In 2017, Entergy was pulling out all the stops! Put aside the $300 million in finance charges, Entergy is charging the citizens of New Orleans. It would be worth it, they claimed. New Orleans would be able to withstand a direct hit by a major hurricane. In fact, they said an auto black switch could immediately turn on the lights. Maybe some downed power lines might affect a particular neighborhood. But electricity would be available for distribution immediately. But did Entergy focus on profits or electricity?
Fast forward to today. Five days out and the city is less than 1% powered. In fact, only about 475 homes got powered by nearly half billion-dollar plant on day 3. That’s over $1 million a house and two days late. And Entergy’s current plans do not even include using the new plant to restore power. Entergy’s focus is on rerouting and restoring downed transmission lines that feed the city.
But back in 2017, Entergy promised the exact opposite. The new plant meant New Orleans could be a power island. Everybody might be dark around the city. But New Orleans and its brand new gas-powered plant would shine bright after the storm. Entergy claimed the new power plant was the ultimate backup power plan. If we approved the $300 million dollar gas powered plant in New Orleans East, that all the citizens of Orleans Parish would have lights right after a major hurricane hit the city. Even though the plant was old school technology, it was dependable. And a fancy newfangled automatic black start switch would kick on if the winds knocked out transmission lines.
A Bag of Goods
Entergy sold New Orleans a bag of goods. Construction of the plant was solely to increase Entergy’s bottom line. There are two ways for energy companies to make money off municipalities. One is to have lots of people turn on lots of lights. They pay their bills and the energy company makes a profit. The other is through the creation of asset payments over time. Front the costs of building a new gas plant. Then charge the ratepayers for the cost of the plant plus interest over time. Oh and charge them higher rates for the power it generates too.
In this case Entergy makes money three ways: 1) profit on the construction of the plant. 2) They inflated the cost of the plant (for which ratepayers reimburse the company) and 3) are guaranteed monthly interest. They profit nearly an additional $250 million on the New Orleans East plant. Good for them. But at least have a plant that works to show for it. Otherwise, the plant is either a straight con or complete incompetence.
And the proof is in the outage map.
For a long time, politicians would say they are going to run government like a business. But government is not a profit center. Entergy focused on generating profits. Government should focus on generating electricity availability.
The New Orleans City Council is the regulatory body of Entergy New Orleans. Many members have talked about how lucky we are that we didn’t flood. That after Katrina, we could not be back in the city for weeks. That power took over a month to restore. And this time we have power in under two weeks. We invested billions in new levees and got bang for our bucks. No flooding.
And we invested $650 million(construction costs plus interest) for a shiny new plant. And the investment by ratepayers was for immediate and citywide power availability. Look again at the outage map.
“Right now my main focus is on getting power restored. And I am deeply grateful to the men and women on the ground in New Orleans working to turn our lights back on. Once we’re back, there will be some serious questions top execs at Entergy need to answer around reliability, transmission and whether NOPS really did what ratepayers were promised it would do
Helena Moreno, New Orleans City Council President
Remember Entergy promised:
“In addition, the unit will also include black-start capability, which will enable the Company to start the unit even when there is no power on the electric grid. This will give the company the ability to restore electric service, should a complete loss of service occur. This could be a tremendous benefit if New Orleans is electrically “islanded” from the rest of the interconnected transmission grid, as it was after Hurricane Gustav.”
Entergy New Orleans
RELATED: City Council Must Do the Right Thing
This is much more than just a company delivering less than it promised. Every month residents pay for the new power plant. Like a regressive sales tax, this fee affects the least amongst us the greatest. People who need oxygen and other medical devices and believed Entergy are in serious trouble. Seniors who relied on Entergy’s promises are left sweltering and at risk. People just want to save their food. Maybe get some air circulation from a fan. So, they improperly install a generator and die. Others are spending rent and car payments on hotels.
“Entergy gave New Orleans exactly what it wanted. A power system to withstand storms. Too bad it failed them and put lives at risk.”
Monique Harden of the Deep South Center for Environmental Justice
Our plan and the subsequent investment in the levee system worked. Our streets are dry and passable. Too bad we did not properly plan or invest inside the levee system. Our people are suffering as a result.
Oliver Thomas Candidate for City Council District E
Entergy promised this would not happen. But they focused on generating profit not electricity.