[Red Stick]

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.

Thank you for that explanation. I am going to assume you are in some way affiliated with Entergy. I applaud you taking the time to explain this the way you did. Hopefully it will help others understand this a little better.

looking at the quotes above makes me wonder. applying the logic that i should not have to pay for someone else (Shreveport vs New Orleans), then explain to me why i have to pay for programs like welfare, medicaid, social security (which evidently won't be around when i retire), etc. the bottom line is that we live in a society where we are sometimes asked to make sacrifices for the greater good. thus, i help fund programs for which i have never partaken of their services nor ever plan to. likewise, make considerable donations to my parish church and other non-profits. a few dollars a year to have the electric grid rebuilt in a matter of weeks seems like a VERY SMALL price to pay. Geezzz, how about if we all stop crying and perhaps buy one less cup of latte a month!!!!

The programs you speak of (welfare, medicaid and social security) are not companies like Entergy. You are comparing apples to oranges here. The difference is that if I was a customer of a particular shipping company that had a fire at one of their terminals and lost alot of equipment, when they attempted a rate increase to make up for lost equipment I could simply start using another shipping company rather than paying their higher rates. That's not the case with this situation. The customers of Entergy only have that option unless they want to move or buy generators. It could be a 1 cent increase but with the monopoly on this service, its forced down your customers throats because they have no choice in the matter.