Jul 072014
 

Owen Courreges

This time of year, when the mercury starts erupting comically out of the top of every thermometer, every New Orleanians eyes turn worriedly to their electricity bill. This is because whenever temperatures spike, so does the monthly amount we owe Entergy New Orleans, our much-maligned local electric utility.

Many people have long believed that Entergy is gouging them.  This is to be expected when bills skyrocket and people begin seeking out scapegoats. 

The reviews of Entergy on Yelp are particularly hilarious.  Here’s a representative sampling:

“Being an Entergy customer is like being in an abusive relationship.”

“Dear Entergy: You suck.”

“The reviewer below me is right. You do suck.”

…And so on.

However, it turns out that critics were right.  It wasn’t just a case of sour grapes; New Orleanians were, in fact, being gouged.

In 2005, the Federal Energy Regulatory Commission (FERC) held that Entergy had illegally charged Eastbank customers more than 11% variance above or below its company-wide median.  Although it was actually the City of New Orleans itself that authorized the higher rates for eastbank ratepayers, FERC held that Entergy couldn’t charge a dramatically higher rate for Entergy New Orleans customers than those of its other units.

A lawsuit filed the previous year by the Public Service Commissions of Louisiana, Texas, Mississippi, and Arkansas, as well as the New Orleans City Council (New Orleans’ utility regulator), had sought to recover any ill-gotten sums on behalf of beleaguered ratepayers.

For New Orleans, the lawsuit netted $14.6 million dollars in 2013 alone, a tidy sum that Entergy collected in a reserved, interest-bearing account. Per the court’s order, Entergy then transferred the award to the relevant regulatory authority, the New Orleans City Council, so that it could be distributed back to ratepayers.

Except that didn’t happen.  Instead, the city simply stole it.

The veneer of legality for this theft was an ordinance authorizing the use of the award, acknowledged to be “ratepayer funds,” to fund the city’s streetlighting LED conversion program.  It may be a noble cause, but the city wasn’t bilked – ratepayers were.  It’s difficult to understand exactly how, legally, the city can keep the funds.

Councilwoman Cynthia Hedge-Morrell defended the move at a meeting in April by explaining that New Orleanians taxpayers pay for streetlighting anyway, so, you know, same difference.

“One of the things that ratepayers do not understand is that you, the ratepayer, through city funds, are paying to maintain all of those streetlights,” Hedge-Morrell explained.  ”Those streetlights are not maintained by Entergy Corp. or ENO, and those streetlights are totally at a cost to the city of New Orleans.”

Hedge-Morrell is correct that we pay for streetlighting either way, and it’s also true that upgrades to street lighting are overdue.  However, that doesn’t make the theft of the ratepayer funds more noble or less improper.

What really happened is that the city essentially passed a one-time tax or fee on ratepayers equal to the amount they were owed back.  It’s unclear whether the city actually has legal authority to enact such a tax or fee, and in times when New Orleanians are being squeezed financially from all sides, it’s unclear that it’s good policy.

As erstwhile city council candidate Drew Ward opined, “[t]here is certainly nothing wrong with the city working toward replacing and repairing existing streetlights … but to have such efforts funded with money wrongly appropriated from cash-strapped residents is not something most New Orleanians would tolerate.”

Ward is correct.  We shouldn’t tolerate this, but it’s happening regardless with very little debate and little public outcry.  The council vote (cast a few weeks prior to the newly-elected members taking their seats) was 6-0, with Stacy Head absent.

In the past Head has criticized Landrieu’s piecemeal approach that lacked long-term sources of funding.  Given that the city is swiping a one-time award owed to ratepayers to pay for a portion of LED streetlight upgrades, it’s difficult to gainsay her criticism.

Entergy may “suck,” but the city council is supposed to be the bulwark between their avarice and our pocketbooks.  In that regard, the city council is failing.  In my opinion, we should all be demanding our money back.

Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.

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  • pfvayda

    So, Owen just how do we go about insisting that the City give us our Entergy refund?

    • Owen Courrèges

      pfvayda,

      Alas, the only way I can see is a risky class-action lawsuit.

      • pfvayda

        which basically means we are once again screwed by the city of New Orleans.

  • 4climatescience

    Taking a long-term view, I urge New Orleans (and Louisiana) homeowners to minimize the amount they fork over to Entergy on an annual basis by both improving their home’s energy efficiency and by taking advantage of the current (short-term opportunity!) rebates and tax credits available for installing solar panels on their property! The State of Louisiana (through the end of 2016) will rebate 50% of the cost of such systems (up to a total of $25,000) and the Federal Government offers a 30% tax credit for the same. If their home’s roof receives enough sunlight for such a system, Louisiana homeowners can put a $25,000 photovoltaic system (able to generate ~5.5–6 kW of power) on their property for $5,000. Not only will you save $$$ each month, but you’ll make a huge improvement to your home! Payback times under these current incentives are about 5 years. How many home improvements can you say that about? We did this last fall and our Entergy electric bills since have ranged from $4.50-$10 (including last month!). This would seem to be a total no brainer. No one can fleece you out of $ you’re not paying out in the first place!

    • uptown_rooster

      **The above message brought to you by Joule Energy, South Coast Solar, etc.

    • chickadee

      Hear, hear!

    • disqus_LUcJwwHDPb

      Nice. I come from Austria, where there’s way less sunlight than here, and even there, those panels are such an energy-saver. I’m frankly surprised that the whole south is not covered with panels yet.

    • Craig

      And what about renters?

  • Jim McArthur

    So: Entergy illegally overcharges their customers: the City intercepts and steals the refund due the customers: because the same customers/taxpayers have to pay the City for streetlighting: that they pay for, but don’t get (the one outside my house has been out of service since November). . . the logic being, I assume, that the City is entitled to steal your refund so you can pay them twice for services you won’t receive? This is the same logic that would have us hiring offduty NOPD officers to (not)patrol the same streets they’re already getting paid out of tax dollars to (not)patrol.

  • Phil Frady

    Owen your elitism is showing and it is really embarassing to see you do this to yourself.

    • Owen Courrèges

      ??? This comment really makes no sense.

      • Phil Frady

        Owen I’m really not surprised in your response. Your white privilege is indeed a handicap for you.

        • Owen Courrèges

          You’re still not making any sense. “White privilege?” Try explaining your thoughts. Use your words.