Statement by Council Utility Committee Chair Helena Moreno

NEW ORLEANS - The New Orleans Power Station (NOPS) may soon be up for further review by the New Orleans City Council. In 2018, the Entergy New Orleans peaking power plant was approved by the previous Council before the paid actor scandal was uncovered. Councilmember Helena Moreno has issued the following statement on the matter:

"I've recently seen some suggest that additional review of the NOPS project is "dumb" but I believe otherwise; this is among the most consequential decisions the Council - as Entergy New Orleans' regulator - has and will make, and therefore as Utilities Chair and Councilmember-at-Large, I have the responsibility to thoroughly review this issue and all utilities decisions to protect and advocate for ratepayers. In this case - especially, in the fog of distrust after the paid actor scandal - I believe it is vital we get this right.

The evidence shows that New Orleans needs a power source to be able to meet peak demand and avoid outages during extreme weather events. While these demand-related outages are rare - unlike those daylight outages caused by our unreliable and poorly-maintained distribution system - they can be devastating to our power system. What was approved by the previous Council to directly address this issue is a 128MW natural gas peaker plant with a self-start capability in New Orleans East at a cost to ratepayers of $210 million.

As we are now aware, during hearings on the NOPS docket, Entergy New Orleans hired a contractor that paid actors to speak in support of the plant. While the City Code indicates public comment is not part of the evidence in utility regulatory proceedings, the Council schedules public hearings when it deems parties should be heard that are not in the official record. Therefore, it is clear that the Council found it important to receive accurate, undistorted, and earnest opinions from the public. As we all know that did not happen.

The paid actor scandal has caused significant mistrust between the Council and Entergy New Orleans. The findings from the Council's independent investigation into the scandal were so egregious that a $5 million fine was imposed on the company by the Council. Entergy's word and assurances are not enough anymore.  I believe the public demands that we, the regulators, thoroughly analyze and methodically review the company's operations and projects. That has led us to demand results on issues ratepayers care about: reliable service; maintaining affordable rates; and driving cleaner, more climate-friendly power. Specifically and to those ends, we've: (1) Rejected Entergy's initial rate filing which contained drastic rate increases in Algiers and an inexplicably generous baseline profit margin (Return on Equity). Thanks to our efforts, Entergy rescinded and refiled their case. (2) Demanded and received expedited deployment of renewable power generation that Entergy had promised years ago. And, (3) Launched an investigation into the direct cause of "clear sky" outages which is Entergy's poorly-maintained distribution and reliability system (the power lines, poles, transformers etc.) - an investigation that may result in further penalties and fines. And that's just to name a few steps.

All of this is reason why the Council should take another look at NOPS. In doing so, however, we must understand the current situation and what's at stake. Over the past several years, NOPS deliberations centered on whether a natural gas plant was the best solution. Now, new dynamics are in play which puts the city and the Council in a different position. The reason? Costs, specifically the significant costs that have already been incurred. New Orleans' ratepayers are on the hook for at least $96 million spent by Entergy since the approval. These costs, which have been verified through invoices, represent an incredibly high 'exit' fee for scrapping NOPS; even if we did scrap the plant, ratepayers would have nothing to show for it except potentially a big bill. If this ship has sailed, and it's too far gone, then I strongly believe and will aggressively fight for modifications and improvements at NOPS. Foremost, there must be cost protections on the plant. It could end up costing twice as much with no repercussions for Entergy and that inflated price tag would be passed on to ratepayers. There must be maintenance guidelines and penalties when deficiencies are found. What's the point of having the plant if it fails when we need it? Technology is changing fast; there should be assurances that the plant can be modified over time as new greener options become less expensive.

Ratepayers will begin bearing the cost of the plant next year and pay for the next 30 years. The easy solution is to do nothing: to ignore the deep mistrust in our communities, the legitimate questions about NOPS' technology and value, and Entergy's own deplorable actions. I'm not for easy solutions. I want what is best for our ratepayers, for our city, and for our future. I work for the people of New Orleans - not a company, or an interest group. The people deserve fair, thorough, and smart approaches to big decisions, particularly since it's their dollars at stake."

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Contact:

Andrew Tuozzolo

Chief of Staff

Office of Councilmember-at-Large Helena Moreno

AVTuozzolo@nola.gov

504.281.9882