The president of the New Orleans City Council wants residents to know: The council is fighting to keep their electricity bills down.
Councilman Jason Williams’ office outlined the 2015 and 2016 achievements of the council’s Utility Committee this week, a month after the committee directed Entergy New Orleans to plan for its exit from a costly, decades-old agreement that once included all regional Entergy companies but no longer does.
The impending demise of the agreement was listed among the council’s achievements, cited as a way to protect customers from future rate hikes.
Also included were a comparison of Entergy’s electricity rates and carbon emissions to national averages; improvements to the company’s energy-efficiency program, Energy Smart; and the pending deactivation of Entergy’s outdated Michoud power plant in New Orleans East.
The council’s announcement preceded a Tuesday energy symposium put on by the council’s Utilities Regulatory Office, an event at which industry experts advised council members on regulatory best practices.
The council sets rates and otherwise regulates Entergy New Orleans, the Orleans Parish utility company. It’s a unique arrangement. New Orleans is the only city in the United States that regulates a private energy utility when there also is a state-level regulatory agency in place.
In Louisiana, that agency is the Public Service Commission, which regulates rates for utilities providing electricity, water, natural gas and telecommunications services in most other parts of the state.
To fill its role, the council relies on its own regulatory office and a team of outside consultants, some of whom have managed the council’s energy affairs for decades. That expertise comes at a combined cost of roughly $6.2 million in 2016, an $800,000 cut from last year’s figure. The consultants’ bills are passed on to Entergy, which pays them with the money it collects from customers.
Highlighted among recent achievements Tuesday was the council consultants’ role in negotiating Entergy New Orleans’ September exit from the more than 50-year-old Entergy system agreement, which allowed six Entergy operating companies across four states to share in electricity generation, transmission and related costs.
While that cost-sharing initially was beneficial to the city — helping to keep New Orleans’ power costs among the lowest in the nation — other, larger Entergy operating companies began withdrawing from the pact in recent years as their costs began to climb, leaving Entergy New Orleans and the others that remained to bear the full brunt of the system’s electricity generation costs.
As an initial remedy, Entergy’s parent company sought to have all Entergy operating companies in Louisiana participate in cost-sharing. However, the council’s energy advisers said that option would force New Orleans customers to foot the bill for costly projects elsewhere in the state and that it would not make up for the loss in purchasing power and cost sharing the local Entergy firm sustained after the larger companies left.
After much back-and-forth, Entergy New Orleans and the other remaining pact members eventually received the green light to get out of the original pact, which city officials said is “a huge win” for local ratepayers.
“Just as it took tough litigation and negotiation to achieve the value under the system agreement settlement, we have numerous (other) major cases ... that will require vigilance to protect New Orleans ratepayers,” Williams said. “While these cases are not as visible in terms of immediate impact, they involve extremely large amounts of dollars and have long-term ramifications.”
Customer savings can be seen in average city electricity bills, which were $109 per month in 2014, officials said. That equals about 10 cents per kilowatt hour of electricity, while the U.S. monthly average is 12.52 cents per kilowatt hour.
Entergy’s carbon emissions also are 50 percent below the national average, at 0.31 short tons per megawatt hour, officials said.
Also touted was the recent power block purchase at the Union Power Station in Arkansas, which will generate 500 megawatts of power for New Orleans and help replace some of the generation capacity to be lost after the Michoud plant closes this summer.
For Entergy New Orleans customers, rates will rise by $5.51 per month for a customer using 1,000 kilowatt hours a month, then settle back at $2.60 extra per month by 2019 as fuel savings factor in.
Over time, however, buying power from the Arkansas plant and its overall energy efficiency are expected to save ratepayers more than $175 million, officials said.
The council also pushed Entergy to ramp up savings goals last year for Entergy Smart, a program through which Orleans Parish electricity customers agree to make their homes or businesses more energy-efficient, seeing reduced bills as a result.
In addition, Entergy has established a $75 million fund to protect ratepayers from price spikes after severe storms and allow for speedy power restoration, officials said.
Follow Jessica Williams on Twitter, @jwilliamsNOLA.