The Port Arthur News
PORT ARTHUR —
Entergy has a history of asking for a lot when it deserves only a fraction of what the utility was requesting, according to the outcomes of Entergy’s most recent rate cases. That history does not give us confidence in Entergy’s request that some new costs be passed on to customers without going through the rate case process.
In its most recent rate case, filed in 2009, Entergy asked for an additional $212 from its customers. After the request was subjected to the scrutiny of the rate case process, the utility was granted $68 million, less than one-third of what it had requested. In a rate case filed in 2007, Entergy wanted an additional $112 million from customers but was granted a $28 million increase, one-fourth of what it was seeking.
Entergy filed a plan on Monday with the Texas Public Utilities Commission, the agency that regulates electric utilities in Texas, that would allow the Entergy to collect an additional $112 million per year in revenue — every year. That amounts to an extra $14.37 on the average monthly 1,000 kilowatt-hour residential bill. Multiply that by 12 months and the average customer is looking at another $169 per year on their electric bill. Attorney Dan Lawton, who represents local cities in rate cases with Entergy, wryly commented that was about like adding a 13th electric bill to households every year.
The “plan” filed with the PUC on Monday is not a rate case. It is a plan that would allow Entergy to collect the additional revenues without going through the rate case process. Entergy said it spent $261.8 to complete transmission and distribution capital projects from July 2007 to June 2009. It says it plans to invest an additional $664 million in its Texas service territory over the next three years.
Entergy also says it wants to be able to pass along the cost of purchasing electricity on the wholesale market without having to go through the rate case process. Entergy purchases power generated by other utilities or even industry that generates excess electrical capacity and resells it to its customers. The ability for utilities to buy and sell power on the wholesale market increases efficiency by allowing utilities to buy the cheapest electricity available, even if it is not generated by one of their own power plants.
Currently, the cost of electricity purchased by Entergy on the open market and distributed to its customers is recovered through base rate increases. Entergy says this makes it necessary to file rate cases more frequently and the cost of rate cases is not cheap. Entergy says rate cases cost about $12.5 million.
We are in no position to determine if the money Entergy spent on transmission and distribution capital investments over the past three years was prudent. Nor can we determine whether the plan to spend $664 million more over the next three years is necessary. And we’re not ready to give Entergy a blank check to buy electricity on the open market. What we do know is that local customers will have a difficult time absorbing a “13th electric bill” every year, and someone needs to be watching out for their best interest.
That’s why we feel strongly that regulatory oversight is needed. The best oversight we know of is for Entergy to make its best case, and the legal representatives for the customers to make their best case and then for the PUC commissioners to make the decision on what’s best for the customers and fair to Entergy. It’s true that it is an expensive process, but it’s the best process we have to make sure that we keep the lights on at the lowest possible cost.