Entergy wants to spend $1 billion on New Orleans power grid. Here's their pitch. - NOLA.com
Entergy seeks New Orleans support for major grid upgrade | News | nola.com
Facing skeptical New Orleans City Council leaders and customers who have already been squeezed by inflation, soaring insurance prices and high utility bills, Entergy is embarking on a public campaign to build support for a $1 billion plan to harden the city’s electric grid.
The utility is hosting a series of public meetings about the plan, and is putting up signs across the city indicating “ future project sites,” Entergy New Orleans CEO Deanna Rodriguez said at a news conference Tuesday.
Entergy New Orleans and Entergy Louisiana, which covers much of the rest of the state, sketched out plans earlier this year to bolster the grid after Hurricane Ida exposed the state’s electric infrastructure as vulnerable and outdated.
Federal data show Louisiana’s grid is among the least reliable in the nation, even when excluding major storms.
Entergy leaders say they modeled the plans — a $10 billion plan by Entergy Louisiana and a $1 billion plan by Entergy New Orleans — after Florida, which spent two decades building a stronger grid following major hurricanes in the mid-2000s. They also cite climate change as a key factor, arguing they need to build stronger poles, bury some electric lines and bolster transmission as hurricanes become more severe.
“They’ve asked us to submit it,” Rodriguez said of the City Council. “Infrastructure investments have been done in Florida and we want to follow in their footsteps and make sure we have a more resilient grid. The only way to do it is in partnership with the City Council.”
'More creativity'
The resulting proposals would also bring higher bills to customers in Louisiana. That prospect has worried consumer advocates and regulators.
City Council member Helena Moreno said Tuesday that the resiliency plan can’t be funded solely by ratepayers, and that Entergy New Orleans needs to evaluate things like selling assets paid for by customers and using the proceeds to cover the costs of some projects.
A utility pole rests on a 2020 Toyota Camry smashing the back window after a possible tornado touched down on Cohn Street between Pine and Lowerline streets in New Orleans Wednesday, May 12, 2021. (Staff photo by David Grunfeld, NOLA.com| The Times-Picayune | The New Orleans Advocate)
“I also want to make clear that I need Entergy New Orleans to demonstrate that upgrades need to be about prioritizing our grid and the safety of our people, not about the company gaining massive new profits,” she said. “We need more creativity and community focused solutions, not just passing on the massive costs on to ratepayers.”
The utility is also seeking federal funds from the bipartisan infrastructure bill that could offset the costs. Moreno suggested the utility should apply for low-cost federal loans, after the California utility PG&E recently sought $7 billion to help reduce the risks created by wildfires.
Long-run savings
Rodriguez said the company’s pitch to customers is that they will save money in the long run if the plan is approved. The company’s leaders have argued it will cost less over time if the company can avoid costly replacement projects after storms, and that customers may not have to spend money evacuating.
If approved, New Orleans customers would see higher bills. The utility has said bills would gradually rise from an additional 20 cents in surcharges per month in 2024 to $11.86 per month in 2028.
Entergy New Orleans officials will meet with residents at Dillard University Tuesday night, followed by meetings in Algiers on Wednesday, New Orleans East on Oct. 23 and the Lower 9th Ward on Nov. 2.
Entergy has had a rocky relationship with the City Council in recent years. The council has spent several years seeking to fine the utility $1 million for reliability problems.
The council and other regulators are also locked in a yearslong battle with Entergy and its various affiliates over alleged mismanagement at its massive Grand Gulf nuclear plant in Mississippi, which provides power to New Orleans.
Separately, Entergy Louisiana is seeking approval of its $10 billion plan from the Louisiana Public Service Commission.
The commission regulates most Louisiana utilities outside of New Orleans.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.