May 7, 2020

New Orleans left out of formal statewide protections against electricity shutoffs and late fees during COVID-19 crisis

New Orleans left out of formal statewide protections against electricity shutoffs and late fees during COVID-19 crisis


Just four days after the first presumptive case of coronavirus in Louisiana was announced in March, the Louisiana Public Service Commission announced an executive order to temporarily prohibit public utilities, including energy companies, from disconnecting service to customers. 

Last week, the commission passed a slew of new consumer protections, including a temporary moratorium on late bill payment fees and a permanent prohibition on late fees for any debt racked up from March 13 to the end of the order. The new measures and the service shutoff moratorium will now last until the state enters “Phase II” of the White House’s plan to reopen the economy, which will see bars, gyms and large venues open for business with some new protocols. It’s unclear exactly when that will happen, but it’s not expected to come until at least June. 

But New Orleans residents won’t be able to rely on those protections. The regulations apply to the vast majority of Louisiana residents, but not to those in Orleans Parish. 

That’s because the Louisiana Public Service Commission, or LPSC, doesn’t have jurisdiction over New Orleans. Unlike most American cities, New Orleans regulates its own municipal utility, Entergy New Orleans, at the local level. 

Entergy New Orleans is regulated by the New Orleans City Council. And unlike the LPSC, the City Council hasn’t passed any new consumer protections in response to the coronavirus crisis. 

Instead of regulatory mandates, the city has relied on a patchwork of assurances and promises from the company. And aside from an agreement to suspend service shutoffs to May 31, many of the assurances are still quite vague.

“I mean, an assurance is only good if you can trust the person who is assuring you,” Total Community Action President Thelma French told The Lens.

Total Community Action administers the federal Low Income Home Energy Assistance Program for Orleans Parish. The program provides direct bill assistance for some low income households.

“This challenge began for us when the Public Service Commission immediately passed their policy at the beginning of the pandemic,” French said. 

“For New Orleans citizens, there was a belief they were covered. We had to explain that until the council acted, they were not protected by the protections from the Public service Commission. … But [the council] did not pass any policy or ordinance or anything that was equal to what the Public Service Commission got.”

Logan Burke, Executive Director of the Alliance for Affordable Energy, also argued that New Orleans customers deserve the security of regulatory mandates.

“The New Orleans City Council hasn’t taken the official regulatory steps,” she told The Lens last week. “New Orleans doesn’t actually have a shutoff moratorium. We have a voluntary commitment.”

Uncertainty about what Entergy New Orleans is offering 

At a meeting on March 12, the council informally called on Entergy New Orleans to suspend all service shutoffs. But the company was initially hesitant to commit. 

Later that day, Entergy New Orleans CEO David Ellis sent a letter to the council saying the company would suspend service shutoffs for customers if “nonpayment is the result of the COVID-19 virus.” That raised questions about how customers would have to prove that nonpayment was related to the virus, or whether that policy would leave out customers who came into the pandemic with utility debt.

But then on March 13, the LPSC announced its first moratorium on service shutoffs. The regulations didn’t apply to Entergy New Orleans, but they did apply to Entergy Louisiana, the subsidiary that serves much of the rest of the state. On March 14, the utilities’ parent company, Entergy Corporation, said it would suspend service shuttoffs throughout all its subsidiaries, including Entergy New Orleans.

This week, Entergy New Orleans announced that the voluntary moratorium was being extended to May 31. In an emailed statement, City Councilwoman Helena Moreno, who chairs the counci’s utility committee, said that she expects the company to push that date back further.

“If not we will definitely use our regulatory powers to do so,” Moreno wrote. “The current extension is until June and I believe the extension needs to be beyond that.” 

Entergy and the City Council also recently announced further assurances from the company. 

“The company has agreed to provide a range option for residential and commercial customers, including potential bill reductions and providing an extended period of time to catch up with bills,” said an April 30 press release from Moreno’s office. “Moreno additionally requested that Entergy New Orleans come up with a plan to waive late fees for non-payment. The company has agreed to do so for customers in need who are in contact with the company.”

There are still questions about what, exactly, the company is offering. A May 5 press release from Entergy New Orleans, for example, makes no mention of suspending late payment fees, “potential bill reductions” or an “extended time period to catch up on bills.”

Over the past week, The Lens repeatedly asked Entergy New Orleans spokesperson Lee Sabatini to provide details about the relief it was offering to local customers — many of whom are out of work as a result of statewide business closures. The questions included whether the company could confirm it would waive late fees for some customers. In a series of responses, Sabatini answered some of The Lens’ questions, but never acknowledged the question on late fees.

“As I mentioned earlier, each customer’s financial situation is unique and our program offerings will be specifically tailored to help them manage through this pandemic,” Sabatini said in her last email before she stopped responding to requests for information. 

But other than the temporary shutoff suspension, it remains unclear whether Entergy New Orleans is offering residential customers any new services. In this week’s press release, the company only announced one new offering: a deferred payment arrangement for commercial customers. 

For residential customers, the company listed several programs that existed before the coronavirus, including autopay, paper-free billing and “levelized billing,” which averages out monthly bill payments over the year instead of billing varying amounts from month to month. The release said that customers will be able to fold their past-due amounts into their levelized billing plans. 

