Print
E-mail
Comment
Entergy customers: another storm surcharge
By Howard Roden
The storm has passed. Now the bill comes due – again.
Three years after Hurricane Rita, Entergy Texas customers in Montgomery County are faced with paying for the repairs from another monster storm. While officials with the Beaumont-based utility have not released estimates on the restoration associated with Hurricane Ike (those numbers are expected this week), it’s a safe assumption residential customers will be paying another recovery surcharge similar to the one already on their monthly bills.
Last year, Entergy Texas got the green light to recoup $381 million spent repairing its power grid in the wake of Rita. Based on monthly usage of 1,000 kilowatt hours, the increase averages $3.96 a month per customer over a 15-year period.
“Based on the historical experience from Rita, you could say the benchmark is somewhere between $2 to $4 (a month),” said Dave Caplan, Entergy Texas’ manager of corporate communications. “But it’s very difficult to know exactly what that final number will be. Invoices won’t come in for weeks, and the (repair) process was very labor intensive. We wanted to get the power back on as quickly as possible.”
With a region-wide workforce that topped 9,000, Entergy Texas restored power to the majority of its 395,000 customers within a matter of days. Full restoration was finished 12 days after Ike made landfall – well ahead of the company’s initial timetable.
“That could even lower the (repair) costs,” Caplan said.
But now that a second catastrophic storm in the past three years has raked the upper Gulf Coast in Texas, utility customers and local lawmakers are starting to wonder what is the better approach in anticipation of another major storm:
Strengthen the transmission and distribution systems within financial reason and have utility customers continue to pay the recovery surcharges should another hurricane strike; or
Invest in a massive “hardening” of the power grid that might make it virtually impregnable to storms like Rita and Ike – but at a substantial cost to consumers.
Anna and Michael Davis are retired petroleum engineers who live in The Woodlands. Without power for four days, Anna said they were not overly inconvenienced by Ike, but she sees both sides of the issue.
“I have mixed feelings,” she said. “I don’t want to pay for this, obviously, but we’ve got to find a better way to protect ourselves. If this is going to start happening every year, we can’t be adding $4 to our electric bills every year.
“We need to develop some long-term plan. I do believe the utilities should be allowed to be profitable. All other industries pass their costs along to the consumer. But if we keep paying restoration fees, it’s going to become a burden a lot of people can’t handle,” she said.
State Rep. Brandon Creighton, R-Conroe, and state Sen. Robert Nichols, R-Jacksonville, agree that a financial balance must be struck that involves improvements to electrical service in Montgomery County.
“If you go in and put in steel and concrete poles, the cost is substantial and the public ends up paying for it,” Nichols said. “Let’s look at ways to bring the power up quicker.”
Creighton said the state Legislature will “look closely” at storm preparedness when lawmakers begin their 81st session the first week of January.
“I would look for that to be a high priority,” he said. “We would be remiss in not doing that.”
Entergy Texas President and CEO Joe Domino said the company has conducted economic evaluations on the benefits of massive improvements to its power system and has, for the most part, found it lacking.
Caplan said one example is the $1.1 billion Entergy Texas estimates it would cost to replace existing wood transmission structures all at once with steel or reinforced concrete.
“It wouldn’t double the customers’ base rate, but it would have a significant impact on what customers pay,” he said.
Placing distribution lines underground – which has been done in most of The Woodlands – is another popular method to improve a power grid’s reliability. But even the Florida Public Service Commission, which oversees the state’s five investor-owned utilities, doesn’t mandate underground utilities, although the commission implemented a number of sweeping changes to strengthen its power grid after the state was pounded by a series of storms in 2004 and 2005.
Industry experts generally consider the cost of underground utilities to be 10 times that of aboveground systems.
“We don’t believe in a one-fits-all approach,” FPSC spokeswoman Kirsten Olsen said. “One of our mandates is the need to keep things affordable. We want to storm harden as much as we can, but at reasonable cost. There is a tradeoff.”
Florida’s changes include a vegetation program, a wooden pole inspection process and the continual upgrade of existing transmission structures.
Some of Entergy Texas’ existing steel structures are decades old. When replaced, the new structures are engineered in excess of today’s national standards for wind tolerance, Caplan said.
