy in Louisiana goes even further, and would require that at least 90% of the utility’s annual power requirements must either be owned by the utility or under exclusive contract for the year, even if there is less expensive power in the annual competitive auction.
Again, this benefits utility Louisiana shareholders, not Louisiana customers.
The effects of this go beyond Entergy customers. Electric cooperative members could see their bills rise too, because their co-ops will be forced to buy nearly all their capacity from generators in the region like Entergy and Cleco.
In nearly every other state in the MISO grid, regulators like LPSC maintain full flexibility to send utilities to the competitive market for some of their electricity reliability purchases.
If the LPSC were to tie its hands from accessing this market, they could essentially be pre-signing a blank check for Entergy to build any power plant they say they need in-state. Utility regulators clearly should do no such thing.
Proposal Two: Attempting to derail new energy transmission, to maintain Entergy monopoly
Entergy customers could also face higher bills if a body called the Entergy Regional State Committee (ERSC) is able to derail new electricity transmission that would better connect Louisiana to other states in the MISO grid and other neighboring grids.
This move would also perpetuate Entergy’s monopoly, in grid infrastructure and electricity supply.
If Louisiana was better connected to other grids through long-range transmission, low-cost wind power from states like Illinois or Iowa could be used to serve electricity demand here. A recent report found that the status quo enables Entergy to net $930M annually in additional operating profits, by limiting low-cost power imported from elsewhere.That’s $930 million extra a year that Louisiana and Arkansas customers are paying to keep the lights on.
The ERSC’s current proposals in MISO’s long-range transmission planning work are poison pills so infeasible or unfair that they ensure no progress will be possible.
New Orleans, because of its local clean-energy policy, would be stuck with an outsized share of transmission costs. No one should ever agree to that, especially not the New Orleans City Council representative that rotates through the ERSC.
Proposal Three: Trying to squelch competitors’ transmission lines
Finally, a bill introduced at the Louisiana legislature this year would further maintain Entergy’s stranglehold on resources flowing through the state. Senate Bill 108 makes it difficult for a non-Entergy-controlled entity to expropriate land, with the intent of blocking a proposed transmission line that would move low-cost power from Texas through northern Louisiana into Mississippi. It would also block any similar projects in the future in Louisiana.
When competition is eternally squelched in favor of monopoly control,consumers pay more and quality is compromised, in this case the reliability and affordability of our electricity service. Entergy customers in Mississippi are getting hit with this right now, after Entergy Mississippi worked with the governor and legislature there to skirt customary regulatory oversight and get carte blanche to build expensive two new plants for big Amazon data centers — at consumer expense.
By wielding its influence to prevent better regional grid infrastructure that could bring in lower-cost power from other states, Entergy ensures its own financial gain in the power-plant construction business. Customer bills keep rising.
What’s happening in Mississippi now is a reminder of what could again happen here. To prevent that, daylight is the first step.
With Operation Gridiron, we’re starting to see the good that can come with exposure and scrutiny. Residents get a say, and regulators step up.
We need that same level of spotlight and action brought to Entergy’s other activities, which are still kept deep in the background.
We have to start getting beyond Entergy’s iron grip. We need to look out for our communities’ bottom line, at a time when energy bills have skyrocketed, along with housing, insurance, and other financial burdens.
Our city and state energy regulators need to stop supporting the status quo — Entergy’s monopoly — and open up more access to lower-cost power.
Logan Atkinson Burke is Executive Director of the Alliance for Affordable Energy.