Entergy would not answer questions about eligibility requirements for customers, or whether eligibility for any of these programs had been expanded for residential customers. 

“Every Entergy New Orleans customer and their financial situation is unique, that’s why we are encouraging customers who are having difficulty paying their gas and/or electric bill to call us at 800-Entergy so our team members can work with them directly on a payment option that may work for them.”

The company also created a webpage for government and nonprofit resources for New Orleans customers. 

French told The Lens that she didn’t have details on late fee and bill reduction assistance eligibility, making it more difficult for Total Community Action to advise its clients.

“We need to have this conversation,” she said. “Assurances that are not legally binding makes our clients very vulnerable to how the vendor wishes to interpret them day by day. It gives them the flexibility to change their interpretation without notice or consultation.”

Another problem, Burke said, is that even if there is wide eligibility for the Entergy New Orleans program offerings, customers need to know those options exist and have to reach out to the company to access them. 

“You would have had to see their press release,” she said. “So there are protections there, but unfortunately you have to be more proactive in advocating for yourself in New Orleans.”

Part of the LPSC order last week was a requirement that utilities notify all customers with delinquent bills about when service disconnections will resume and explain what payment plans and assistance options are available.

‘We’re going into a full recession’

French and Burke argued that protections for utility customers will be crucial as the state grapples with current business closures and stay-at-home orders that have brought New Orleans’ hospitality-heavy economy to a halt. The economic fallout from the crisis will not end when the state starts reopening over the next weeks and months, they said.

Entergy did not respond to requests for data on the extent of outstanding debt among New Orleans households. Burke said that data reflecting the impact of the coronavirus crisis isn’t yet publicly available. But she said there is available data that can at least indicate the depth of the problem.

“The best place to start is to look at unemployment data,” she said.

According to WDSU, nearly 30 percent of all eligible workers in Louisiana have applied for unemployment benefits. That means that many simply won’t have the money to make those payments, especially in the summer months when electric bills are often higher because of air conditioning use.  

The problem is made worse by the fact that people have been ordered by the city and state to stay in their homes, French said.

“We’ve talked about that from day one — that the bills are going to go up because they’re home,” French said. “That is going to be a big issue. And I think there are going to be people who need supplemental funding outside of what LIHEAP will do to be stabilized. They’ll still be at risk.”

In order to be eligible for LIHEAP benefits in Louisiana, a household needs to have an income below 60 percent of the estimated median income for the state, according to the Louisiana Housing Corporation. For someone living alone, that income limit is $2,011 a month. For a family of four, the limit is $3,868 a month. 

LIHEAP can provide up to $600 to households twice a year during the cooling and heating “seasons” of the program, according to the LHC.. For Louisiana, the “cooling season” runs from April 1 to September 30 and the “heating season” runs from November 15 to March 15. Residents can also apply for crisis assistance if they’re facing the immediate threat of service disconnections. 

If households are approved for both seasons plus crisis assistance, their benefits will total roughly $1,500 a year, French said. But even that may not cover everyone’s needs, given the depth of the ongoing economic crisis. She said that regulators need to take into account the existing vulnerability of New Orleans residents.

“I think that the real issue is the ratio of debt to income and poverty in New Orleans. The standard in housing costs is that your total housing costs should not exceed 30 percent of your income. In New Orleans, when you look at the total housing costs, which includes utilities, we’re looking at 50% of income up to 75% of income for some people.”

LIHEAP isn’t an entitlement program, meaning that eligible households may be left out of benefits if the program runs out of funding. Even before the coronavirus crisis, there were far more people in the state eligible for LIHEAP assistance than actually got it. According to the National Energy and Utility Affordability Coalition, 72,035 households in Louisiana got access to assistance in 2019, even though there were 596,341 eligible households. 

The state is expecting supplemental funding for LIHEAP from the federal government as part of the coronavirus response. 

“We’ve advocated for – and expect to receive – a much-larger-than usual share of ‘LIHEAP’ dollars for direct bill assistance,” Moreno said in her emailed statement. “Louisiana could receive up to $30m alone from the CARES act, and we’re pushing for even more.”

But French said that hasn’t come yet. And it wouldn’t increase how much each household could get from the program, she said. 

On the state level, at least one commissioner from the LPSC, Craig Greene, is trying to take the consumer protections further. He recently proposed additional protections that include a three month buffer after the state enters Phase II during which service disconnections will be prohibited.

French argued the moratorium should go even further.

“Some of the protections and policies created around Covid-19 we should be pushing to expand to continue past December 31. We’re going into a full recession. And it’s important that some of these protections go past December 31 throughout the recession.”

French and Burke both said that the city should have existing regulations on the books that kick into effect during emergencies.

“We know that whether it’s a pandemic or a storm, there are going to be future disasters,” Burke said. “Instead of having to splash around and play guessing games, it’s so much better to be prepared.”

In an emailed statement, Andrew Tuozzolo, Moreno’s chief of staff, indicated the city is moving toward that exact policy. 

“Over the next few months, we are going to update our permanent regs to reflect the need to curtail shut-offs and provide billing assistance in emergency circumstances so issues such as these don’t have to be handled on an ad hoc basis,” he wrote. 



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