Join us at the LPSC’s November meeting

Following Winter Storm Uri in 2021, SWEPCO sought the Commission’s approval for recovery of $150M in fuel costs over a 5 year period. The purpose of this audit was to determine if those costs were eligible to be recovered, whether the costs were necessary, and to review the actions and decisions of SWEPCO leading up to and during the Winter Storm.

Yes, we’re still talking about a storm from 2021. 

LPSC Staff determined the fuel and purchased power costs incurred by SWEPCO during the Winter Storm were appropriate and eligible for recovery from customers, the costs were necessary, and the actions of SWEPCO were reasonable. These costs have already shown up on your bills.

Additionally, Staff suggested in the future SWEPCO should investigate whether “insurance” in the form of additional fixed price purchases or use of natural gas storage would be useful during the winter months to damper price surges.

Utilities are allowed to pass storm damage costs onto customers if the LPSC determines those costs were sensible and prudent. Entergy and LPSC Staff have agreed upon a $173.3M cost recovery settlement related to Hurricane Francine. Entergy originally requested recovery totalling $182M. The settlement allows for the recovery of $15M a year from customers. Customers who use 1500 kilowatt-hours of electricity will see a bill increase of roughly $1.

Instead of paying for the costs out of their storm escrow fund, Entergy argued they need to keep the fund beefed up in case of another storm. As a result of this settlement, customers will now have a new line item on their bill for Hurricane Francine cost recovery. Including Hurricane Francine, Entergy Louisiana customers are now paying for seven storms, including Hurricane Isaac, Laura, Delta and Zeta, as well as Winter Storm Uri and Hurricane Ida.

Cleco filed an application to the Commission in December 2024 for approval of a roughly $200M 5-year Resilience Plan for grid hardening projects to strengthen their transmission and distribution system. LPSC Staff and Cleco reached a settlement in this proceeding that allows Cleco to pass those costs onto customers.

Ultimately, it’s good when utilities make investments in strengthening our electricity system. The catch is they actually have to make the right investments, and show evidence that those investments improve reliability for customers. If they cannot, utilities must be held accountable by regulators and return money to customers. 

One concern The Alliance has is that CLECO is seeking to “capitalize certain conductor handling expenses that would otherwise be treated as expenses”. That means Cleco is asking to earn a profit on something they don’t typically get to make a profit on. From The Alliance’s perspective, this rewards the bad practice of allowing Cleco to make a return on regular maintenance and operations costs, which are simply inherent costs of doing business. 

Cleco customers will see a new Grid Resilience Rider added to their bill.

The Commission will consider a directive from Commissioner Skrmetta regarding nuclear power that directs all investor owned utilities within 90 days to evaluate prudent locations for the siting of future nuclear power plants. This directive will allow utility spending on nuclear development. 

The Alliance is opposed to the development of new nuclear facilities because nuclear power is extraordinarily expensive, and is an excessively burdensome investment for customers in a state already facing a severe affordability crisis. There are other sources of generation we can develop that are more reasonably priced and have less detrimental environmental impacts.