State utility wants rate increase to pay for 2016 flood losses
Entergy lost about $5.9 million from unpaid electric bills during the August 2016 floods and now wants its money.
The utility is asking state regulators to allow a surcharge on monthly bills for the roughly 468,000 customers in 20 parishes, even if their accounts were never in arrears. This additional rider to monthly bills would cover the amounts not collected because of orders not shut off the lights and assess late fees on people flooded out of their homes. Entergy sells power to about 1 million customers in 59 parishes.
More than 20 inches of rain fell over two days starting Aug. 12, 2016. Several rivers and more bayous backed water into about 109,000 homes — 41,000 of them in East Baton Rouge Parish alone — and into 6,000 business establishments, according to Entergy’s filing with the Louisiana Public Service Commission. Damages are expected to exceed $15 billion when all is counted.
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The PSC issued three orders beginning Aug. 17, 2016, that forbade utility and water companies from disconnecting customers for nonpayment and from charging late fees on customers in parishes impacted by the emergency. The orders stayed in place until March 2017.
The 2017 order also allowed the companies to collect the revenues they lost during the time the orders were in effect and that’s what Entergy is asking permission to do.
Central Mayor Jr. Shelton said he understands but doesn’t appreciate the actions of Entergy and the other utility companies. His town was under waist-high water for about a week in 2016.
“There were a lot of things that we did, as businesses, as government, as civic groups that were done to help people in a time of need,” Shelton said Wednesday. “And don’t think a single one of them went and tried to recoup those losses.”
Entergy spokesman Michael Burns said Wednesday in an email: “The Louisiana Public Service Commission staff has supported our request in a manner similar to the requests made by other utilities in the region and according to the rules spelled out in the commission’s 2017 order.”
Burns added that the utility donated $500,000 for flood relief and more than 400 Entergy employees did volunteer work during the crisis.
The five elected members of the PSC already have agreed to let Baton Rouge Water Company collect its lost revenues.
Because utilities operate as a monopoly in their service territory, state law gives the PSC the ability to signoff on decisions made by these private companies that impact the rates charged. Generally, a utility company is paid for making and transmitting electricity plus a guaranteed profit. Customers also must pay the costs for restoring power after storms. This month a decade-old surcharge rolled off after the costs for restoring power after hurricanes Katrina and Rita were paid. Customers are still paying for getting the lights back on after hurricanes Gustav, Ike and Isaac.
The flood costs are similar.
PSC staff lawyers determined that Entergy lost revenues of about $5.1 million because the company couldn’t collect late fees and didn’t enforce timely payments by switching off the power to customers. Administrative expenses, such as mailings, added nearly $800,000 more for a total of $5.96 million.
Entergy proposes, and the PSC staff agrees, that customers pay the amount over the next 12 months. The five commissioners would have to agree too, and they don’t meet again until September.
If approved, a Baton Rouge or an Acadiana Entergy residential customer using 1,000 kilowatt-hours of electricity would pay 17 cents more per month for a year. The bill for that customer was $87.90 in August.
A small business using up to 5,000 kWh would see the monthly bill increase by $1.10.
Other Entergy residential customers, mostly in the Florida parishes, would pay 18 cents more for the same amount of electricity. The August bill for those customers was $95.81.
A typical residential customer uses about 1,300 kilowatt-hours of electricity in a month.