Entergy Corp. floats idea of selling Entergy New Orleans; councilmembers react

City Council expected to have tough questions for the utility at Wednesday meeting
Published: Sep. 21, 2021 at 7:18 PM CDT
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NEW ORLEANS (WVUE) -Amid criticism from some customers and a promised investigation by the city council into Entergy New Orleans days of power outages after Hurricane Ida, the local utility’s parent company, Entergy Corporation has put the possibility of a sale of Entergy New Orleans or a merger on the table on the eve of a city council meeting to discuss the outages.

In a press release, Entergy Corporation said it is preparing to respond to the New Orleans City Council with four preliminary options for the future operation and ownership of Entergy New Orleans, LLC and it said the options are in response to Council President Helena Moreno’s September 14 announcement that she intends to propose a resolution to study the future ownership of the utility in New Orleans. The options the corporation laid out are: A merger with Entergy Louisiana, a sale of Entergy New Orleans, a spinoff to establish a standalone company without Entergy Corporation’s ownership, and a city of New Orleans run electric and gas utility.

Moreno responded to Entergy’s press release.

“I certainly wasn’t surprised by the way that the news release kind of leans into the probably the best option would be its regulated, that Entergy New Orleans is merged to Entergy Louisiana and then regulated by the PSC. The reason that I wasn’t surprised by this is that I’ve already heard from different business organizations and members of those organizations that Entergy execs have been making their rounds, kind of pitching that they would like to have different regulators other than the New Orleans City Council and I’ll say this I guess I don’t blame them because we have been really tough on them and holding them accountable when they don’t do right,” said Moreno.

She was asked whether she favored a sale of Entergy New Orleans.

“What I would favor is ensuring having a system that is reliable and fair to the ratepayers of this city. Whatever will accomplish that is at the end of the day what I favor,” said Moreno.

Councilman Jay Banks said he was caught off guard by the talk of a possible sale of the utility the city relies on.

“Obviously, there’s concern. The utility is essential to the safety and quality of life of all of our citizens. We don’t have a choice but to have a utility and the fact that they’re having these conversations at this point is of grave concern,” said Banks.

Both Banks and Moreno agree that municipalizing Entergy New Orleans would not happen overnight and would be a big step.

“One of the things that is very interesting when you sit in these council seats you hear people talk about, we need another utility, bring in another company, you know get somebody. It is not just that simple, that is a major, major, major capital investment that somebody would have to make in order to come in here to do that,” said Banks.

“The reason for the study is because we’ve had so many people come to us and say like what about competition what about have a non-profit come in and run it, what about whether it’s you know run by, it’s a public utility, run by the city? It’s so many different options, more options than what’s even listed in the Entergy news release; why not look at these options and see what’s workable and what’s not,” Moreno said.

Jonathan Rhodes, Director of the Office of Utilities issued the following statement after FOX 8 asked the mayor’s office for comment on the developments:

“Our power infrastructure should be studied, both in response to Hurricane Ida and as it relates to the long-term future of our City. As the regulator of Entergy New Orleans, the City Council is well within its authority to conduct studies and evaluation. The Mayor’s Office of Utilities is eager to review the results of those studies as we continue work to improve infrastructure for the people of New Orleans, and for the future of our city.

“As a Category 4 storm, Hurricane Ida was the strongest to make landfall in New Orleans in modern history. With storms becoming more frequent and severe, the future of New Orleans is tied to the future of our infrastructure. That is why the Office of Utilities was created as one of the Mayor’s first Executive Orders, so that the City would have additional resources for utility policy and planning.

“During Hurricane Ida, we saw how investment in our levee and drainage infrastructure worked, and protected the city from flooding. However, with the entire city losing power, we also saw that our electric grid is in serious need of investment.

“Hurricane Ida has shown us once again that infrastructure is essential to our ability to weather storms. The Mayor’s Office of Utilities is committed to working proactively to build infrastructure that is reliable, resilient, sustainable and affordable for our residents and businesses.

“In fact, the Mayor’s Climate Action Plan calls on the City to meet Net Zero Emissions by 2050, and to achieve 50% by 2035. To achieve these goals, we have launched a series of proactive programs. For example, the City launched the Solar for All NOLA campaign with our local solar industry to encourage rooftop solar. In 2020 we had 450 new homes sign up, each seeing a savings of over $500 a year, promoting clean energy and reducing the energy burden on these homes. Our Office of Utilities is currently designing a network of 50 EV charging stations to encourage electric vehicles all across the city, conducting feasibility studies to turn our vacant land into large-scale solar installations, and working to establish a series of microgrids, using renewable energy, that will serve as resilient community hubs in case of power outages.”

Earlier in the day Moreno tweeted that the utility sent her its talking points on the issue by mistake.

“I was preparing to respond to the news release when my chief of staff walked in and he had a copy of what said news release draft and I said, well, I’ve already read, he said, oh no, keep flipping, so that’s when the rest of the pages were in there, as to kind of the plan leading up to our council meeting, kind of the strategy around it, all of the scripted answers to questions they could possibly get from the media.”

Moreno said she has plenty of questions of her own for Entergy officials who are expected to be at the Wednesday city council Utilities Committee meeting.

“At the end of the day, tomorrow I’m just going to focus again on the big issues, you know, what can, what can be done to really fair and reliable services for the people of this city and really we have to consider this region as well because the transmission failures that happened those are Entergy Louisiana transmission lines,” she said.

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