There are concerns regarding the condition of Entergy Louisiana facilities with evidence that more proactive maintenance work is needed. But what are the incentives for Entergy to perform comprehensive, preventative maintenance and how are they enforced?
What does the Louisiana Public Service Commission require and monitor? There has been an ongoing cycle of diminished maintenance; loss of power due to storms; an army of contractors restoring power; and resulting storm restoration charges.
Entergy and the LPSC place a storm restoration charge item on bills for storm repairs. Unfortunately, storm repairs increasingly take the place of annual maintenance, repairs and planned replacements of aged, degraded facilities.
Entergy’s tight control of maintenance expenses benefits both Entergy and the LPSC as a decrease in earnings due to increased maintenance could result in an adversarial rate case proceeding. When a storm comes, the cycle repeats and restoration charges pay for work after the storm — including work that should have been performed before the storm.
Savings from “low rates” are wiped out by customer expenses due to power loss and cumulative restoration billing charges. The LPSC and Entergy are shielded from the politics of disruptive rate case proceedings and the LPSC is not burdened with monitoring electrical system maintenance. Customers lose in the long run because of longer outages and multi-year restoration bills.
One solution would be to require Entergy to engage in a plan of inspection and rehabilitation covering most segments of Entergy’s distribution and transmission infrastructure. For example, a segment report could cover all poles, conductors and pole hardware on a distribution feeder or geographic area.
As segment reports are completed, the LPSC would evaluate findings, determine justification for improvements and allocate costs. Electrical rates may go up a bit but outages and restoration expenses should go down.
retired consulting engineer