In wake of devastating storms, Entergy proposes $9.6 billion plan to harden Louisiana's grid

After hurricanes battered Louisiana's electric grid in 2020 and 2021, Entergy Louisiana is proposing a $9.6 billion grid-hardening plan that is aimed at getting the lights back on faster in the face of increasingly intense storms.

The 10-year plan, filed with the Louisiana Public Service Commission Monday, will be scrutinized by regulators and could change. If approved, it would strengthen more than 269,000 structures across Entergy Louisiana's footprint and begin in 2024. The utility is asking the PSC to approve the first phase, a 5-year, $5 billion spending plan.

It would represent the biggest investment in grid hardening in Entergy's history, and would be similar to a years-long effort by Florida to bolster its electric system after hurricanes wrecked it in 2004 and 2005.

Entergy CEO Phillip May said in a recent interview the utility created the plan after running a computer model that looked at 150 years of storm data and creating a priority list of projects. He cautioned that even if approved, the plan would not eliminate power outages, but is instead aimed at getting the lights back on faster. Florida's grid held up much better after Hurricane Ian this year than Louisiana's did after Ida in 2021.

"It's pretty clear what (Florida) did is working," May said. "2020 and 2021 clearly indicated we have to think differently."

The plan comes several months after Entergy New Orleans — whose regulator, the New Orleans City Council, has been harder on the utility than the Public Service Commission — filed its own $1.3 billion storm hardening plan. The City Council is still considering that proposal.

Entergy Louisiana controls the grid in much of Louisiana outside New Orleans, including transmission lines that feed the city, which were a weak spot during Ida. The plan calls for building transmission lines to 150 mph standards for a large swath of south Louisiana, including those structures.

The plan does not say specifically whether any other steps will be taken to bolster the lines feeding New Orleans; many of the details were filed under seal. Asked whether those lines are included in the plan, Entergy spokesperson Brandon Scardigli said the company hardened "all the transmission lines damaged during Hurricane Ida to a higher standard," including the Avondale to Harahan line to withstand winds of 175 mph. He added the new plan includes similar projects to harden "key transmission facilities" in the greater New Orleans area and elsewhere.

Scardigli said the average residential customer who uses 1,000 kilowatt hours per month would see their bills increase by 2% per year to fund the plan.

The bulk of the proposal, about $9 billion, would complete about 9,600 distribution and transmission hardening projects. Those consist of rebuilding or burying distribution lines that carry power to homes, elevating and building sea walls around substations, rebuilding transmission poles with higher wind ratings and more.

It also calls for increasing the standards for the level of winds that distribution poles, which carry power to homes, are built to withstand. The plan includes a map in which much of coastal Louisiana is built to withstand 140 mph to 150 mph winds, while New Orleans and other south Louisiana areas are built to 140 mph and Baton Rouge and areas to the east and west are built to 125 mph.

The rest would be spent on dead-end towers to anchor high-voltage transmission lines, which aim to prevent "cascading failures" on transmission lines; improving telecommunications to help Entergy get the lights back on faster; and accelerating how often it trims trees that often fall on power lines. Entergy also proposes building 10 microgrids, which are independent power sources that can help restore power more quickly in certain areas after a storm.

The company wrote in its filing that the "increasing threat of extreme weather events and the transition to a more electrified economy" prompted its multi-billion dollar plan. It said as major storm events are getting more intense, Entergy will incur the costs one way or the other — either on the front end as part of a resilience plan or in the aftermath of storms.

Alyssa Maurice-Anderson, director of regulator filings and policy at Entergy, also wrote in an affidavit that Entergy is worried that the billions of dollars in storm costs already being passed on to customers after recent hurricanes will limit the utility's ability to issue bonds for future storm debt. She wrote that the proportion of a typical residential bill dedicated to servicing storm restoration debt will be greater for Entergy customers in 2023 than for those of any other U.S. utility.

The company said its plan would reduce storm restoration costs by 50% over 50 years and decrease the amount of time customers are out of power after a storm by 55% over 50 years.

The Public Service Commission will need to decide how much customers can afford to pay up front, in a state where an outsized share of customers are poor and monthly electric bills are among the highest in the nation, according to federal data, even though electric rates have historically been low. But rates don't factor in usage, which is high in Louisiana. Customers must also pay fees, called storm riders, that are aimed at rebuilding the grid after hurricanes and that stay on bills in many cases for years.

Customers here face more and longer outages than almost anywhere, even when excluding major storms, something that has recently gotten regulators' attention. The commission last week indicated it may try to force Entergy to pay some of the recent storm costs if it finds the utility didn't maintain its grid properly.

The Public Service Commission already began looking at storm hardening after Hurricane Ida knocked out power to a huge swath of south Louisiana, in many cases for weeks.

Commissioner Craig Greene, a Baton Rouge Republican who has led the charge on that effort, recently criticized Entergy Louisiana executives for not playing ball in that docket. At a PSC meeting last week, he chided them for not providing the outside consultants with information they requested.

The commission will ultimately decide whether Entergy's plan moves forward, and what it looks like, but the plan would be funded largely by ratepayers, even if Entergy gets access to federal funds it is seeking. Some consumer advocates believe storm rider costs could be lessened if the state bolsters the grid on the front end.