Moreno: Entergy Pullout Won’t Stop SWBNO Substation

A water tower featuring the SWBNO logo at the Carrollton Waterworks in New Orleans. Photo by Infrogmation of New Orleans, licensed under CC BY-SA 4.0

Entergy’s move to pull out of a major agreement to provide $30 million for a dedicated substation at the Sewerage & Water Board’s Carrolton Plant won’t stop the substation from moving forward, said New Orleans City Council President Helena Moreno on Monday.

The statement came after reports that Entergy appears to be pulling out of an agreement reached with the city last June to provide $30 million in up-front funding for a dedicated substation at a planned West Power Complex at the SWBNO’s Carrolton Plant. Last week, Mayor Cantrell’s head of infrastructure, Ramsey Green, indicated to the SWB directors that Entergy may pull out of that agreement.

According to Entergy, the financial cost of repairing its own infrastructure following Hurricane Ida is responsible for the possible withdrawal of funding.

“Entergy New Orleans was discussing the unusual step of financing a substation for the S&WB given its financial condition,” Entergy spokeswoman Lee Sabatini said. “Subsequent to those initial negotiations, Hurricane Ida hit Entergy New Orleans’ service area, which further strained the company’s own financial condition by having to fund large amounts of storm costs with uncertainty around the timing and mechanism to recover those costs.”

“If Entergy pulls its money out, do we really want to put $30 million of city money into Entergy’s plan? I just want to review that before the city commits any additional fund into that,” Green said.

According to City Council president Helena Moreno, the answer is yes.

“Entergy’s inability to finance the Sewerage and Water Board doesn’t stop this project because the big difference is that the City now has American Rescue Plan Act (ARPA) dollars in hand,” Moreno said in a Facebook post on Monday night. “Using ARPA funds to pay for the SWBNO substation is now the most straightforward solution to funding this project, and it’s also the cheapest for ratepayers.”

Moreno noted that this solution would also save New Orleans residents money, as the cost of the $30 million construction loan, plus an additional $7 million in interest,  would eventually have been passed on through elevated SWBNO rates citywide. “It is encouraged that ARPA dollars be utilized for infrastructure investments particularly pertaining to water and drainage infrastructure. So here it is,” Moreno stated.

Meanwhile, SWBNO issued a statement saying both they and Entergy remain committed to the substation project – though the change in funding means it will not be ready in time for the 2023 hurricane season as originally planned.

“Sewerage and Water Board and Entergy New Orleans both remain committed to the substation project. While its funding structure is not yet finalized, we are working with our partners to pursue other options for this critical project,” the statement said. “We appreciate Entergy’s ongoing commitment to build, maintain and supply power to SWBNO through the substation no matter the funding source.”

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