Northeast Louisiana gets first power bill hike in 40 years

26th December 2023   ·   0 Comments

By Wesley Muller
Contributing Writer

(lailluminator.com) — Residents in northeast Louisiana will soon pay more for electricity after state utility regulators earlier this month approved an immediate 12 percent rate increase for the Northeast Louisiana Power Cooperative – its first such increase in 40 years.

The Louisiana Public Service Commission voted 4-1 in favor of NELPCO’s application for an interim 12 percent base rate increase. Commissioner Davanté Lewis, D-Baton Rouge, cast the only dissenting vote, saying he wanted more time to review the request.

“Rates are very serious to me,” Lewis said, “and this is a significant increase when you talk about poverty in the state.”

NELPCO provides electricity to nearly 12,000 rural members across seven parishes, including some of the poorest in the state along the Mississippi delta.

While standard rate increase applications typically take six months to a year for approval before the commission, NELPCO requested immediate approval on an interim basis while the LPSC takes time to fully review and consider the application. If the LPSC, upon further review, later denies or lowers the increase, the utility will have to reimburse its members.

The 12 percent increase adds an estimated one-cent per kilowatt-hour charge to the average residential customer’s monthly bill or roughly an additional $17. NELPCO typically provides some of the lowest rates for electricity in Louisiana and will continue to rank among the lowest even with the increase, the co-op’s executives said.

NELPCO has not raised its base rate since 1984. General Manager Jeff Churchwell told commissioners the co-op had no other options but to ask for this increase.

“We are currently at a negative rate of return…We’ve gotten to the point [where] we’re tapped out,” he said.

In July, the utility discovered it was in a precarious financial position after it completed a years long cost-for-service study. It found the organization had only about three days worth of cash reserves on hand as of Sept. 30, 2022.

Churchwell said the co-op has been hit particularly hard by the supply chain crisis and rising interest rates. It has been forced to rely on expensive lines of credit.

Unlike investor-owned utility companies such as Entergy and Cleco, rural electricity cooperatives generate revenue only for the purpose of delivering utility services to their members, not to make a profit or pay dividends to shareholders.

When pressed on whether the co-op would accept a partial rate hike, NELPCO attorney J. Kenton Parsons pleaded with the commissioners to approve the full ask of 12 percent, saying it is a “dire financial situation.”

“We as a utility are coming in with not so much as our hands out but on our knees,” Parsons said.

The new rate could appear on customer bills as soon as mid-January.

This article originally published in the December 18, 2023 print edition of The Louisiana Weekly newspaper.