NEW ORLEANS UTILITY: PROBLEM OR SOLUTION?

In New Orleans, it seems the obstacle might be the utility. At the very least, some argue, Entergy New Orleans (ENO) could do more. Bearing burdens most of the rest of the country does not have to, New Orleans residents with means are being offered an opportunity by ENO to make a contribution toward the energy infrastructure of tomorrow - but that infrastructure is not in Louisiana. Is that the best offer ENO has?

Entergy New Orleans is offering to sell credits to its power customers. The credits will add anywhere from 1 cent to 10 cents per kilowatt-hour to New Orleans utility bills.

Morgan Stewart, spokesman, ENO: “A more affluent economy might not feel the pinch as much of a higher cost, whereas we do.”

ENO claims the economics of the region prevents them from moving away from the fossil fuels they rely on. And Louisiana does not at present have New Energy development in which they can invest. The credits will be invested in the Texas New Energy boom.

ENO says it is a step in a positive direction. New Orleans residents are not so sure.

John Atkeison, director of climate and clean energy programs, New Orleans’ Alliance for Affordable Energy: “The program calls for selling people renewable energy credits, not renewable energy… it’s kind of like paying Whole Foods prices for someone somewhere else to eat organic…It’s our suspicion that Entergy is proposing this simply as a way to head off something more serious. We need more green power. We need it desperately and Entergy is standing in the way.”

Louisiana does not have a Renewable Electricity Standard (RES) requiring ENO and other utilities to obtain a specific portion of their power from New Energy sources. ENO sees the credit sales as a way to head off such a law. The credits would give New Orleans residents the choice to participate in building a New Energy infrastructure - even if it is in Texas. An RES, ENO contends, would inevitably lead to higher electricity rates.

The Louisiana Public Service Commission agrees with ENO.

New Energy producers and advocates disagree. They say an RES would lead to market parity for New Energy because ENO would be required to buy it and therefore could sell it instead of just selling credits. With ENO selling Louisiana-generated electricity from New Energy sources, the state's infrastructure would be developed. State and local jobs and tax revenues would follow. Market-competive rates would emerge with economies of scale and the coming price on the greenhouse gas emissions from traditional fossil fuel sources.

Wind Energy Systems Technology wanted to develop the state’s enormous offshore wind energy resources but found no interest in such development without an RES driving companies like ENO to buy their output. So they moved to Texas. Harold Schoeffler, co-founder, Wind Energy Systems Technology: “In Texas, we can sell the power…We can’t in Louisiana.”

click to enlarge

Entergy pitches renewable energy credits, not sources; Customers can buy credits to support efforts in other areas
Emilie Bahr, June 16, 2008 (New Orleans City Business)

WHO
Entergy New Orleans (ENO) (Morgan Stewart, spokesman); Alliance for Affordable Energy (John Atkeison, director of climate and clean energy programs)

WHAT
Entergy does not see the development of New Energy in the current Louisiana economy but wants to offer New Orleans residents the opportunity to offset their greenhouse gas emissions (GhG) by purchasing credits for New Energy generated in installations outside the state.

Click for more about New Energy in New Orleans.

WHEN
Stewart estimates ENO could begin selling offset credits by October 2008 is the public and the New Orleans City Council approve.

WHERE
Texas, with its booming wind energy industry, is in a position to use credits purchased by New Orleans residents to build New Energy.

WHY
- Entergy says credits purchased in New Orleans would go to a variety of New Energy projects including wind, solar and biofuels.
- Opponents say the credits do nothing to lower local GhG emissions or build Louisiana’s New Energy infrastructure.
- ENO will sell credits to residential customers in 500 kilowatt-hour (kW-h) blocks and to commercial ratepayers in 1,000 kW-h blocks. Both kinds of customers can buy as many blocks of credits as they want.
- Credits will cost $7.50 to $10 per 500 kW-h.
- Because economic factors prevent ENO from shifting from fossil fuel consumption or developing New Energy resources locally, the only thing the credit purchases would accomplish would be to provide funds for investment in New Energy elsewhere.

Another gathering at the Superdome about another potential New Orleans disaster: Entergy wants to build another dirty coal plant instead of New Energy. (click to enlarge)

QUOTES
Morgan Stewart, spokesman, ENO: “If you decide to sign up for it, what we would do is buy a credit from a company that creates power from a renewable source…That does a couple things. No. 1, it helps the people who are generating renewable power find a market for their product…And No. 2, it helps this area benefit from and assist in the creation of renewable power sources.”