Alliance for Affordable Energy
  • Home
  • Who
  • What
    • Consumer Protection and Education >
      • Regulate Our Pipelines
      • Health Impact Assessment
    • Clean Energy >
      • Renewable & Clean Portfolio Standard
      • Transmission
    • Energy Efficiency >
      • EEFA
    • GS4GND
    • Past Work
  • How
    • New Orleans City Council >
      • Council Actions
    • New Orleans Dockets >
      • UD-22-05 Hurricane Ida Costs
      • UD-22-04 Demand Solutions
      • UD-22-03 Battery Storage
      • UD-22-02 100% Renewable
      • UD-22-01 Storm Reserve
      • UD-21-03 Resilience
      • UD-21-02 Zeta Cost Recovery
      • UD-21-01 Winter Storm Uri
      • UD-20-02 IRP (2021)
      • UD-19-01 RPS
      • UD-18-07 ENO Rate Case
      • UD-18-02 EV Charging
      • UD-18-01 Smart Cities
      • UD-17-04 Reliability
      • UD-17-03 IRP (2018)
    • LA Public Service Commission >
      • LPSC 2022 Election
      • Engage with the LPSC
    • Lawsuits & Appeals
    • Climate Initiative Task Force
  • News
    • The Watchdog
    • People's Power Hour
    • MISO Soup
    • Hurricane Ida
    • Events Calendar >
      • AAE House Party
  • Learn
    • Glossary
    • Timeline
    • Reports
  • Get Involved
    • Support
    • Newsletter
    • Intern and Volunteer >
      • Wimpelberg Intern Fellowship
    • Contact Us

The Watchdog

A blog on energy matters in Louisiana!

Prudence Review vs. Utility Reporting: A Tale of Two Regulatory Bodies

6/7/2021

0 Comments

 
From February 14th - 18th, 2021, Louisiana and Texas experienced extremely cold temperatures, relatively unusual for the region. Referred to as Winter Storm Uri, or most recently as The February Arctic Event, the freezing cold temperatures pushed our electric infrastructure to the brink of mass failure. Electric generating units failed due to the freeze, ice-covered tree branches took down power lines, gas supply could not meet demand, because of the nature of gas used in the region, the pipelines themselves could not withstand the temperatures, and the demand for energy to heat our homes was at an all time high. This created a Maximum Generation (or Max Gen) event within our electric market, MISO, and did lead to rolling blackouts for Louisianans.

Now that that extreme weather has passed, and Louisiana was spared the worst of it, our utility regulators want answers. Simple ‘supply and demand’ principles mean that that Max Gen event is going to come with a hefty price tag, but for who and when? The high fuel costs, recovered through the
Fuel Adjustment Clause (FAC) will likely be spread out over 6-12 months, while costs associated with damaged power plants and transmission & distribution lines can be securitized with long-term bonds.
​
The New Orleans City Council, which has regulatory authority over Entergy New Orleans (“ENO”), has opened a docket (UD-21-01) in order to conduct a prudence investigation of ENO’s decision-making during the winter storm. 
Picture
Preliminary findings have revealed that while MISO ordered ENO to shed 26 MW of power in order to avoid a total grid shutdown, instead it shed approximately 60 MW, more than double the required amount, leaving 25,000 New Orleanians freezing in the dark during one of the coldest nights of the winter. Compounding the injury, many ratepayers saw their bills increase drastically in the wake of the storm, while Entergy gleaned a record $1.4B in profits in 2020.

While the New Orleans City Council regulates Entergy New Orleans, the Louisiana Public Service Commission (LPSC) regulates almost all of the State’s other utility providers, including Entergy Louisiana, Cleco, SWEPCO, Atmos, and our electric co-ops. The LPSC posed a series of questions to their jurisdictional utilities. Sure, information gathering is a great first step, yet allowing the utilities to control the narrative through self-reporting can be a slippery slope. Further, the LPSC seems positioned to revisit an old rulemaking docket from 2018 that addressed a similar Max Gen event in January of that year, which could help to determine what went wrong and why, identify best practices and set rules for future Max Gen events. That process, however, likely will not result in customer refunds should the LPSC determine our utilities incurred costs imprudently, and then passed those costs along directly to the customer. That process could end up buried in a fuel audit docket five years from now, which will then be subject to Commission review, and due to regulatory lag, may not be subject to public engagement and scrutiny until 2030. We know customers are already paying these high fuel costs associated with the Winter Storm, and it’s going to be a lot harder to claw back those dollars through the usual regulatory process. 

