Remembering the days that were too hot without electricity after the recession of Hurricane Ida, talking about “hardening” the electricity grid will become more abstract.
What will not change is what has already happened: customers pay more.
Take out this month’s electric bill and compare it to the October 2020 bill.
Each utility in Louisiana charges more, on average 12% more statewide, or $ 11.67 for a residential customer using 1,000 kilowatt-hours of electricity, according to reports on file by the Civil Service Commission, which regulates private for-profit companies. and nonprofit cooperatives that sell electricity throughout the state.
This is the average.
The approximately 1 million Entergy Louisiana customers were billed $ 119.70 for 1,000 kWh this month. That’s $ 13.38 more – a 12.6% increase – than the $ 106.32 in the October 2020 bill.
Cleco, which covers parts of the parish of St. Tammany, billed its residential customers $ 130.63, or $ 22.54, a 21% increase from its October bill of $ 108.09. 2020.
Regulators and company officials point to the surprise ice storm in February, these surprisingly high costs spanned several months; unusually hot weather, including a full week above the dangerous heat index of 105 degrees; and a 78% increase in the price of natural gas since last October.
All of this is true, says Logan Burke, who heads the New Orleans-based consumer group Alliance for Affordable Energy. But rate increases approved by the PSC, as well as surcharges for new plants in the case of Entergy and the use of an expensive old plant to cover Cleco’s excess electricity needs also play a role.
Nickels and dimes taken separately, but “It’s all of those fees added up that create a pancake effect,” Burke said.
These price increases are just the start. Customers must reimburse the costs of restoring last year’s Hurricanes Laura, Delta and Zeta and then this year’s Hurricane Ida. She says PSC testimony estimates suggest another 7-10% increase in the future.
“All of the reasons point to the frustrating reality that our current system places customers in the position to bear all the risks associated with utility company decisions,” said Craig Greene, President of PSC, R-Baton Rouge. Private utilities are allowed to charge customers the cost of manufacturing and transporting electricity plus a profit.
“I’m pushing for a top-down review of how our utility system works. I want a Louisiana where businesses can play games and where their clients benefit from businesses that avoid risks, without passing them on. “
Study groups are the go-to answer when bills from customers – that is, voters – go up.
After Hurricane Katrina in 2005, when monthly bills also skyrocketed due to the prices of natural gas, which powers about 70% of the generators that produce electricity in Louisiana, commissioners looked for ways to diversify the mix. of fuels. Despite much talk about expanding solar, wind, biomass, and other fuels, when prices came down, natural gas was always the cheapest.
The amount of natural gas used to generate electricity in Louisiana has increased from 41.5 million Mcf in 2005 to 70.8 million Mcf in 2020, according to the US Energy Information Administration.
Hurricane Gustav in 2008 knocked down transmission and distribution lines and plunged southern Louisiana into weeks of darkness as utilities repaired the damage. State commissioners and utility leaders have held hearings to discuss ways to harden the lines, possibly bury them, so that the power grid will work after a storm. But the cost of such an endeavor, which would be paid by customers, ended that conversation.
The truth is, residents of Louisiana cannot afford to pay for necessary upgrades.
Another study will undoubtedly focus on what needs to be done, but will do little to lessen the blow to individual taxpayers.
Burke said a more immediate alternative is called “energy efficiency”. Basically, the relatively small program requires utilities to invest in ways to reduce consumer use of the product they sell. Utilities are allowed to charge all their customers the cost of identifying and repairing leaks in homes, subsidizing the purchase of new appliances and other ideas that reduce the amount of electricity used by participating customers .
Greene agrees, “I want a statewide ‘energy efficiency’ policy that allows customers to lower their bills. I want private investments to spend their money in Louisiana on low cost resources rather than customers having to pay for those resources in the utility rate base. “