In two transactions led and championed by the Louisiana Public Service Commission and representing only the second transaction of this kind, the LPSC, the Louisiana Utilities Restoration Corporation (LURC), and the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) authorized and issued $713 million of bonds. The weighted average interest rates of approximately 3.34% for these Ratepayer-Backed Bonds are the lowest ever in this $40 billion asset class. The bond proceeds were used to finance non-shareholder capital contributions to Entergy Louisiana, LLC (ELL) and Entergy Gulf States Louisiana, L.L.C. (EGSL) related to ELL’s and EGSL’s damages in Louisiana from Hurricanes Gustav and Ike in 2008, and replenish storm reserves for protection against future storms. The savings to LPSC-jurisdictional ratepayers from this financing structure, as compared to conventional methods of financing the storm costs, is estimated to be at least $275 million in the aggregate. ELL and EGSL are both utility subsidiaries of Entergy Corporation, which is headquartered in New Orleans.
Other items up for for vote included:
- A motion by Commissioner Holloway for the legal staff of the LPSC to move forward in handling a merger with Centurylink and Qwest. The merger will make Centurylink ( a Louisiana business-headquartered in Monroe) the third largest phone company in the United States.
- Approval was granted for Entergy request for a waiver that will assist in the expedition of companies to submit proposals/bids for renewable energy. The renewable must be sourced and generated in Louisiana.
(Background-at the June meeting a renewable energy initiative by Commissioner Holloway was passed unanimously. This initiative is seeking 350 megawatts of renewable energy to be purchased by utility companies. Some examples of Louisiana based/generated renewable include: biomass produced from agricultural crops and timber, geothermal energy, hydrokinetics as well as waste heat recovery, landfill waste, wind and solar
There are two major components of the renewable initiative. Under this plan, Louisiana utility companies will seek proposals from businesses creating renewable power or supplying renewable sources of fuel. A central feature of the new initiative is the right of the Commission to reject proposals that will unnecessarily increase utility costs. Holloway stated, “We expect new businesses to be created in Louisiana as well as growth of existing facilities.”
In the second major component of the initiative passed in June, utility companies will conduct research to identify new, innovative and cost effective sources of renewable energy in Louisiana. (For example, Cleco will house a facility in the Crowley/Eunice area to conduct research.)
- The approval of Entergy’s request for cost recovery of federal mandates and the Nuclear Regulatory Commission requirements for sufficiently funding the decommissioning of nuclear plants (River Bend and Waterford 3).