Bonds to raise money to repay Entergy Corp. for getting the lights back on after Hurricane Isaac were sold earlier this week, state regulators announced Thursday.
The slow-moving hurricane with sustained winds of about 67 mph dumped rain and caused flooding throughout south Louisiana in August 2012. About 787,000 of Entergy’s customers in Louisiana, mostly in the New Orleans area, reported outages.
The Louisiana Public Service Commission reported selling about $315 million in bonds that will be repaid through a surcharge on the monthly bills of Entergy’s roughly 1 million customers across the state.
Because Entergy operates as a monopoly in its service area, the PSC can set rates and oversee decisions made by the privately owned business. But the costs of raising broken poles, fixing severed power lines and repairing damaged substations caused by the storm must be paid by the utility’s customers.
The five elected commissioners argue that paying off Entergy with the proceeds of a bond, rather than paying the utility over time, saves customers money.
PSC Commissioner Clyde Holloway, of Forest Hill, said in a prepared statement that this financing transaction will save about $150 million.
“Issuing these bonds is smart financial management,” said PSC Chairman Eric Skrmetta, of Metairie.