Public Service Commission Okays Entergy Rate Hike
If you're an Entergy customer, your bill will soon be going up by $8 a month.
The Public Service Commission approved that increase during its meeting on Tuesday. That $8 surcharge will be applied to Entergy customers' bills for the next 15 years.
According to Commissioner Mike Francis, the final tally was 4-1 in favor of the measure. Commissioner Foster Campbell said "no" to proposal well before the official vote. He described Entergy's request as "greed." Commissioner Erik Skrmetta voted "yes." He applauded Entergy for restoring power to its customers as quickly as they did.
For Commissioner Mike Francis (R-Crowley), the rationale behind his "yes" vote was simple.
"A lot of people don't understand that all of these poles and lines that were blown down by the storms belong to the rate payers, so we have to pay for them when they're repaired," Francis said. "Whenever it happens, we see how much damage there is and then we borrow the money to replace them. The main question is: How much money are we going to borrow, how much the interest rate is, and how long will it take to pay it back? Once we get the final figures, the commission will look at the total debt. With Katrina, we spread it out over 10 years with the bill. You'll have a piece of it on the bill until the debt is paid."
That money will be used to offset the company's repairs costs stemming from Hurricanes Laura, Delta, Zeta, and Ida and the 2021 winter storm. In November, Entergy Louisiana officials told public service commissioners that the damage from the hurricanes alone cost the company between $4 billion and $4.4 billion. The Public Service Commission approved a $1 billion loan at that time to allow the company to cover some of the costs in the short term.
According to Entergy, the rate hike will help the company pay down another $3.2 billion in storm costs through a low-bond 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," Entergy officials said in a press release.
Entergy says the surcharge will be a line item on their bills similar to the surcharge implemented after Hurricanes Katrina, Rita, Gustav, and Ike. The $8 amount is not a fixed amount. Officials say that could changed if Entergy receives federal funding.
"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," the release stated. "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."