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Entergy New Orleans reaches preliminary tax savings agreement

Entergy New Orleans LLC has submitted to the New Orleans City Council for approval a settlement agreement to pass along savings to customers from the recent federal corporate tax reform.

The Entergy Corp. subsidiary said it has agreed, under the direction of the council's advisors, to "flow through" $50 million in near-term benefits to customers by July 2019, while an additional roughly $71 million of tax benefits will go to customers over the longer term.

Entergy New Orleans expects to file the agreement next month, subject to the council's approval, after which a portion of the benefits to be realized through bill credits would begin with the first billing cycle of July.

The company plans to realize the $50 million near-term benefits through approximately $14.1 million in bill credits applied to the total company electric fuel adjustment clause in summer months, roughly $2 million in bill credits applied to the purchased gas adjustment in winter months, bill credits totaling approximately $4.8 million applied to offset purchased power and capacity costs, funding Energy Smart programs through August 2019 in the amount of approximately $13.5 million, approximately $12.8 million of funding for grid modernization, and funding for a $3.2 million smart city pilot.

Entergy New Orleans said customers will also receive benefits in the form of lower fuel costs that will reduce typical residential electric bills from July to December by an average of approximately $11 per month. These benefits are estimated to be over $30 million this year, with some additional benefits to be realized in future years.