Residents, businesses and municipal offices in New Roads began receiving power from NRG Energy Inc. on Wednesday in a move the city’s mayor says should trim rates and provide greater predictability in electricity prices.
About 2,500 rate-paying customers in New Roads will be affected by the change.
Mayor Robert Myer said the agreement, struck back in November and unanimously approved by the City Council, provides the city and residents guaranteed rates over five years, which in turn will give the city enough stability in the budget to finance new power lines and other power infrastructure in growing areas of the community.
“We’ve had significant growth in the city over the last several years,” Myer said. “This will allow for the expansion of our electric grid and allows us more capacity.”
Under the city’s arrangement with its previous power provider, Myer said, both residents and the city paid electricity rates that fluctuated monthly.
“Based on our current rate structure, our residents should see a slight reduction in rates,” Myer said. “More importantly, the New Roads electric user will see stabilized pricing for the next five years.”
The new power provider, NRG, is one of the nation’s largest independent producers and a publicly traded company based in Houston and New Jersey. The company already operates a local office in New Roads and runs the Big Cajun I and Big Cajun II coal- and gas-fired power plants in surrounding Pointe Coupee Parish.
Jennifer Vosburg, a senior vice president at NRG, said in a news release the utility company already serves about 300,000 customers in Louisiana and operates 140 generating plants nationally.
“NRG is committed to supporting the growth of the city of New Roads through providing competitive power rates and ongoing support of economic development initiatives,” Vosburg said.
The town for years had bought its electricity from the Louisiana Energy and Power Authority, a Lafayette-based agency that serves a number of municipalities in the state.
Officials with LEPA did not return a message seeking comment Wednesday.
New Roads took over the operation of a municipal power plant last June after LEPA announced it wasn’t renewing a lease on the facility, along with two other plants in Plaquemine and Morgan City, ahead of the opening of a new 64-megawatt natural-gas-powered electric plant in Morgan City.
Myer said New Roads will continue to maintain its power plant, which employs five municipal workers, as a backup source of power during extended outages or in case natural disasters knock out other portions of the power grid.
Growth over the past three years in New Roads, including the opening of several new businesses and planned housing developments, mean significant upgrades to the city’s power grid are needed, Myer said.
The city will continue to be responsible for the costs of building new power lines and expanding the grid, Myer said, but the new arrangement provides predictability to budget for costs associated with those upgrades.
“If we did not expand our electrical grid, we wouldn’t have been able to service the growing number of residents we have,” Myer said.
Follow Bryn Stole on Twitter, @BrynStole.