Entergy’s New Orleans subsidiary plans to seek approval from the New Orleans City Council to borrow $150 million to replenish its storm reserves and repay them through a monthly charge on customer invoices. The utility company said in a statement Wednesday that Hurricane Ida had depleted its disaster recovery account and that it intended to repay the securitized bonds over “approximately 15 years” through the taxpayer surcharge.
The typical New Orleans residential customer who uses 1,000 kilowatt hours of electricity can expect to see an estimated increase of $3.94 per month, according to Entergy New Orleans. After 10 months, the estimated fee will decrease to a range of $2.75 to $3.00. If the board approves the proposal, the increase will take effect during the next billing cycle.
“Ahead of the upcoming hurricane season, Entergy New Orleans must be prepared for potential extreme weather events, and a storm reserve provides an additional tool to assist in effective storm restoration,” the company said in its statement.
Entergy New Orleans said its use of securitized bonds, as opposed to a traditional loan, will save customers about $50 million in interest payments over the debt repayment period. The utility company typically seeks bond approval from regulators, in this case the city council, rather than borrowing money at market rates.
Last month, subsidiary Entergy Louisiana received approval to recover $3.2 billion from customers over 15 years to cover its costs from three hurricanes and a winter storm. The Public Service Commission approved the storm tariff amid criticism that parent company Entergy Corp. paid out $1.5 billion in dividends to its shareholders and its chief executive received a $4 million pay raise over the same period.
Entergy customers will pay $3.2 billion for storm repairs over 15 years
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