Gustav costs utilities $600 M

• By MARK BALLARD
• Advocate Capitol News Bureau
• Published: Sep 20, 2008 - Page: 1A - UPDATED: 12:05 a.m.

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The Entergy companies that serve Louisiana and three other states paid up to $600 million to get the lights back on after Hurricane Gustav, Entergy Corp. said in a press release Friday.

Entergy Gulf States LLC, which services the parishes between Baton Rouge and the Texas border, paid between $210 and $250 million, said Renae Conley, president and chief executive of the two Entergy companies serving about 1 million Louisiana customers. Restoration of power for Entergy Louisiana LLC customers cost between $230 million and $270 million.

Entergy subsidiaries in New Orleans, Mississippi and Arkansas accumulated between $60 million and $80 million in expenses.

The costs for Hurricane Ike have not been calculated yet, Conley said Friday in an interview. Entergy will wait for those numbers before asking the state Public Service Commission for permission to get repaid by customers, she said.

The five elected members of the PSC determine what Entergy can charge its customers on monthly bills. State law allows utilities to collect the costs of generating and transmitting electricity.

“We probably won’t go to the commission until we have a better sense of Ike as well,” Conley said.

Though very early in the process, Entergy Gulf States customers ultimately may see a charge similar to one added for hurricanes Katrina and Rita, said Michael Twomey, Entergy’s vice president in charge of regulatory affairs in Louisiana.

Entergy Gulf States set aside $87 million in a storm reserve account, which would leave between $120 million and $160 million for customers to repay for Gustav restoration costs, Twomey said in a Friday interview. Katrina and Rita cost Entergy Gulf States customers about $180 million, he said.

Determining how much to charge customers monthly to repay the restoration expenses from hurricanes Katrina-Rita is complex.

Generally, the Katrina-Rita recovery cost is called “LURC Hurricane Charge” on monthly bills.

That surcharge in September for a typical Baton Rouge residential user buying 1,500 kilowatt hours of electricity is $4.67. Subtracted from that amount are credits Entergy receives for items like depreciation, which is called “Hurricane Offset Charge” on monthly bills and is 51 cents for the typical residential user in September. Therefore, the surcharge for restoring power after hurricanes Katrina and Rita is roughly $4.16 on the September bill.

PSC Commissioner Jimmy Field of Baton Rouge said regulators will review Entergy’s invoices and decide if the expenditures were prudent before any surcharge for Gustav is added. Though money was set aside for a storm contingency, customers eventually will see an increase in their monthly bills because of Gustav, he said.

“It’s very hard to tell the ratepayers that,” Field said in a Friday interview. “But the good news is that it won’t be as expensive as it could have been. I’m glad we had the foresight to set aside a storm recovery fund.”