In addition to the recovery surcharge, it is likely Entergy Texas customers will see a hike in their base rate as soon as November if the Public Utilities Commission of Texas grants Entergy Texas’ rate request.
Currently at a monthly average of $43.76, the residential rate would climb an average of $1 for a year, then increase $2 or $3 over the next two years.
If approved, the rate increase would be Entergy Texas’ first in well over a decade. Caplan said the increase would allow the company to recover some $600 million in improvements it made from 1999 to 2006.
Three years after Hurricane Rita, Entergy Texas customers in Montgomery County are faced with paying for the repairs from another monster storm. While officials with the Beaumont-based utility have not released estimates on the restoration associated with Hurricane Ike (those numbers are expected this week), it’s a safe assumption residential customers will be paying another recovery surcharge similar to the one already on their monthly bills.
Last year, Entergy Texas got the green light to recoup $381 million spent repairing its power grid in the wake of Rita. Based on monthly usage of 1,000 kilowatt hours, the increase averages $3.96 a month per customer over a 15-year period.
“Based on the historical experience from Rita, you could say the benchmark is somewhere between $2 to $4 (a month),” said Dave Caplan, Entergy Texas’ manager of corporate communications. “But it’s very difficult to know exactly what that final number will be. Invoices won’t come in for weeks, and the (repair) process was very labor intensive. We wanted to get the power back on as quickly as possible.”
With a region-wide workforce that topped 9,000, Entergy Texas restored power to the majority of its 395,000 customers within a matter of days. Full restoration was finished 12 days after Ike made landfall – well ahead of the company’s initial timetable.
“That could even lower the (repair) costs,” Caplan said.
But now that a second catastrophic storm in the past three years has raked the upper Gulf Coast in Texas, utility customers and local lawmakers are starting to wonder what is the better approach in anticipation of another major storm:
Strengthen the transmission and distribution systems within financial reason and have utility customers continue to pay the recovery surcharges should another hurricane strike; or
Invest in a massive “hardening” of the power grid that might make it virtually impregnable to storms like Rita and Ike – but at a substantial cost to consumers.
Anna and Michael Davis are retired petroleum engineers who live in The Woodlands. Without power for four days, Anna said they were not overly inconvenienced by Ike, but she sees both sides of the issue.
“I have mixed feelings,” she said. “I don’t want to pay for this, obviously, but we’ve got to find a better way to protect ourselves. If this is going to start happening every year, we can’t be adding $4 to our electric bills every year.
“We need to develop some long-term plan. I do believe the utilities should be allowed to be profitable. All other industries pass their costs along to the consumer. But if we keep paying restoration fees, it’s going to become a burden a lot of people can’t handle,” she said.
State Rep. Brandon Creighton, R-Conroe, and state Sen. Robert Nichols, R-Jacksonville, agree that a financial balance must be struck that involves improvements to electrical service in Montgomery County.
“If you go in and put in steel and concrete poles, the cost is substantial and the public ends up paying for it,” Nichols said. “Let’s look at ways to bring the power up quicker.”
Creighton said the state Legislature will “look closely” at storm preparedness when lawmakers begin their 81st session the first week of January.
“I would look for that to be a high priority,” he said. “We would be remiss in not doing that.”
Entergy Texas President and CEO Joe Domino said the company has conducted economic evaluations on the benefits of massive improvements to its power system and has, for the most part, found it lacking.
Caplan said one example is the $1.1 billion Entergy Texas estimates it would cost to replace existing wood transmission structures all at once with steel or reinforced concrete.
“It wouldn’t double the customers’ base rate, but it would have a significant impact on what customers pay,” he said.
Placing distribution lines underground – which has been done in most of The Woodlands – is another popular method to improve a power grid’s reliability. But even the Florida Public Service Commission, which oversees the state’s five investor-owned utilities, doesn’t mandate underground utilities, although the commission implemented a number of sweeping changes to strengthen its power grid after the state was pounded by a series of storms in 2004 and 2005.
Industry experts generally consider the cost of underground utilities to be 10 times that of aboveground systems.
