By basically admitting that it’s just not feasible to rewind the clock and restart the debate over whether Entergy New Orleans should be able to build a new power plant, the New Orleans City Council has made it official. The crowd-pleasing part of the showdown is over.
Now comes the less sexy but more important part: Overseeing what comes next.
The utility’s astroturfing scandal, in which it hired a company that hired a company that paid people to misrepresent themselves as grassroots supporters, was an affront to the process. It was also a clownish stunt that drew national ridicule and ensured that Entergy would be a prime target of Carnival season satire.
After pondering for months whether to put the kibosh on Entergy's plans for a $210 million power plant in New Orleans East, the New Orleans Ci…
And in a way, it was a gift to a newly elected council made up largely of members who hadn’t been part of the original debate. These members, led by Utility, Cable, Telecommunications and Technology Committee chair Helena Moreno, got to come to the defense of the people against a company that had done something indisputably wrong. Only two of them, Jason Williams and Jared Brossett, served on the previous council, so only they had to awkwardly defend having voted “yes” in the first place.
The crackdown was productive as well as popular. A council investigation revealed records showing that the Entergy officials who denied knowing that protesters were being given cash payments had been anything but curious about their contractors’ tactics. Council members saw an opportunity to gain leverage concerning other needs such as power generation for the troubled Sewerage & Water Board and improving the utility’s distribution system. They got the company to commit to seek out new technologies that could make the plant more efficient or reduce emissions.
And the $5 million penalty the council imposed — which must come out of company profits, not ratepayer pass-throughs — should help pay for some of the city’s desperate infrastructure needs. Indeed, S&WB executive director Ghassan Korban showed up at last week’s committee meeting with a wish list.
Perhaps banking too much on the City Council's goodwill, Entergy New Orleans pushed its luck Thursday, and lost out.
But looming all this time has been the question of whether the council should reconsider its original approval of the plant. Still in people-pleasing mode, members made moves to do just that.
Last week, they bowed to the reality of the situation and all but acknowledged that plant construction would go forward.
A big part of the problem is that it’s going forward as we speak. The plant’s total price tag is $210 million, and Entergy has spent $96 million on equipment and contractors since it was originally approved nearly a year ago. Delays would increase costs that would be passed on, officials warned.
"These costs, which have been verified through invoices, represent an incredibly high 'exit' fee for scrapping (the new plant)" and would mean "ratepayers would have nothing to show for it except potentially a big bill," Moreno said.
The state Department of Environmental Quality has also given the project a green light, which makes it harder for environmentalists to challenge the plant’s safety. And council members say a failure to build a plant could result in sanctions if the city doesn’t identify an alternate reliable power source.
All this led to a very public walk-back. Last week, Moreno’s committee pulled an agenda item to reconsider the plant. It substituted a measure to let it go forward in exchange for the $5 million payment. Under intense protesting from (presumably) actual citizens who want the plant scrapped, the committee didn’t vote, instead forwarding the resolution to the full council for consideration at its Thursday meeting. But with all five committee members on board, approval is pretty much assured.
You’d think Entergy wouldn’t push its luck at this point. Nope. Entergy counsel Marcus Brown asked that the council label the $5 million a “payment” rather than a fine, and new CEO David Ellis, who was brought in after Charles Rice resigned due to the fake protesters scandal, didn’t disagree.
Moreno’s entirely appropriation reaction: “You gotta be kidding me here.”
It won’t satisfy the company's most ardent critics, but let’s hope this new council holds on to that skepticism as the plant gets built and comes on line. Entergy has certainly that much.