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Louisiana utility regulators are accusing Entergy of creating a grid dependent on expensive gas

With Louisiana residents facing unprecedented electric bills, Democrats on the Louisiana Public Service Commission last week blamed the “mess” on Entergy Louisiana, saying the utility giant ignored calls to diversify its fuel sources for power generation.

The commission called Entergy Louisiana executives to discuss the issue at Wednesday’s meeting. Commission chairman Lambert Boissiere, D-New Orleans, said his office received several hundred calls last month from residents complaining about high bills.

“It’s hard to keep up with our small staff,” Boissiere said. “And people are frustrated, so please excuse me if you also notice frustration in my voice, but if I understand it, I have to turn around and give it to you when I get here, because we are all people have.”

Commission Executive Director Brandon Frey explained that a surge in natural gas prices, caused by a lack of shale drilling and more overseas exports, is driving high electricity bills.

Boissiere and Commissioner Foster Campbell, D-Shreveport, accused Entergy Louisiana of creating a grid overly dependent on natural gas and of opposing investment in renewable energy. According to Campbell, the company’s electricity generation currently consists of about 85% natural gas and 3% renewable energy.

“I had to go to people and try to downplay it: I’d say, ‘Entergy doesn’t like solar until they figure out how to own the sun,’” Boissiere said. “The beauty of the sun is that nobody owns it and it shouldn’t be a global commodity because a war in Ukraine won’t affect sun prices.”

According to Campbell, Entergy executives have also resisted paying customers fair market value for solar energy they feed into the grid.

“We’re in a hell of a mess now because if we had practiced with some renewable energy 10 years ago, we would have been better off,” Campbell said. “But we found reasons not to have renewable energy … They got your dukes up like that instead of saying, ‘Come on in.’”

Entergy Louisiana CEO Phillip May disagreed, saying the price of solar energy wasn’t as low 10 years ago as it is today.

“If we had solar now at the price solar is now, yes our bills would be lower,” May said have seen a dramatic drop in solar prices.”

But the Democrats on the commission didn’t buy that argument. Boissiere, who has held the post for nearly two decades, said Entergy fights against even small investments in renewable energy.

“We talked about putting our toe in the water and diversifying a bit,” Boissiere said. “I’m sure the other fuels in Louisiana weren’t the absolute cheapest either when we looked at them.”

Simon Mahan, executive director of the Southern Renewable Energy Association, said five years ago it was common knowledge that renewable energy was fast becoming more affordable than fossil fuels.

“Entergy failed to start diversifying its energy resources half a decade ago to avoid huge bills today,” Mahan said. “We already knew that renewable energy prices would continue to fall. Renewable projects take time to get online. Had Entergy planned to add more renewable energy five years ago, they would be online or coming online now, with lower prices than today.”

Five years ago, Mahan was involved with Entergy Louisiana’s Integrated Resource Planning (IRP) – a mandatory process that utility companies regularly undertake to forecast their customers’ future energy needs and to look for the best and most affordable energy sources. During this process, he informed the Commission that Entergy had failed to conduct meaningful assessments of renewable energy sources, which contradicted the company’s own sustainability goals.

“While the rest of the country’s electric power industry is embracing renewable energy sources, ELL’s process resulted in an outcome where the company planned to do nothing for the next five years,” Mahan wrote at the time.

Entergy has recently started to switch to renewable energy. May said the utility currently has 475 megawatts of solar power awaiting commission approval for commissioning, another 600 megawatts behind it, and another 1,500-megawatt bid the company just opened up for bidding.

Other energy companies operating in Louisiana are also investing in renewable energy. Cleco has begun purchasing solar power from an outside power generation company in the state, and Southwestern Electric Power Company signed an agreement in 2020 to begin importing wind power from Oklahoma.

Commissioner Eric Skrmetta, R-Metairie, a frequent defender of Entergy, pointed out that MISO Energy, the multi-state organization that runs Louisiana’s power grid, is only about 1.3% solar.

While MISO’s solar resources are small, its overall renewable energy share, which includes 13% wind power, is much larger than that of Entergy Louisiana.

“There has to be a balance of interests here to ensure that the power is reliable and deliverable,” Skrmetta said.

While some commissioners blamed Entergy for the problem, a proponent said the commission also bore responsibility.

Logan Burke, executive director of the Alliance for Affordable Energy, said the commission has never really championed renewable energy. Burke spoke before the commission on Wednesday and later spoke to the illuminator.

“The Commission just never took the action needed to move away from fossil fuels and that’s why we’re here,” she said.

The energy industry knew years ago that renewable energy would become the cheapest source of energy, but the commission approved four new natural gas power plants in Louisiana over the course of four years, Burke said.

For customers currently struggling to pay high utility bills, Entergy waives both late fees and credit card fees and has donated $10 million to a fund that helps certain low-income customers pay their bills. The company also allows deferred payments so customers can pay off their bills in smaller increments over time, May said.

May said Entergy will not separate anyone who contacts the company for a payment plan.

Despite the summer heat, the commission chose not to adopt a moratorium on disconnections for overdue customers. The commissioners already have a policy that suspends outages in communities where the National Weather Service has issued an excessive heat warning.

However, Burke said those steps are not enough. She said an excessive heat warning often only lasts a day or two, after which utilities can resume disruptions. She also said she’s heard from many residents who are unable to reach Entergy by phone or who are on hold for long periods of time.

“We take calls from people who can’t reach Entergy or who are on hold for an extended period of time,” Burke said. “Maybe it could work if Entergy had thousands of customer service representatives answering calls.”

Boissiere asked Entergy to develop another plan specifically to help seniors and fixed-income customers who are struggling to pay their bills.