N.O. City Council OKs slice of grid-hardening plan, rejecting most of Entergy proposal
26th February 2024 · 0 Comments
By Josie Abugov
Contributing Writer
(Veritenews.org) — The New Orleans City Council on Thursday (Feb. 22) nixed most of Entergy New Orleans’ ambitious, $1 billion electrical grid-hardening plan, approving a much more limited plan that will have minimal effect on ratepayers’ bills. The final resolution, which passed 7-0, gives the utility the go-ahead for a handful of the hundreds of projects it had proposed, with plans to review the remainder piece by piece over the next several years.
Entergy New Orleans had pushed for months for the council to approve the first phase of what the company called “Operation Gridiron,” which included citywide upgrades to transmission and distribution infrastructure, as the best way to ensure the grid’s long-term viability and safeguard against catastrophic failure. But council members, who serve as the utility’s regulators, balked at the company’s financing plan: monthly service charges to New Orleans ratepayers.
Council members have previously stressed the need to safeguard the city’s grid from severe weather, which will only increase in frequency due to climate change. But they said they could not sign off on a plan that would create a greater burden to city residents already facing significant cost-of-living increases, including power bills that rose by about 60 percent between 2019 and 2022, according to a Verite News analysis.
Following the vote, council members emphasized that they were only approving a set of infrastructure projects funded with federal grant dollars.
“I don’t want people to look for an increase in bills,” Councilmem-ber Eugene Green said.
The utility company developed its proposal at the council’s request following Hurricane Ida, during which the city lost power for more than a week and 21 people died due in large part to heat exposure..
The $1 billion “Operation Gridiron” plan would have overhauled the city’s grid through replacing and improving the city’s poles, power lines, and transmission equipment. The plan would have also led to an additional $12 in monthly utility charges for the average ratepayer by 2028.
The council instead approved a resolution, advanced by a committee last month, to greenlight just three infrastructure projects out of the 670 Entergy has proposed, according to an Entergy spokesperson. For future initiatives, the council will implement an approval system to ensure that each project adheres to reliability standards, allows public input and limits the burden on ratepayers.
The three projects that the council approved out of Entergy’s larger plan constitute “the largest grid investment in New Orleans history,” according to a January presentation by Andrew Tuozzolo, chief of staff for Councilmember Helena Moreno. The greenlit projects include rebuilding 23 miles of transmission towers to withstand 150 miles of wind, constructing a battery storage system fueled by a solar plant, and hardening hundreds of distribution structures in New Orleans East.
Altogether, the projects cost around $110 million, substantially less than the $559 million that the company was seeking for the first phase of Operation Gridiron. The approved projects are partly funded by a federal grant program that requires 40 percent of the project’s benefits flow to “disadvantaged communities that are marginalized, underserved, and overburdened by pollution.”
The federal dollars will mean less of a burden to ratepayers. According to the council, the projects will only increase utility costs by $0.20 per month in 2024 on average, reaching an average $1.52 monthly increase by 2027.
The council resolution also included additional measures for reporting requirements, which will provide the public with more information about who is impacted by the infrastructure projects.
“We’re satisfied with the change and are looking forward to seeing the results of these projects,” said Jesse George, New Orleans policy director of the Alliance for Affordable Energy, a consumer and environmental advocacy group that supported the more limited proposal.
The Alliance for Affordable Energy was one of 13 organizations that sent a Feb. 8 letter to the council asking the council to investigate Entergy’s extensive marketing campaign for Operation Gridiron. The company has emailed customers and advertised the plan on social media, urging residents to tell their city council members that they support the plan. It also funded, in full, a newly formed nonprofit group called Resilience New Orleans, that supported the plan. The group, which commissioned and released a study touting the purported benefits of moving forward on Operation Gridiron in full, is headed by the former executive director of the Alliance for Affordable Energy.
“As the regulator for ENO, the Council now has the opportunity – and an obligation – to determine whether or not the utility is using ratepayer funds to finance these advertising and advocacy efforts rather than investing in repairs to its poorly maintained and unreliable grid,” the letter reads.
While Entergy has said that rejecting the full plan puts the city at risk in future storms, some council members argued that the utility company has avoided regular maintenance in favor of large-scale infrastructural reboots. At last month’s committee meeting, Courtney Nicholson, vice president of regulatory affairs at Entergy New Orleans, acknowledged that these larger plans are more profitable to the company than routine fixes.
“We are grateful to the Council for their action, and for their approval of the first of many projects needed to harden the grid and make our City more safe,” said a spokesperson for Entergy New Orleans. “We look forward to working with them through the approvals process for the remaining projects, and to making the entire City more resilient.”
Katie Jane Fernelius contributed to this report.
This article originally published in the February 26, 2024 print edition of The Louisiana Weekly newspaper.
