By Jessica Hendricks, AAE State Policy Director
If your electric bill seems higher than it was last year, it is and you are not alone. Bills are up, in some cases even $20 more per month than where they were last year and as we continue to pry ourselves out of this economic recession, many folks just can’t keep up. Just last month, at the LPSC meeting, a Ville Platte resident went before the Louisiana Public Service Commission to make a formal complaint about how high utility bills are in his community. Although unacceptable, here are a few reasons why-
Usually line itemed as FAC (Fuel Adjustment Charge) on bills, this is a 100% pass through from the utility to the customer of costs associated with the fuel needed to generate electricity. As many know, natural gas prices are significantly higher than they were last year, and Louisiana relies heavily on natural gas power plants. The high cost of natural gas is causing a spike in the FAC on customer bills. Further, if you’re a SWEPCO or Cleco customer (or a customer of a utility that buys power from Cleco, like DEMCO and the City of Alexandria), you’re soldering the costs of an expensive lignite mine and power plant. The Oxbow Mine and Dolet Hills Power Station in Northern Louisiana are nowhere near cost effective anymore and the companies are in the process of retiring both facilities. The associated retirement costs have yet to go through a full prudence review by the LPSC meaning customers are on the hook for the expensive fuel costs, albeit subject to potential refunds in the future should the LPSC determine those costs were imprudent.
This is the amount charged per kWh. Louisiana has prided itself for years in having the lowest ‘rates’ in the country, around $0.08-$0.09/kWh. However, recent rate cases and Formula Rate Plan extensions approved by the LPSC have some utilities charging over $0.13/kWh which is above the national average of $0.12/kWh.
You’ve probably heard us say, “we’ve got the lowest rates, but highest bills”. A lot of that came down to usage and the costs associated with sustaining high usage. As mentioned above, we no longer have the lowest rates yet we still have some of the highest usage. Sure, we’ve got long hot summers, but so do our neighboring states. Yet they mitigate energy usage with long-term, robust energy efficiency programs. The LPSC has been working on these programs for over seven years and have yet to finalize them, while Louisianan’s pay the price on their monthly bills.
Riders and Surcharges
This is likely where interim cost recovery from storm damage is going to start to show up. Whether it was Hurricanes Laura, Delta, Zeta, or Winter Storm Uri, some of our utilities have already started recovering them subject to a prudence review. Costs of new power plants may also be lurking here.
Growing up in Lake Charles, Louisiana, my family prepared for each hurricane season by clearing debris and stocking our pantry with water and canned food in late May. In October, we stopped watching the Gulf of Mexico. These days, we prepare a whole month earlier and can’t fully relax until December. What used to be a summer to early fall hurricane season is now half the year, and it’s growing in both length and ferocity.
If we’re going to have any chance of saving our land, Louisiana needs real climate action and a serious investment in renewable energy. The petrochemical, oil and gas industries are threatening to hijack the process by spreading a myth about carbon capture — a myth that’s catching the ear of Gov. John Bel Edwards. But it’s not too late to tell a new story.
To confront this challenge, Edwards created the Climate Initiatives Task Force with the goal of creating a plan to achieve net zero carbon emissions in Louisiana by 2050. This task force includes advocates for climate equity and justice, as well as many representatives of the chemical, oil and gas industries. Since 2020, the task force members have been grappling over questions like whether Louisiana can afford to refuse the permitting and construction of new industrial facilities.
This task force and the governor of Louisiana should be asking the opposite question: can we afford to proceed as we have been? More importantly, can we look to industry to solve a problem that they created?!
**UPDATE: This meeting was postponed. At the Wednesday October 27, 2021 Special Meeting the Council approved both resolutions. YOU DID IT! Thanks to the public outcry over increases to Entergy rates the Council approved a resolution to protect people and keep bills down. ALSO, the Council opened a new docket on resilience and storm hardening for our energy system. This is where we work out how to put power where the people are and keep folks safe. We need this effort across the state too!
Entergy’s failures with regard to Ida are only part of a larger pattern of corporate corruption and dysfunction. Entergy has demonstrated repeatedly that it is committed to a way of doing business that is unaffordable to ratepayers and unable to provide the kind of reliability and resilience that are becoming more and more necessary in the face of climate disaster.
At its regular monthly meeting on Sept. 23, 2021, the New Orleans City Council passed a slate of resolutions opening investigations into ENO’s transmission planning and its planning and response around Hurricane Ida, as well as commissioning an independent management audit of the company.
New Orleanians — who already experience one of the highest energy burdens of any city in the nation — should not be required to pay a single dime more to ENO at least until the audit and investigations are complete. We need city council members who understand the awesome authority they wield over Entergy, and who have the courage to act boldly in their regulation of the company. The future habitability of our city quite literally depends on it.