Updated March 4, February 8, 2021
Originally Posted January 29, 2021
In New Orleans, at least part of the bill spike is due to the Fuel Adjustment Charge more than doubling, plus the charge for the new gas plant, all on top of the higher usage from the cold and being home due to Covid. Entergy sent a letter to the City Council back on December 18th (attached), to let them know about some of these changes, as they are required to alert the Council if the fuel charge has a significant increase.
The Fuel Adjustment Charge gives us insight into the bill impact when power plants are down and gas costs spike. This charge (also called a Fuel and Purchased Power rider on bills) is based on what was happening in energy markets two months prior and it is always on this two month lag.
Back in November 2020 (think way back!) three things happened that all impact this one line item.
1) Grand Gulf, a nuclear power plant in Mississippi was down
2) Union Power station, a gas plant in Arkansas was down
3) The market price of gas spiked 12%.
Grand Gulf has had a reliability problem since at least 2016, and it has cost us all a lot of money, because just like Union, and other plants where Entergy has power reserved for New Orleans, whether it is reliably running or not, we pay for it, plus the additional power to replace the power it would have been generating. We’ve been asking the council for years to look closely at Grand Gulf and ask if New Orleanians are due a refund and if we should continue to pay for this plant. Union was also apparently down for a maintenance update for much of the month. Together, Grand Gulf and Union represent nearly 3/4 of New Orleans' generating capacity. So we had to pay an additional $3.9M to replace the energy that those two plants did not generate on top of the costs we already pay for those plants.
The third item really underscores the risk of fossil fuel markets. When an enormous portion of our electricity uses the same fuel and that volatile fuel price spikes by 12% (or any %) it is painfully visible on our bills. It reminds us that our monthly bills being tied to international energy markets is risky, which has been one of our arguments against continuing to invest in fossil fuel infrastructure like gas plants.
Which brings us to another item that is new on bills in New Orleans: THAT gas plant. You know that plant we’ve been talking about since 2016, saying it would cause a spike in bills and that we should invest in efficient and renewable resources instead. Well that new cost came onto bills back in November 2020.
Add this to the fact that because of Covid-19, residential energy usage has increased. Nationally the increase from a typical year is around 10%. Plus your January bill is paying for your December usage, which means whatever additional holiday cooking and baking and decorating you may have done with family adds to the kWh usage.
The New Orleans City Councilmember Helena Moreno has called a special meeting of the Utility Committee this coming Tuesday February 1 at 10 AM to hear from the public, get to the bottom of the utility bill issue, and hopefully take some action. This is your opportunity to weigh in on how these changes to bills are affecting you.
We are calling on the Council to extend the moratorium on shutoffs that Entergy has announced will end on February 1st and to conduct prudence reviews into the problems at Grand Gulf and the costs of the new gas plant in New Orleans.
The issue is similar in the rest of the state, but not quite as visible. We’re getting calls from outside Orleans Parish with out-of-sight Entergy bills, and while the Grand Gulf-effect is present there too, it doesn’t represent such a big part of their capacity so it doesn’t pack the same whollop. The price of gas still impacts the total bill too, but the real recognizable change in Entergy bills in the rest of the state is the addition of new power plants. Turns out the same amount of energy on a January 2020 Entergy bill (outside NOLA) costs between 8.6-10% more this month. That’s largely because the addition of three new gas power plants in the last couple of years so the costs are creeping up. We haven’t even seen the real costs of this summer’s hurricanes yet.
At this week’s Louisiana Public Service Commission meeting, CM. Lambert Boissiere asked staff to help draft a directive to look into some of the shocking bill spikes come customers are experiencing. We also know that the Commission is also looking into the issues at Grand Gulf, and we hope the Council joins this effort.
What you can do
For those outside of Orleans Parish:
For more information check out our interview with WDSU:
Sky High Electric Bill? Here's Why! Interview with Our Executive Director Logan Burke by Jennifer Crockett