Monday, May 27, 2024

Campbell says LPSC may have option to save utility customers on storm charges

by BIZ Magazine

Facing another billion-dollar Entergy bill for the cost of hurricane recovery, the Louisiana Public Service Commission may use a new theory suggesting that company shareholders split the cost with customers.

“Since Hurricanes Katrina and Rita in 2005, Entergy customers have borne 100 percent of the cost of storm recovery — $20 billion,” said LPSC member Foster Campbell.

“Now we have learned we may have the option to make the company and its shareholders share that burden.”

Last week the commission delayed ruling on Entergy’s request to pass on to ratepayers another $1.6 billion in costs associated with recovery from five named storms in 2020 and 2021. That delay came after testimony by New Orleans lawyer Pat Patrick, hired by the LPSC at Campbell’s request to research its legal obligations on storm recovery.

Patrick told the commissioners that legal limits placed on the LPSC suggesting utilities are entitled to 100-percent recovery of storm costs are “not absolute.”

He said: “The statutes do not require pass-through of 100 percent” of storm costs to customers.

Campbell said two prominent regulatory lawyers previously told him “there’s no way” the commission can demand utility shareholders share storm costs.

“This commission voted in February to charge Entergy customers $3.2 billion in storm costs (the first part of Entergy’s recovery case for the five named storms; Campbell voted ‘no’). We were told, ‘There’s nothing you can do about it.’

“Now you’re saying we can do something different.”

Campbell added: “We should try our best to see how much of these costs should be shared by the company. They are asking for $1.6 billion more today. Now we know there is no such thing as ‘can’t do it.’

“This company is making billions of dollars in profits and paying big dividends to shareholders.”

The first part of Entergy’s case for recovery from 2020 and 2021 storms cost ratepayers $3.2 billion. That February decision by the LPSC imposed an average storm surcharge to customers of $10 per month for 15 years.

Campbell said the second part of the bill, $1.6 billion, would result in an average surcharge for Entergy customers of another $6 per month for 15 years.

In voting against that charge in February, Campbell asked LPSC staff to determine if anything in the law forces the commission to impose all storm costs on customers. He also asked if North Louisiana Entergy ratepayers should pay even if their storm damages were slight to nonexistent, an issue that remains outstanding.

Campbell said the commission has an obligation to test Patrick’s opinion.

“It is imperative for the LPSC to see if this is some crazy idea that won’t work, or if it’s not so crazy. Entergy can either compromise and pay some of the cost, or they can go to court.”

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