Rewarding Criminal Behavior

Report disputes utility increase request
Advisers take issue with Entergy charges
Saturday, September 23, 2006
By Pam Radtke Russell

Entergy New Orleans incorrectly charged customers for items including income taxes it didn't pay and expenses tied to stock options in seeking an increase in electric rates, according to City Council advisers. As a result, advisers recommend allowing the utility a smaller increase than it has requested, an increase that should be paid for in part by parent company Entergy Corp., according to the advisers.

The recommendations were made late Thursday after advisers spent more than three months analyzing the request by Entergy New Orleans.

After scrutinizing the company's proposal to raise electric rates, Legend Consulting Group found $88 million in charges that Entergy shouldn't be allowed to pass on to customers. If those charges were eliminated, rates would go down by 44 percent.

The advisers, acknowledging the utility can't operate with such a decrease, used a different method to come up with a recommended increase of 18 percent, as opposed to the 22.2 percent increase Entergy requested. The advisers also recommended the company be allowed to raise gas rates 11 percent, compared to the 18 percent increase requested by Entergy.

Wow! Way to go, advisors. Stick it to 'em.

Update: Oy! David has a few pertinent related observations