BATON ROUGE, La. — Most Louisiana Entergy customers will see higher rates this month because of rising natural gas costs and recent storm restoration expenses, the utility said.
Electricity rates will go up in June by as much as $25 for an average household, the company said Friday.
The rate increases will affect areas covered by Entergy Louisiana, which supplies power to roughly 1.1 million customers in 58 parishes, including most of south Louisiana, The Advocate reported.
The impact on customers of Entergy New Orleans, Entergy Corp.'s Orleans Parish subsidiary, remains to be seen. The New Orleans City Council is considering whether to approve a $150 million plan to finance the company’s storm repairs, which could mean higher customer rates.
Yovanka Daniel, Entergy Louisiana’s customer service vice president, said two rate increase categories for June bills involve a fuel adjustment to compensate for the natural gas cost spike, and a fee to offset restoration costs for extensive storm damage from hurricanes Laura, Delta, Zeta and Ida and Winter Storm Uri in February 2021.
For natural gas prices, rates would jump by about $25 for a home that consumes 1,000 kilowatt hours in a month, officials said. However, Daniel said Entergy will push part of that cost to future bills to ease the burden on customers. That would be a $10 deferral for the average customer, leading to a $15 fuel adjustment increase on June bills.
Utility companies routinely charge adjustment fees when faced with higher costs for their fuels, including natural gas.
Daniel said April natural gas prices were twice as high as the same month last year and triple the rate from April 2020. The global supply of natural gas is in flux as countries worldwide try to wean themselves off Russian energy because of the country’s war in Ukraine.
“We will continue to work with the Louisiana Public Service Commission to spread out natural gas costs over several months, rather than placing them all on one bill,” Daniel said.
For storm restoration costs, the average customer could see an increase of $9 to $10. That spike is part of a $3.2 billion “securitization” plan the commission approved in late February to finance Entergy’s storm restoration expenses.
Coupled with the fuel adjustment, that adds up to a $25 surcharge for the standard Entergy Louisiana customer.
“It is important to note that Entergy does not profit off either natural gas price increases collected through the fuel adjustment or storm recovery costs,” Daniel wrote. “We will continue to do everything we can to assist those who are burdened by these increases along with the LPSC and our community partners.”
The storm surcharge is slated to last for 15 years, according to Entergy Louisiana’s PSC-approved plan.
“Spreading it out over a number of years keeps bills affordable,” Entergy Louisiana spokesman David Freese said.
Daniel said similar charges for hurricanes Katrina and Rita rolled off the books in 2018, and surcharges from hurricanes Gustav and Ike will expire later this year.
Daniel said some storm damage the last two years “required an entire rebuild of our electrical infrastructure.”
She said the PSC-approved plan is expected to save $2 billion “relative to traditional utility financing” despite the customer rate increases.
“Severe storms like those seen in 2020 and 2021 are an unfortunate reality to our portion of the country and like many of you, we also must do what is necessary to recover, rebuild and harden our system ahead of the next weather event,” she wrote.