“We don’t believe in a one-fits-all approach,” FPSC spokeswoman Kirsten Olsen said. “One of our mandates is the need to keep things affordable. We want to storm harden as much as we can, but at reasonable cost. There is a tradeoff.”
Florida’s changes include a vegetation program, a wooden pole inspection process and the continual upgrade of existing transmission structures.
Some of Entergy Texas’ existing steel structures are decades old. When replaced, the new structures are engineered in excess of today’s national standards for wind tolerance, Caplan said.
In addition to the recovery surcharge, it is likely Entergy Texas customers will see a hike in their base rate as soon as November if the Public Utilities Commission of Texas grants Entergy Texas’ rate request.
Currently at a monthly average of $43.76, the residential rate would climb an average of $1 for a year, then increase $2 or $3 over the next two years.
If approved, the rate increase would be Entergy Texas’ first in well over a decade. Caplan said the increase would allow the company to recover some $600 million in improvements it made from 1999 to 2006.
Submit a Comment
|
You must be logged in to post a comment.
|
Not yet a registered member?
Click here to become one. Comments to stories and articles on the Web site are not edited or pre-approved before appearing online. Readers posting comments are solely responsible for those comments. Comments must be germane to the story to which they apply. Online comments that are libelous, profane or personally attack another site participant can be reported as abuse using the link provided on each comment. Comments reported as abusive will be reviewed and may be removed from view, as will off-topic comments. BE CIVIL. Individuals continually posting abusive comments to the site may have their registrations revoked. |
Reader Comments
CherokeeToo wrote on Sep 28, 2008 6:51 AM:
" On point observation daffy~~so if the muddled numbers show a calculation of $2-$4 increase the real numbers for those of us in realityworld will be $8-$12 and where is the economy right now???? With some of us getting our hours cut, it will become even harder to pay the $200.00 electric bill each month! And where is the logic in the statement that they haven't raised their rates in "well over a decade"? when we are paying a surcharge for "recovery" of Rita??????? I love the way they stickit to us with the flowery terms!! What is next?!?!?!?! "
lynard wrote on Sep 28, 2008 8:49 AM:
" I for one have seen my bill go up over the last year and a half that I have been in Conroe! My electric bill for my house here (2600 sqft) is more than my electric bill from my house in Sugar Land (3400 sqft)! And the house in Sugar Land was a two story home, with two AC units! We need deregulation here in Conroe like they have in other patrs of Texas. I'm sure that with some sort of competition Entergy would be inclined to lower their rates. Customer service stinks with this company also! They are SUCH jerks on the phone when you call them, because they know you have no other choice so they think they can treat people as they wish. Just another example of a big company giving the shaft to the little guy just because they can. "
JewelsofTexas wrote on Sep 28, 2008 10:00 AM:
" I have Sam Houston Elec Co-op (SHECO) but i too pay a "delivery" charge for Rita. And i'm sure all 266,000 of their customers will pay extra for Ike. We have no other choice in this area but SHECO.
Average bill of 43.76??? thats not possible. Nobody has a bill THAT small. They make is sound small....2.00 a month when they know if will be much more than that. "
Average bill of 43.76??? thats not possible. Nobody has a bill THAT small. They make is sound small....2.00 a month when they know if will be much more than that. "
Boadicea wrote on Sep 28, 2008 10:33 AM:
" daffyduck153 wrote on Sep 28, 2008 5:53 AM:
" I want to know where the average bill is $43.76."..... Hey that's probably for a 10x12 shed :-p
All I have to say to the rate increase is...BOHICA!!!!! "
" I want to know where the average bill is $43.76."..... Hey that's probably for a 10x12 shed :-p
All I have to say to the rate increase is...BOHICA!!!!! "
Whiskyecho wrote on Sep 28, 2008 10:58 AM:
" Who needs a rate increase when a "fuel surcharge" covers anything one would want it to cover ? "
Whiskyecho wrote on Sep 29, 2008 6:24 AM:
" guess Leonard, the entergy ceo, needs a pay raise (from his $5.6 mil) - see here:
http://www.forbes.com/lists/2006/12/WPIV.html
(see what a Master's will do for ya..?) "
http://www.forbes.com/lists/2006/12/WPIV.html
(see what a Master's will do for ya..?) "
gottago3 wrote on Sep 29, 2008 8:02 AM:
" What about insurance? Don't utility companies have some type of coverage? If they don't, shouldn't they? Is there some legal reason that precludes utility companies from getting insurance? "
mdonn wrote on Sep 29, 2008 10:06 AM:
" Nelda Luce Blair was appointed to the University of Houston System Board of Regents by Gov. Rick Perry and will serve through August 31, 2013. She is the president and owner of the Blair Law Firm, PC. She serves as chairman of the Board of Directors of The Woodlands Township and The Woodlands Convention & Visitors Bureau as well as past chairman of the board and current board member of South Montgomery County/Woodlands Chamber of Commerce. She is President of the Conroe ISD Education Foundation, Inc. and a member of the Board of Directors for Associated Republicans of Texas and the Center for Houston’s Future.
