Entergy’s $285 Million Proposal Sparks Debate
Entergy New Orleans has proposed selling its gas business to Delta States Utilities, an affiliate of Bernhard Capital Partners, for $285 million, sparking concerns among utility advisers and residents. The sale is part of a broader operational shift by Entergy Corp., which claims the move will enhance service for ratepayers. However, the City Council’s utility consultants and other critics worry about potential financial impacts, including a possible $12 monthly increase in gas bills for city residents.
Consultants from Legend Consulting Group and Dentons, representing the City Council, argue that the deal could impose significant harm on ratepayers, potentially raising electricity rates alongside gas bills. They point to uncertainties surrounding Delta States Utilities’ startup costs, which remain uncapped. “This proposal imposes quantifiable harm on both future gas customers and Entergy New Orleans (ENO) electric customers,” wrote the advisers.
In response, Delta States Utilities has countered these claims, stating that any potential rate hikes would likely be minimal—less than $2 a month—and wouldn’t occur until nearly 18 months after the sale. They also highlighted that any increases would support necessary investments, such as information technology upgrades and a new corporate office.
Critics Raise Environmental and Financial Concerns
The proposed sale has also faced pushback from Mayor LaToya Cantrell’s office and environmental advocates, who argue it contradicts New Orleans’ commitment to transitioning away from fossil fuels. Greg Nichols, director of the Office of Resilience and Sustainability, criticized the move, stating, “The growth of a natural gas market is intrinsic to the success of [Bernhard],” suggesting the deal might lock the city into reliance on natural gas for years to come.
Utility advisers have recommended that the City Council, which regulates Entergy New Orleans, demand stronger commitments from Delta States Utilities to mitigate potential harm to ratepayers. Specifically, they suggest imposing conditions to cap startup costs and eliminate or reduce the financial impact on residents.
Meanwhile, Entergy officials, including CEO Deanna Rodriguez, remain optimistic about the proposal. Rodriguez emphasized that the sale would bring clear benefits, including improved service, job creation, and no additional burden on ratepayers. “We are confident the council will approve this proposal by year-end, enabling these advantages to take effect,” she stated.
What Lies Ahead for New Orleans Ratepayers
As the City Council prepares to vote on the sale in the coming months, the future of residents’ gas bills remains uncertain. The council members, who declined to comment last week, will need to weigh the potential benefits of the sale—such as enhanced service and infrastructure investments—against the risk of rate hikes and increased dependence on natural gas.
Delta States Utilities has assured that ratepayers would see tangible returns for any financial support they provide through investments in infrastructure and operational improvements. However, critics argue that these benefits must not come at the expense of affordability or the city’s climate goals.
The outcome of the council’s decision could have long-lasting implications for New Orleans’ energy landscape, impacting residents’ wallets and the city’s broader sustainability efforts.
