PSC on 01312018 (copy)

The Louisiana Public Service Commission members are, from left to right are: Lambert C. Boissiere III, D-New Orleans, Foster Campbell, D-Bossier Parish, Eric Skrmetta, R-Metairie, Mike Francis, R-Crowley, and Craig Greene, R-Baton Rouge.

Because electricity customers – even those who sat in the cold during the February storm – are having to pay about $10 more per month, Louisiana regulators ordered an investigation into the decisions made by utility company officials.

Though the surcharge is already showing up on April bills, if the probe concludes that utility company officials should have been better prepared and were not, customers would be refunded.

“We should have transparency around the winter storm about what costs are being passed down to consumers,” said Louisiana Public Service Commission Chair Craig Greene, R-Baton Rouge.

After the meeting, Greene said in a press release that the audit would help provide answers for residents who experienced long outages and high costs.

“From the moment the freeze first caused service interruptions and fuel issues, my stance has been the same: we cannot expect Louisiana residents and businesses to foot the bill without providing them clear, accurate answers as to what went wrong,” Greene said. “We owe that to residents who faced long outages and now are being charged for the costs incurred during the storm.”

“Commissioner Campbell highlighted today the fact that Louisianans are uniquely impacted by even the slightest increase in their monthly bills. Louisiana residents and businesses rely on the Commission to look at all ways to keep their utility bills affordable and this directive aligns with that public responsibility,” Greene added.

PSC Commissioner Foster Campbell, D-Bossier Parish, said: “I’m not preaching, these are just facts. We’re number two in poverty and we have to help these people.”

Because utilities operate as monopolies in their service areas, the state Constitution gives the five-elected members of the PSC the ability to review business decisions made by the private owners of the company and discount customer bills for costs that aren’t prudent.

Most of Texas allows consumers to choose which utility they wish to power their homes and businesses. The utility grid in that state came within moments of collapsing so completely that most residents would have been without power for months. State PSC Commissioner Lambert C. Boissiere III, D-New Orleans, asked for a study of what happened in Texas.

The extreme cold – in buildings not really prepared for it – led to consumers cranking up their heaters, requiring utilities to run their generators full out to make enough electricity. At issue is the cost of fuel to run those generators at levels much higher than planned by the utility companies. Fuel costs are passed through to customers.

Entergy, for instance, reported burning about twice as much fuel to make additional electricity between Friday, Feb. 12, and the following Friday, when temperatures go back up, than was used in all of January.

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“This extraordinary increase in gas consumption happened on days when the market price of gas was many multiples of what it was trading at before the onset of the extreme weather event,” wrote Mark Kleehammer to the PSC on March 23. He is in charge of Entergy’s dealings with regulators.

In all of January, Entergy spent $106.3 million on fuel. In February, Entergy spent $272.4 million, much of it buying natural gas to make electricity during winter storm time period.

For an Entergy Louisiana residential customer using 1,000 kilowatt hours per month, the extra $166 million equates to approximately $45 extra for fuel. The PSC calculates that the typical Louisiana residential customer uses about 1,400 kWh of electricity each month, which means about $63 more. Larger homes using 2,000 kWh, bills went up about $90.

Though legally the utilities could have collected the fuel costs on April’s bill, commissioners got them to agree to spread out the payments.

But that includes those customers who spent some or most of that week without power.

The state’s largest utility, Entergy, sells electricity to about half of Louisiana’s roughly 2.1 million customers – mostly in Baton Rouge and New Orleans areas but also in Acadiana, on the Northshore and throughout much of north Louisiana.

At its height, the winter storm knocked out electricity for 137,000 Louisiana customers, according to the PSC. The day before, about 206,000 were knocked off because of the storm but 86,000 of those outages were ordered by the regional transmission authority in order to keep Louisiana’s grid viable. Under state law, those customers will have to pay, regardless of how long they were in the dark.

Entergy estimates that over the next five months, residential customers – those using 1,000 kWh – will pay about $8.97 more per month. For the typical Entergy residential customer, the increase is closer $14 for each of the next five months.

April’s monthly bill for Entergy’s residential customers using 1,000 kWh was $115.54 – up $10 from last month’s $105.44 and almost $21 higher than April’s $94.56 bill in 2020.

Email Mark Ballard at