High Utility Bills Hit New Orleans Residents
MIKE PESCA, host:
After Hurricanes Katrina and Rita hit the Gulf Coast, the utility company there thought back to 9/11/01. Then, New York's Con Ed got hundreds of millions of dollars for damaged power lines. That saved customers from paying for the damage. But in New Orleans, it's been a different story for the investor-owned utility, Entergy, and bills are already going up. Molly Peterson reports.
MOLLY PETERSON: About the only thing Katrina's salty floodwaters didn't destroy at the Avenue C electrical substation was the bricks and mortar. Everything else - the lighting, the control panels, the conduits - it's all new, and workers say better - except the back-up battery charger.
(Soundbite of buzzing noise)
Mr. RAY YATES (Maintenance Supervisor, Entergy): We hate that thing.
PETERSON: Maintenance supervisor Ray Yates helped restore Entergy's New Orleans substations, including this one three blocks from the site of the 17th Street canal breach. He says as Lakeview residents return and rebuild, they've welcomed Entergy crews with nothing but love.
Mr. YATES: You know, we've have them ride by and ask us if there's something they can get for us. Do we need something to drink? They'll ask - you know, that'll be their lead into asking how soon we'll get the power on, but it's all been positive.
PETERSON: Then New Orleanians get their bills, and Stephanie Borde(ph), a student in the River Bend area, is livid. A hundred dollars a month in January turned into almost $300 in the summer months. And now Borde says she owes Entergy $534 and change just for September.
Ms. STEPHANIE BORDE: I mean, I just feel absolutely powerless. We don't know what to expect from one month to the next. I mean, we've - basically our savings has gone to paying our Entergy bills, and we can't keep that up.
PETERSON: She may have to. Entergy New Orleans has asked regulators to approve a rate hike of 25 percent of more, about 39 bucks a month for an average bill. Its CEO, Dan Packer, points out floodwaters wrecked gas and electric lines. The company's bankrupt, and it's lost half its customers.
Mr. DAN PACKER (CEO, Entergy New Orleans): You know, this is the worst anyone has ever seen, and you don't just climb out of that free of charge. The way we're looking at it is if we don't get all the insurance we need and we don't get our rates adjusted properly, we can only do so much with the money we have coming in.
PETERSON: That's not much. Municipal utilities are entitled to a bailout after a disaster, but the Bush administration has opposed direct help for privately held power companies like Entergy. So instead, the state may carve a smaller sum for the companies and their ratepayers out of the federal block-grant aid it controls. Andy Kopplin is the executive director of the Louisiana Recovery Authority.
Mr. ANDY KOPPLIN (Executive Director, Louisiana Recovery Authority): Across the state of Louisiana, rate-payers are going to face 4 to 6 percent increases to pay for storm damage over the next 10 years, and all of us will be paying that. But in New Orleans, those catastrophic increases, we're going to do our very best to try to buy those down. The bad news is we've got infrastructure demands that continue to grow every day.
PETERSON: And Kopplin says the state's still haggling with FEMA for aid. Last week, Louisiana Governor Kathleen Blanco said she may recommend Entergy and the other utilities get $200 million altogether, a fraction of the $1.5 billion they wanted. So city council members in New Orleans, who must make a call on the rate hike next month, are looking for other rates to keep residents' bills down. Councilwoman Shelley Midura says Entergy's booming parent company should share some of the burden of rebuilding.
Ms. SHELLEY MIDURA (Councilwoman, New Orleans): We're also asking parent company Entergy - Ma Entergy as I like to call it - to help out the subsidiary, the rate-payers of New Orleans. So I really think they need to step up to the plate and give back to the community what they have profited on in the past.
PETERSON: But the parent company's shareholders aren't legally obligated to take a haircut on profits, and Entergy New Orleans CEO Packer says they've already extended a line of credit to keep him in business so far.
The debate has renewed calls for making Entergy New Orleans into a municipal utility. Even supporters of the idea, like the Alliance for Affordable Energy's Karen Wimpelberg, say that's a long way off. But in the near term, she'd still like to see Entergy provide some relief.
Ms. KAREN WIMPELBERG (Alliance for Affordable Energy): Right now, we only have 40 percent of the rate-bearers here, and we're paying 100 percent of the burden.
PETERSON: Wimpelberg fears that if the city council and the state don't deliver good news, there could be even fewer customers in town to share that burden. Molly Peterson, NPR News, New Orleans.