She serves on the Advisory Board for Entergy Texas
and the George W. Truett Theological Seminary at Baylor University.
Ever notice that the same kind of people sit on all the get the citizens money boards.
Enetregy has Nelda Blair the appointed queen of TW who can't pay Houston because we spent all the money on benefits for biz and The Developer.
Kind of like the bailout. These people treat themsleves to all kinds of perks at our expense and when it goes bad, they want us to bail them out as they take a golden parachute and leave.
When Blair was appointed to the U of H board she immediately raised tutition. She now wants to sell bonds to pay Houston because they spent all the money, only bonds are worthless because of the same type of rich individuals who run the banks and mortgage companies.
But whose fault is it?
It's ours because we let the Kool Aid drinkers elect these people to positions in which they appoint their freinds and relatives to the advisory boards.
So how do the Kool Aid drinkers pull it off?
They suceed because most of us sit home and Bit$$ about what is going on without doing something about it like getting off our dead A&& and voting.
You want change? Get to the polls and make change.
http://bustcorruptionthewoodlands.blogspot.com/
"All that is necessary for the triumph of evil is that good men do nothing." (Edmund Burke) "
She serves on the Advisory Board for Entergy Texas
and the George W. Truett Theological Seminary at Baylor University.
Ever notice that the same kind of people sit on all the get the citizens money boards.
Enetregy has Nelda Blair the appointed queen of TW who can't pay Houston because we spent all the money on benefits for biz and The Developer.
Kind of like the bailout. These people treat themsleves to all kinds of perks at our expense and when it goes bad, they want us to bail them out as they take a golden parachute and leave.
When Blair was appointed to the U of H board she immediately raised tutition. She now wants to sell bonds to pay Houston because they spent all the money, only bonds are worthless because of the same type of rich individuals who run the banks and mortgage companies.
But whose fault is it?
It's ours because we let the Kool Aid drinkers elect these people to positions in which they appoint their freinds and relatives to the advisory boards.
So how do the Kool Aid drinkers pull it off?
They suceed because most of us sit home and Bit$$ about what is going on without doing something about it like getting off our dead A&& and voting.
You want change? Get to the polls and make change.
http://bustcorruptionthewoodlands.blogspot.com/
"All that is necessary for the triumph of evil is that good men do nothing." (Edmund Burke) "
perse wrote on Sep 29, 2008 10:37 AM:
" And average bill of less than $45 means an average usage of less than 300 KWH -- for what, a pup tent in the woods?
But that obvious misstatement aside, deregulation may not be an unmixed blessing the way it is set up in Texas, but surely we should be able to get a lower rate than what most of us are being forced to pay now. Still, our customer service is pretty much going to be unchanged no matter what provider you use if you have to continue to use the same delivery company for the actual electric line distribution network. "
But that obvious misstatement aside, deregulation may not be an unmixed blessing the way it is set up in Texas, but surely we should be able to get a lower rate than what most of us are being forced to pay now. Still, our customer service is pretty much going to be unchanged no matter what provider you use if you have to continue to use the same delivery company for the actual electric line distribution network. "
daffyduck153 wrote on Sep 28, 2008 5:53 AM:
The bill for my one bedroom apt. is four times that. "