In A Flash

Louisiana Bond commission approves Entergy plan to borrow for storm repairs; customers will pay it back

By: - January 20, 2022 2:19 pm
Entergy customers could see $11 per month spike for 15 years due to Louisiana storms

(Photo by Wes Muller/Louisiana Illuminator).

The State Bond Commission signed off Thursday on a plan to let Entergy Louisiana cover its storm recovery costs through a $3.2 billion bond sale that its customers would pay back over the next two decades. 

The commission’s approval is contingent on Louisiana’s Public Service Commission also supporting Entergy’s proposal. The commission, which regulates most utility companies in the state, is expected to vote on the matter in February, according to bond commission staff.

Entergy customers should expect to pay an average monthly surcharge of $9.56 for approximately 20 years if the bond sale proposal is approved, said Jody Montelaro, vice president of public affairs for Entergy Louisiana. 

The surcharge would not apply to the customers of Entergy New Orleans, which the Public Service Commission does not regulate. Montelaro said New Orleans customers will eventually see additional charges, though it’s not clear what form they will take. 

Entergy says it needs the money to pay for damage sustained during hurricanes Laura, Delta and Zeta in 2020 and a 2021 winter storm. It will also go to increasing storm reserve funds that were drawn down after Hurricane Ida in August.

Entergy Louisiana  said the cost to its customers would be even higher if the company wasn’t pursuing a bond sale. If it had to make up for its weather-related expenses through a traditional rate increase, Entergy said it could cost customers an extra $13.40 per month. 

Gov. John Bel Edwards asked the federal government to permit  the state to use federal funding to pay down storm-related debt for Entergy and other utilities. If that occurred, customers might not have to bear as much of the storm damage costs.

The federal government has not traditionally allowed its recovery money to be used to pay off financial obligations of private companies like Entergy. 

Louisiana Senate President Page Cortez, who sits on the bond commission, said he wanted to make sure the Public Service Commission is ultimately “responsible” for approving Entergy’s proposal.

“It’s a large amount (of money),” Cortez said. 

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Julie O'Donoghue
Julie O'Donoghue

Julie O’Donoghue is a senior reporter for the Louisiana Illuminator and producer of the Louisiana Illuminator podcast. She’s received awards from the Virginia Press Association and Louisiana-Mississippi Associated Press. Julie covered state government and politics for | The Times-Picayune for six years. She’s also covered government and politics in Missouri, Virginia and Washington D.C. Julie is a proud D.C. native and Washington Capitals hockey fan. She and her partner, Jed, live in Baton Rouge. She has two stepchildren, Quinn and Steven.