BATON ROUGE, La. — Entergy Corp. received permission Wednesday from state regulators to charge Louisiana customers for $408 million in storm damage from hurricanes Gustav and Ike and for replenishment of $290 million in storm reserves.
Entergy will sell bonds to get upfront cash, and that debt will be paid off through surcharges on customers’ bills.
Entergy Louisiana customers will see an estimated increase of $2.44 per 1,000 kilowatt hours, while Entergy Gulf States Louisiana customers will pay an additional $1.93 per 1,000 kilowatt hours, Entergy said.
The Public Service Commission approved the measure in a 4-1 vote Wednesday. Commissioner Clyde Holloway voted against the measure.
Entergy Louisiana will receive $260 million to cover storm costs and another $200 million to refill its storm reserve. Entergy Gulf States Louisiana will receive $148.4 million for storm costs and another $90 million for its storm reserve.
Revenue bonds were also used to pay for damage from hurricanes Katrina and Rita. Customers of the two Entergy units are paying about $1 billion over 10 years for damage from the 2005 storms.
Affordable insurance for repairing the power grid has not been available since Hurricane Andrew battered Florida in 1991, so many states now issue bonds to cover storm repairs, said Paul Zimmering, special counsel for Entergy.
Zimmering estimated that using bonds rather than other types of financing would save ratepayers $43.2 million.
While voting for the measure, Commissioner Foster Campbell said he wanted to know how much it would cost to insure the transmission and distribution grid.
“If there’s any way to buy insurance, we should do it,” Campbell said.
Entergy Louisiana and Entergy Gulf States Louisiana together serve around 1.1 million customers in the state. About 829,000 customers experienced outages during Gustav, which struck Sept. 1, 2008, and 141,378 customers during Ike, which made landfall 13 days later.