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New Orleans council recommends $1M fine for Entergy, orders rate reductions


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New Orleans council recommends $1M fine for Entergy, orders rate reductions

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Entergy New Orleans serves customers in Orleans Parish and is regulated by the city.
Source: AP Photo

The New Orleans City Council's utility committee recommends fining Entergy New Orleans LLC $1 million for grid reliability problems that caused power outages from 2014 through 2017.

The council's utility committee, which regulates the Entergy Corp. subsidiary, voted unanimously on Oct. 23 to find that Entergy New Orleans "had not acted prudently in the maintenance and repair of its electric distribution system," the council said in a news release.

In 2018, the city council asked its utility advisers to investigate the matter following residents' complaints of an unusual amount of power outages and Entergy New Orleans' failure to provide what council described as "satisfactory information" regarding why its equipment failures caused most of the outages. Entergy New Orleans experienced 2,599 outages between June 1, 2016, and May 31, 2017. In that time period, 56% of those outages occurred during fair weather conditions and normal business hours.

The investigated concluded ENO "did not act prudently in preventing and reacting to the numerous outages." In May, the advisers recommended fining the utility up to $2 million.

"ENO has a primary obligation to provide reliable electric service to its customers," Councilmember Jared C. Brossett said in an Oct. 23 statement. "The investigation confirmed my concerns that they were not living up to this obligation. As a result, tens of thousands of residents, businesses and visitors were severely inconvenienced over the course of several years. I think the fine recommended will go a long way to assuring that will never happen again."

In a separate decision, the council's utility committee also ordered electric and gas rate reductions for Entergy New Orleans customers. The utility's rate filing proposed electric rates that would decrease revenues by about $20 million annually and proposed gas rates that would decrease revenues by $130,000 per year, according to the rate resolution (Docket No. UD-18-07).

If passed, the resolution would also put Entergy New Orleans' return on equity at 9.35%, allow customers to have some or all of their electricity supplied by renewable energy sources, and expand electric vehicle charging infrastructure by offering rebates to customers for installation and partnering with commercial customers to build EV chargers.

"The council recognizes that the people of this city are faced with many financial pressures coming from every direction," Councilmember Helena Moreno, who chairs the utility committee, said in an Oct. 23 statement. "We owe it to them to deliver the best deal we can to reduce their bills and to provide a positive path for the city's energy future for years to come. With the unanimous advancement of this rate resolution, we move one step closer to delivering on those goals."

Both the fine recommendation and the rate reductions will need to be voted on by the entire city council.