Amid record-setting heat earlier this summer, the New Orleans City Council asked Entergy New Orleans and the Sewerage & Water Board to suspend service disconnections until Oct. 1. But the utilities are continuing to cut customers off, leaving thousands of residents at risk of losing water and electricity.
Despite the council’s urging, the Sewerage & Water Board never stopped service shutoffs. Entergy New Orleans announced a disconnection moratorium on Aug. 21, but resumed shutoffs again last week, well before the council’s requested date and despite persistently hot temperatures.
The council is the primary regulator of Entergy New Orleans and has regulatory authority over Sewerage & Water Board billing practices, though its August request was just that — a request.
“I do question whether now is the right time to resume shutoffs,” Councilmember Lesli Harris told Verite. “And the bigger question is whether Entergy is doing enough to support our most vulnerable residents, including debt forgiveness.”
Advocates for utility customers say the number of households vulnerable to losing electricity and water has grown in recent years as heat waves, gas prices, hurricanes and rate hikes have made it harder for New Orleans residents to keep up with their utility bills.
“Folks are absolutely struggling,” said Jesse George, policy director at the Alliance for Affordable Energy. “We were getting calls on a weekly basis from people struggling with outrageous bills.”
Andreanecia Morris, executive director of HousingNOLA, said that energy bills have been a major part of the city’s housing affordability crisis, and that high utility bills are starting to impact more people.
“I’m hearing from people who don’t normally struggle with their bills, which is never a good sign,” Morris said.
There were over 24,000 “delinquent” Sewerage & Water Board customers in July, according to a recent financial report. A spokesperson for the utility told Verite that there were 1,100 customers “in the queue” for water shutoffs.
“Shutoffs are our last resort,” Sewerage & Water Board Executive Director Ghassan Korban said in a statement. “We have multiple options to work with our customers to find a solution that is mutually beneficial. We must address the fact [that] in our city we have a significant portion of our population who struggle to pay their water bills and we have to help them.”
It is harder to pin down how many Entergy New Orleans customers are vulnerable to shutoffs. Customers owe $6.2 million in electric bill debt and $639,000 in gas bill debt, according to numbers the company provided to the council in late August. But neither the council nor Entergy provided any estimate on the number of customers in debt to the company.
Entergy executives did tell the council in Dec. 2022 that 36,000 customers — roughly one in five New Orleans accounts — had entered deferred payment plans to keep up with bills they couldn’t afford in 2022 alone.
It doesn’t take long after a missed payment for an Entergy customer to potentially lose power. The company said at the December meeting that Entergy can put out a disconnection order only 29 days after a customer misses a bill payment. The company can allow customers to enter payment plans or access government assistance or find other ways of trying to keep power on, but it does so on a case-by-case basis.
“The mindset is to help people,” Entergy Vice President Sandra Diggs Miller told the council.
Residents haven’t gotten much relief on their energy bills in the nine months since that meeting, as high heat and rising gas prices led to another summer of skyrocketing bills. New Orleans recorded its hottest day on record during 18 different days in August this year. Customers also started paying new fees to cover $170 million in utility equipment damage from Hurricane Ida.
Sewerage & Water Board bills haven’t seen the same level of rate hikes. But there have been other billing issues, including wildly inaccurate and expensive bills. Erroneous water bills have been a problem for years, at one point forcing the utility to freeze disconnections.
Some council members also reprimanded the Sewerage & Water Board in May when it announced plans to shut off water to entire apartment buildings if the building owner owed money.
Many tenants in New Orleans are not directly responsible for paying water bills, meaning they bear the burden of service shutoffs if their landlords don’t pay.
A permanent end to ‘cruel and needless’ shutoffs?
For utilities, service disconnections are a long-held method of enforcing bill payments. But in recent years, as the coronavirus pandemic and extreme weather have led both utilities to implement — and eventually lift — disconnection freezes, advocates have questioned whether it is ever humane to shut off essential services to people who can’t afford to pay.
A statement from Councilmember Helena Moreno’s office said she was working to “ban shutoffs throughout the entire period of any future heat emergencies by opening a utility docket dedicated to revising the current customer bill of rights. This would end the threat of dangerous shutoffs during weather emergencies for good.”
But some advocates argue that disconnections for unpaid bills should permanently end for residential utility customers.
“It is cruel and needless to allow this practice,” said George of the Alliance for Affordable Energy.
The Alliance recently penned a letter to the council urging it to “assert your regulatory authority over these utilities and end the practice of residential disconnections once and for all.” The consumer advocacy group wants the council to exert more power over the companies — such as passing an actual regulatory order for a shutoff freeze.
“The climate crisis is here, and New Orleans is at the forefront,” the letter said. “Extreme storms, heat, and cold are all facts of life now, and piecemeal moratoria are not a solution.”
George said the council acknowledged receipt of the group’s letter but hasn’t responded to its request. The group is still working with local lawmakers on a program to help pay down existing customer utility debt, though some council members have suggested Entergy should absorb the cost of debt forgiveness.
Both George and Morris of HousingNOLA pointed out that people aren’t protected by shutoff freezes if their service has already been turned off prior to an emergency moratorium. Additionally, the loss of power can be a life-or-death issue for elderly or medically vulnerable residents, especially for those who rely on electronic medical devices, regardless of the weather.
Korban said in his statement that shutoff suspensions substantially impact the water utility’s finances, pointing out that during the17-month coronavirus pandemic moratorium, past due bill payments rose from $33.5 million to $64.1 million.
But advocates like George, along with Councilmember JP Morrell, have argued that New Orleans residents aren’t trying to skirt their utility costs: “There are people in this city living paycheck-to-paycheck who have to decide at the end of the month, ‘Do I pay my Entergy bill or do I buy my insulin? Do I pay my Entergy bill or do I pay my rent?’” Morrell said last year.
The Alliance pointed out in another letter to the council that during a shutoff moratorium last summer, Entergy New Orleans posted higher-than-expected earnings.
“Clearly, the company’s profitability is not dependent on its ability to disconnect residents struggling under one of the highest energy burdens in the nation,” the letter said.
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