Council panel denies most of Entergy grid plan
5th February 2024 · 0 Comments
By Katie Jane Fernelius
Contributing Writer
(Veritenews.org) — A majority of New Orleans City Council members on Tuesday (Jan. 30) voted to deny most of an ambitious electrical grid-hardening proposal – along with additional ratepayer charges to help fund it – pushed by Entergy New Orleans for months.
The proposed project, dubbed “Operation Gridiron” by the utility, involves citywide improvements to power lines, poles and transmission equipment. It is meant to avoid a repeat of the catastrophic failures that followed Hurricane Ida in 2021, leaving most of the city in the dark for more than a week.
To pay for the first phase of the plan, Entergy New Orleans asked the council – which acts as the company’s regulator – to approve extra charges that would grow to about $12 per month for a typical ratepayer by 2028.
But in a 4-0 vote on last Tuesday, a council committee instead opted to advance only a part of the plan: a subset of proposed grid-hardening projects that are partly subsidized by federal funding.
The resolution will still have to go before the full seven-member council for a final vote, which is expected late next month.
“We all know increasing resiliency and reliability is critically important,” Councilmember Helena Moreno said at the top of the meeting. “But we also need to mitigate the impact on ratepayers.”
At stake is whether the Council should give the go-ahead on all of Entergy’s $559 million proposal – what the utility is calling Phase 1 of its ambitious Operation Gridiron, a more than $1 billion plan that would invest in “grid-hardening” tactics, such as upgrading poles to withstand faster winds, putting more wires underground and improving transmission into the city.
There’s near-unanimous agreement that the city’s electrical grid is in need of critical improvements to increase its resiliency, especially in the wake of more frequent and intense freezes, hurricanes and heat waves due to climate change. And Entergy has mounted an aggressive campaign to garner public support for the plan.
But its arguments appear to have fallen short, at least for now. The council resolution that went before the committee on Tuesday allows for the possibility of approving other parts of Operation Gridiron in the future. But that could be dependent on the utility meeting new guidelines the council will begin developing next month. The council says it will work with the utility and other partners to develop the guidelines, but those guidelines will be tied to existing reliability standards that will be strengthened over time.
The council’s resolution, while denying the overall project, does support $106 million in infrastructure investments in New Orleans East. These include upgrading transmission into the city, improving local distribution in New Orleans East and funding a backup battery storage system for the grid.
“These three large projects amount to the single largest investment in the New Orleans electric grid,” said Andrew Tuozzolo, chief of staff for Moreno, who presented on the resolution.
“If the resolution passes, ratepayers in New Orleans will still see higher bills, but at a much lower rate than the initial Entergy proposal. The council estimates that the bill impact will be $0.20 per month in 2024 and rise to $1.52 per month in 2027. “Utility costs are, in fact, driving people with limited or fixed incomes into significant energy poverty,” said Tuozzolo. “We have to do all we can to avoid making the city unaffordable, because it doesn’t matter how resilient the grid is if people can’t live here.”
In a statement following the vote, Entergy New Orleans CEO Deanna Rodriguez said the council’s approach would slow down much-needed grid improvements, putting city residents at risk.
“To protect customers everywhere else in the City and to prepare for hurricane season, we need to do the hard work of replacing 26,000 distribution poles that bring power into homes and businesses,” Rodriguez said. “There is a cost to this, but the cost of inaction and delay is dramatically worse.”
‘I know it doesn’t look great’
The council also debated the impact of Operation Gridiron on Entergy’s shareholders, arguing that the utility neglects necessary maintenance in favor of replacing overall infrastructure.
“Operation Gridiron is really proposed to the public as this altruistic endeavor, but that is not 100 percent true,” Councilmember JP Morrell said. “Entergy will profit from infrastructure investment… And you would admit that maintenance is not as profitable as replacement.”
“That’s fair,” said Courtney Nicholson, vice president of regulatory affairs at Entergy New Orleans.
In previous reporting, Verite News found that as bills have climbed, so have payments to Entergy shareholders. As of November, the utility’s parent company has paid out over $3 billion in shareholder dividends since 2020.
Over the past months, the utility has been promoting its plan widely, sending emails to customers asking them to reach out to their city councilmembers and “voice [their] support for Operation Gridiron today.” They’ve also advertised their plan on social media. ” A Jan. 12 post on X (formerly Twitter) from the Entergy corporate account reads: “Tell your Council Member to vote ‘yes’ on Resiliency.”
There’s also been support for the plan from an Entergy-supported nonprofit, Resilience New Orleans. The group is headed by Casey DeMoss, former executive director of the Alliance for Affordable Energy, a consumer and environmental advocacy group often at odds with Entergy.
At last Tuesday’s meeting, DeMoss gave a comment in favor of Entergy New Orleans’ proposed resiliency plan.
In November 2023, the same month the organization was founded, Resilience New Orleans released a study that said that all New Orleanians, including those experiencing social vulnerabilities, stood to benefit from Entergy’s proposed resiliency investments. DeMoss also wrote an op-ed in defense of Entergy’s plan for NOLA.com.
Other energy nonprofits in the city, like the Alliance for Affordable Energy and the Deep South Center for Environmental Justice, have expressed skepticism of Entergy’s proposal, and representatives for the organizations spoke up at the meeting in support of the Council’s resolution. They also advocated for the Council to approve grid resiliency efforts put forward by community members, not just the ones proposed by Entergy.
Resilience New Orleans’ website advertises that Entergy is a supporter of the nonprofit organization. The company is thus far its only financial supporter, DeMoss told Verite News.
When asked by Verite News about her nonprofit’s connection to Entergy, DeMoss replied: “I know it doesn’t look great.”
DeMoss said Entergy gave her organization $40,000 to pay for the study, which was performed by Maryland-based firm Hedgerow Analysis. Outside of that $40,000, DeMoss said that her non-profit has neither received nor spent any other money.
DeMoss, who now works for a tech start-up in Austin, Texas, said that after a recent conversation with Deanna Rodriguez, CEO of Entergy New Orleans, she became energized to advocate for a more resilient grid, so she started Resilience New Orleans.
“It’s a passion project,” DeMoss said.
“Like the City Council, Entergy New Orleans keeps affordability top of mind,” said Entergy New Orleans spokesperson Beau Tidwell in a statement. “Ms. DeMoss has a strong track record as an advocate for affordable power as the former director of the Alliance for Affordable Energy. That’s why we asked her to take an in-depth look at our resilience plan — to ensure that it was optimally designed to benefit our most vulnerable communities.”
Entergy has previously come under criticism for its PR tactics. In 2017 and 2018, contractors working for the company hired actors and leveraged beneficiaries of the company’s charitable foundation to voice support for a controversial power plant in New Orleans East. A PR firm also billed the company to monitor journalists and environmental activists who raised concerns about the plant. The council approved the plant in March 2018.
This article originally published in the February 5, 2024 print edition of The Louisiana Weekly newspaper.
