(C) Verite News New Orleans This story was originally published by Verite News New Orleans and is unaltered. . . . . . . . . . . Entergy may have to wait on bill hikes for storm-hardening work, under council plan [1] ['Katie Jane Fernelius', 'More Katie Jane Fernelius', 'Verite News'] Date: 2024-01-29 Entergy New Orleans’ ambitious $1 billion grid-hardening plan, and ratepayer bill increases that would pay for it, may have to wait, under a proposal now before the New Orleans City Council. For months, the New Orleans utility has been pushing the council, which acts as the company’s regulator, to approve the plan, called “Operation Gridiron.” The company is proposing what it calls “the most comprehensive energy grid upgrade plan in the city’s history.” The plan was developed at the council’s behest after Hurricane Ida in 2021 caused catastrophic damage to the city’s grid — knocking out critical transmission lines that bring power into the city and power infrastructure within the city limits — leaving most New Orleans residents without power for more than a week in stifling late summer heat. Remedying the problems that led to those failures, the utility contends, will take 10 years and cost more than $1 billion over two phases. Much of that would be funded by city ratepayers. Under the company’s plan, ratepayers using an average amount of electricity could expect to see modest bill increases of about 20 cents per month beginning this year and up to nearly $12 per month by 2028. But the council, citing already inflated utility cost increases over the past several years, has balked at giving the company everything all at once. And in a resolution that will go before the Climate Change and Sustainability meeting on Tuesday (Jan. 30), the city would deny the majority of the plan, as well as most of the rate increase, known as a “resiliency rider,” at least for the time being. Under the council’s plan, Entergy New Orleans may still ultimately get approval for much of Operation Gridiron. But the utility will need to develop a revised list of projects to be completed from 2025 to 2028 and meet guidelines that the council plans to develop beginning next month. These guidelines will likely be tied to existing reliability standards and increase over time. “Already the people of New Orleans are dealing with tremendous cost of living expenses, from housing to insurance, and while we know that it is critical to strengthen the grid against outages, these major investments shouldn’t be solely paid for by Entergy New Orleans customers,” Councilmember Helena Moreno, who chairs the Climate Change and Sustainability Committee, said in a press release in advance of the meeting. The council is planning on giving Entergy the immediate go-ahead on a subset of proposed storm-hardening projects — those for which it has secured federal funding, reducing the cost increase to ratepayers. “Tomorrow’s committee hearing is a significant step forward,” said Entergy New Orleans spokesperson Beau Tidwell, noting that the projects are among many that Entergy proposed for grid resiliency. “We are excited to work with the Council on approval for the over 660 other projects in our plan to harden distribution for the whole city.” Tidwell also noted that Entergy New Orleans is pursuing other financial offsets for its resiliency plan, including federal and state funding for microgrid development, as well as distribution improvements and hardening. ‘A significant step forward’ The council proposal is the latest development in the back-and-forth between City Council and Entergy New Orleans on how best to finance needed repairs to the city’s electric grid. Last year, Entergy announced Operation Gridiron, a $1 billion plan that would invest in “grid-hardening” efforts, such as upgrading poles to withstand winds of up to 150 miles per hour, putting more wires underground and improving transmission into the city. The plan came as a response to a City Council resolution asking for the city-regulated utility to make the grid more resilient after the ten-day post-Ida outage, during which 21 people died from causes due to lack of power. Reporting at the time showed that the utility had neglected to fund grid resiliency efforts that could’ve prevented the outage to over 1 million customers across the state. Entergy has been looking for approval for its first phase of Operation Gridiron at the cost of about $559 million. However, in order to cover the costs of Phase 1, the utility said it would need to increase customers’ bills from “20 cents more per month in 2024 to $11.86 per month in 2028.” This is in addition to the utility’s other proposed fees, which it says are needed to repair the grid from storm damage and replenish the storm reserve fund. Though there is near-universal agreement that the city’s grid needs to be improved, especially in the wake of intensifying weather threats due to climate change, there’s been little appetite to approve the utility’s ambitious plan due to the overall price tag and concerns that the financial burden will be primarily born by customers. Last year, a Verite News investigation found that Entergy New Orleans customers have seen their bills increase 60% between 2019 and 2022. Additionally, Verite found that as bills have climbed, so have dividend payments to Entergy shareholders. As of November, the utility’s parent company has paid out over $3.2 billion in shareholder dividends since 2020. Though the proposal could deny Entergy its requested rate hike, it still offers support for three major projects that will harden the city’s electric grid in an effort to prevent future outages and rely on cleaner energy sources. These include upgrading transmission into the city, improving local distribution in New Orleans East and funding a backup battery storage system for the grid. Funding for the efforts will be supported, in part, by federal money, which will cover 50% of the costs. This federal funding was previously announced in October 2023 after Entergy New Orleans was selected to receive matching funds as part of the Department of Energy’s Grid Resilience and Innovation Partnerships program. Related Stories Republish This Story Republish our articles for free, online or in print, under a Creative Commons license. 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