Entergy adding surcharge to customers' bills for 15 years
NEW ORLEANS - An independent regulatory board has given Entergy the go-ahead to add an additional charge to customers' bills for the next 15 years.
The Louisiana Public Service Commission voted 4-1 in favor of the increase, which Entergy says will help it recoup more than $3 billion spent on repairs associated with major storms in recent years. Customers could start seeing the charge, which the company said will cost "around" $8, on their bills as soon as May.
Entergy refused to do an interview with WBRZ about the additional charge for its customers, instead releasing the following statement.
"On Feb. 23, the Louisiana Public Service Commission approved Entergy Louisiana’s request to finance $3.2 billion in storm costs using low-cost bonds through a process called securitization. Securitization permits the costs to be financed with generally lower-cost capital and is projected to save customers billions over the long-term as compared with other methods of financing.
The costs being financed are related to restoring the electric system after 2020 hurricanes Laura, Delta and Zeta and the February 2021 winter storms (approximately $2.2 billion), with the remainder being related to replenishing reserves for future storms (approximately $290 million) and creating an escrow addressing a portion of restoration costs following Hurricane Ida (approximately $1 billion).
To lessen the impact to customers’ bills, the costs will be collected over an expected 15-year term through a line item appearing on monthly bills, similar to recovery for previous hurricanes like Katrina, Gustav, Ike and Isaac. The monthly bill effect for a 1,000-kWh residential customer is estimated at around $8 a month but could change based on interest rates at the time of issuance of the bonds. It’s also worth noting that while the costs for hurricanes Gustav, Ike and Isaac are still being collected, the charges for hurricanes Katrina and Rita rolled off bills in 2018 and the charges for Gustav and Ike are expected to expire in August. While the new monthly charge could be included on bills as early as May, it’s contingent upon when closing on the financing occurs.
Entergy Louisiana is continuing to advocate for federal disaster relief, and to any extent the company is reimbursed for a portion of storm costs, it will reduce future bill impacts related to Ida. In addition, the company is continuing to seek federal aid to bolster existing grid resiliency plans and, ultimately, accelerate efforts to strengthen and harden the electric system ahead of future storms. Doing so will help us restore power quickly and safely and avoid costly restoration efforts; however, it is a long-term commitment and one that will take time."