The Louisiana Public Services Commission approved a $1.9 billion grid-hardening plan advanced by Entergy Louisiana amid concerns the proposal was brought up too hastily and that ratepayers will face burdensome electricity rate hikes.
Not all the commissioners were happy about the April 19 vote, which the utility said would benefit ratepayers by making the electrical grid better able to withstand severe storms and reduce the duration of outages and evacuations.
“I am disappointed by (last week’s) outcome,” Commissioner Davante Lewis said in a statement provided to the Louisiana Record. “Modifications were being added even as the proposal went up for a vote. Because customers were not allowed proper input, I will ask Entergy Louisiana to provide public updates on these projects quarterly.”
Consumer groups such as Together Louisiana had urged commissioners to oppose the plan, arguing that it lacked proper transparency and that the utility was in a rush to get the plan approved. It was unclear this week if consumer groups would challenge the grid-hardening plan through litigation.
Together Louisiana had asked prior to the vote that the Public Services Commission delay a decision until the public could learn more details about the proposal. The plan offered no meaningful performance standards, and it was presented only four days before the panel voted on it, according to Together Louisiana.
“Entergy LLC seeks $1.9 billion in ratepayer bill increases over five years for ‘grid-hardening projects,’ substantial details of which are obscured by contractor confidentiality agreements,” Lewis said. “In contrast to past maintenance spending, the upgrades would be classified as capital improvement, a change in classification that Entergy’s shareholders stand to benefit from by approximately $90 million.”
But Entergy Louisiana emphasized that the resilience plan would consist of 2,100 projects designed to strengthen the utility’s transmission and distribution systems in the state. The benefit-cost ratio of the plan is nearly 9:1, assuring ratepayers that they would get substantial bang for the buck, the company said.
“Our resilience plan is a proactive approach that will help bring more of our electric infrastructure up to higher standards, keep pace with Mother Nature and protect what matters most – customers, homes and businesses within the communities we serve,” Phillip May, Entergy Louisiana’s president and CEO, said in a prepared statement. “Although we have been building resilience into our power grid for years, we must accelerate those efforts now in light of the reality that storms are becoming more frequent and severe.”
A key component of the plan is replacing existing utility poles with new ones that are better designed to withstand strong winds and extreme storms such as hurricanes, according to the utility. A residential ratepayer using about 1,000 kilowatts per month would see bill increases of about 57 cents initially, but that amount would grow to about $7 per month at the end of the five-year plan, Entergy Louisiana reported.
The increase would then be expected to decrease over time, the company said, and if the new equipment failed to provide the expected benefits, credits would be provided to ratepayers.
The utility, in the meantime, would “aggressively” apply for federal grants to potentially reduce the overall cost of the utility infrastructure upgrade, according to Entergy Louisiana. It also promised to provide quarterly construction reports and monitoring so stakeholders can evaluate the progress of the plan.