Max Gen events should be unusual and fully investigated to make sure that all of the costs passed along to the customer are incurred prudently. We, in Louisiana, are in a unique position of having two separate regulatory bodies regulating our Investor Owned Utilities (IOUs) which can result in very different utility policies (and costs!) for a neighboring zip code. A Max Gen event and investigation can pose some very unique challenges as all of our IOUs are in the same MISO electricity market. Should New Orleans’ prudency review uncover some company wide market shenanigans, will the LPSC follow through for utility customers they represent?
0 Comments




Leave a Reply.

    RSS Feed

    Archives

    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    October 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    August 2019
    July 2019
    June 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    October 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    May 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    December 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    January 2014
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012

    Categories

    All
    Alexandria Lia
    ALI
    ALI Meiner
    Andrew Wiseman
    Anniversary
    Bia Assevero
    CalGreen
    CCS
    Charles Rice
    Clean Energy
    CLECO
    CLECO FAQ
    CLECO Sale
    CLECO Sale Denied
    CLECO Stock
    CLECO Stock Prices
    CLECO Takeover
    Climate Change
    Clyde Holloway
    CO2
    Coastal Restoration
    Corruption
    Cost
    David Roberts
    Decoupling
    Dirty Energy
    Education
    Elections
    Energy
    Energy Efficiency
    Energy Policy
    Energy Smart
    Entergy
    Entergy New Orleans
    Environmental Risks
    EPA
    FERC
    Gas Plant
    Georgetown
    Government
    Grand Gulf
    Green Building
    Grid Failure
    GSREIA
    Gulf Of Mexico
    Health Risks
    Hurricane
    Hurricane Sandy
    Industrials
    Infrastructure
    IRP
    Land Loss
    Land-Use
    LA Public Service Commission
    LEED
    Liquid Air
    Louisiana
    Louisiana Public Service Commission
    LPSC
    MACQUAIRE
    Mayor's Office
    MISO
    Natural Gas
    New Iberia
    New Orleans City Council
    News
    NRDC
    Nuclear
    Oil & Gas Leases
    People Power
    Pipelines
    Power Grid
    Power Outages
    Power Plant
    Public Interest
    Regulation
    Reliability
    Renewable Energy
    RENEWABLE ENERGY POLICY NETWORK FOR THE 21ST CENTURY
    Resiliency
    Resolutions
    RTO
    Rulemaking
    Sacrifice Zones
    Sea Level Rise
    Solar
    Storage Solutions
    Subsidies
    SWEPCO
    TED Talks
    The Town Walk
    Town Hall Meetings
    Transmission
    Utilities
    Vicki Arroyo
    Watchdog
    Water Conservation
    Water Use
    WDSU
    Wetlands
    WWL Radio

    RSS Feed

Intern & Volunteer
If you want to be a frontline soldier on environmental protection, social justice, or environmental racism, come to Louisiana” –Gary Groesch, Founder of AAE
Calendar
View our events calendar ​for important upcoming community events and public meetings!
Support our work- ensure fair, affordable, and environmentally responsible energy for all.
501(c)3 IRS Notice

Alliance for Affordable Energy
Phone: (504) 208-9761
4505 S Claiborne Ave
New Orleans, LA 70175

Copyright © 2022 · Alliance for Affordable Energy
  • Home
  • Who
  • What
    • Consumer Protection and Education >
      • Regulate Our Pipelines
      • Health Impact Assessment
    • Clean Energy >
      • Renewable & Clean Portfolio Standard
      • Transmission
    • Energy Efficiency >
      • EEFA
    • GS4GND
    • Past Work
  • How
    • New Orleans City Council >
      • Council Actions
    • New Orleans Dockets >
      • UD-22-05 Hurricane Ida Costs
      • UD-22-04 Demand Solutions
      • UD-22-03 Battery Storage
      • UD-22-02 100% Renewable
      • UD-22-01 Storm Reserve
      • UD-21-03 Resilience
      • UD-21-02 Zeta Cost Recovery
      • UD-21-01 Winter Storm Uri
      • UD-20-02 IRP (2021)
      • UD-19-01 RPS
      • UD-18-07 ENO Rate Case
      • UD-18-02 EV Charging
      • UD-18-01 Smart Cities
      • UD-17-04 Reliability
      • UD-17-03 IRP (2018)
    • LA Public Service Commission >
      • LPSC 2022 Election
      • Engage with the LPSC
    • Lawsuits & Appeals
    • Climate Initiative Task Force
  • News
    • The Watchdog
    • People's Power Hour
    • MISO Soup
    • Hurricane Ida
    • Events Calendar >
      • AAE House Party
  • Learn
    • Glossary
    • Timeline
    • Reports
  • Get Involved
    • Support
    • Newsletter
    • Intern and Volunteer >
      • Wimpelberg Intern Fellowship
    • Contact Us