Entergy’s New Orleans subsidiary plans to ask the New Orleans City Council for permission to borrow $150 million to replenish its storm reserves and repay it through a monthly charge on customers bills. The utility company said in a statement Wednesday that Hurricane Ida depleted its disaster recovery account, and it intends to pay off the securitized bonds over “approximately 15 years” through the ratepayer surcharge.
The typical New Orleans residential customer that uses 1,000 kilowatt-hours of electricity can expect to see an estimated increase of $3.94 per month, according to Entergy New Orleans. After 10 months, the estimated charge will decrease to a range of $2.75 to $3.00. If the council approves the proposal, the increase would go into effect during the next billing cycle.
“Before the upcoming hurricane season, Entergy New Orleans must be prepared for possible extreme weather events, and a storm reserve provides an additional tool to aid in effective storm restorations,” the company said in its statement.
Entergy New Orleans said its use of securitized bonds, as opposed to a traditional loan, will save customers about $50 million in interest payments over the debt repayment period. The utility company typically seeks out bond approval from regulators, in this case the City Council, rather than borrowing money at market rates.
Last month, the Entergy Louisiana subsidiary received approval to recoup $3.2 billion from customers over 15 years to cover its costs from three hurricanes and a winter storm. The Public Service Commission signed off on the storm tariff amid criticism that parent company Entergy Corp. paid its shareholders $1.5 billion in dividends, and its chief executive received a $4 million pay raise during that same period.
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