Docket Nos. ES22-7-000, ES22-8-000
We agree with the Commission’s decision to grant Entergy Louisiana, LLC and Energy New Orleans, LLC’s (collectively, Entergy Operating Companies) requested authorizations to issue and sell securities and assume short-term and long-term obligations and liabilities. We write separately to underscore that this is another clear example of the deep costs of climate change and extreme weather, which will ultimately be borne by customers.
As the Entergy Operating Companies explain, on August 29, 2021, Hurricane Ida made landfall in Louisiana and caused very significant damage to the Entergy Operating Companies’ systems, including damage to more than 30,500 distribution poles; nearly 6,000 transformers; nearly 36,500 spans of distribution wire; approximately 500 transmission structures; more than 225 substations; and more than 210 transmission line.[1] Early estimates to restore and repair their systems already total billions of dollars, causing the Entergy Operating Companies to hit the limit on their existing debt authorizations ahead of term, necessitating that they take the unusual step to renew their authorizations before they expire, and out of cycle with their affiliates.[2] In turn, the Commission is approving the Entergy Operating Companies’ requests, which include authorization to assume up to $14.24 billion in new long-term debt, to ensure that they can finance their repair and restoration costs while continuing to fulfill their duties as public utilities.
These costs, while necessary, will ultimately be borne by customers, and are a direct result of climate change and extreme weather. The Entergy Operating Companies explain that the costs of Hurricane Ida’s damage was greater than the combined quantifiable costs caused by Hurricanes Katrina, Ike, Delta, and Zeta.[3] Furthermore, Hurricane Ida is just one of 18 climate-related disaster events with losses exceeding $1 billion that has affected the United States this year.[4] We expect that restoration costs following climate-induced extreme weather events will continue to grow, and for that reason, the Commission should consider how prudent investments in transmission system planning can ultimately save customers money.
For these reasons, we respectfully concur.
[1] Application 3-5.
[2] Typically, the Entergy Operating Companies file their requests for authorizations contemporaneously with their affiliates, including in their latest requests which were approved on June 29, 2020, for a term ending on July 14, 2022. The Entergy Operating Companies were authorized to issue up to approximately $13 billion in debt.
[3] Application at 4.
[4] NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2021). https://www.ncdc.noaa.gov/billions/, DOI: 10.25921/stkw-7w73.