The utilities are legally entitled to recover the cost of restoring service after hurricanes from customers. The companies paid more than $700 million in late 2005 and 2006 to restore the electric system after Katrina and Rita. Customers of Gulf States are not paying for restoration work in New Orleans. The customers of each company are paying for the restoration work done by that company (Gulf States customers are paying for the work done in Lake Charles, Baton Rouge, etc. and Entergy Louisiana customers are paying for the work done in its territory). After Hurricane Andrew in 1992, utilities could not get cost-effective insurance for the type of damage caused by hurricanes. On the issue of "setting aside" money for storms, the companies were doing that. Unfortunately, Katrina and Rita costs almost immediately exhausted those funds. Part of the small rate increase approved yesterday is to set aside $250 million for future storms. What the radio host doesn't understand is that regulated utilities charge their customers only the cost to provide service plus a limited profit set by the PSC. As costs increase, the rates increase (but the profits of the utility do not). One of the confusing points about Entergy is that its parent company is involved in non-regulated businesses (such as nuclear plants in New England). Those non-regulated businesses generate profits that are not related to the utility business in Louisiana. On the other hand, if there are losses in the non-regulated businesses, then Louisiana customers are not on the hook for those losses.