The question of whether a private equity-owned company can take over Entergy’s gas utilities in Louisiana — which serve over 200,000 customers in Baton Rouge and New Orleans — now depends on whether the seven members of the New Orleans City Council will vote to authorize or deny the proposed sale.
The $484 million deal between Entergy and Delta Utilities, which is owned by Baton Rouge-based Bernhard Capital Partners, was first announced last year. But the deal needed to pass regulatory muster with three separate entities to close: the Louisiana Public Service Commission, the Baton Rouge Metropolitan Council and the New Orleans City Council, which regulates utilities in the city of New Orleans.
The Louisiana Public Service Commission unanimously approved the deal in August. (Bernhard Capital gave more than $200,000 in campaign donations to members of the commission, the vast majority to Commissioner Craig Greene, whose district includes Baton Rouge, according to a report by Floodlight.) The Baton Rouge Metro Council, which has more limited regulatory authority than the Public Service Commission and the New Orleans City Council, is expected to follow its lead and also approve the sale, according to those familiar with the process. But it is not yet clear what the New Orleans City Council will decide.
When the proposal went before the Public Service Commission, which regulates utilities for most of the state, no outside groups submitted arguments against the deal. As a result, Commissioner Davante Lewis told Floodlight at the time, voting against the sale could have been considered “arbitrary and capricious,” possibly resulting in litigation.
That is not the case in New Orleans, where the council’s longtime outside utility advisers and the Alliance for Affordable Energy, a local consumer advocacy group, have both formally weighed in, submitting their analyses to the council’s “utility docket” for the proposed sale. Both cautioned the council against signing off on the sale as initially proposed.
The docket, which closed this month, features extensive testimony, briefs and evidence from Delta Utilities, Entergy New Orleans, the Alliance and the utility advisers, debating the impact the sale would have on New Orleans.
Now, councilmembers will review the reams of information and make their decision.
Depending on whom you ask, the council’s decision could come as early as next month or as late as next summer.
A spokesperson for Entergy New Orleans said the company expects a decision by the end of the year, though even on that quick timeline, the transaction wouldn’t close until next summer. A New Orleans community group, whose representative asked not to be identified, said that members were told by Delta Utilities that a council decision won’t be made until next year. (Delta Utilities did not respond to a request to confirm that proposed timeline.) Councilmembers, meanwhile, have been advised not to speak about the deal – or its timeline – for fear of litigation.
At the heart of the deliberations is whether the proposed sale is in the public’s interest.
Proponents of the sale argue that splitting off gas and electric services into two different companies will allow each to focus on and improve its service. They also argue that the arrival of Delta Utilities, which plans to move its headquarters to New Orleans should the transfer be approved, will provide downstream economic benefits to the city.
“Approval of the transaction will generate significant positive benefits for New Orleans, including creating hundreds of jobs, millions in economic benefits, and establishing a $1.7 billion, multi-state headquarters in the City,” Tim Poché, CEO of Delta Utilities, told Verite News over email. “Delta Utilities is confident that this transaction is in the best interest of customers.”
However, critics of the deal — including the council’s utility advisers — point to the fact that Delta Utilities has no prior experience operating a utility. They further argue that approving the sale without imposing any mitigating conditions, like restricting the utilities from passing on transaction costs, could increase electricity and gas bills for local customers.
“[Delta Utilities] has provided no guarantee that ratepayers will not be exposed to excessive Transition Plan Costs,” the advisers wrote in a November filing. “[We] have concluded that significant ratepayer harm would result to both [Entergy New Orleans] electric and [Delta Utilities] gas customers if the Gas Transaction is approved as proposed.”
The Alliance for Affordable Energy has also argued that the sale will have an adverse impact on ratepayers. But they further contend that approving the sale will fundamentally undermine the city’s clean energy commitments and put the most vulnerable residents, who might not have the funds or agency to electrify their homes, at the greatest risk of increasing rates.
Delta Utilities “is coming in to squeeze ratepayers and prop up a fossil distribution system,” Jesse George, the New Orleans Policy Director for the Alliance for Affordable Energy, told Verite News. “This would basically undo any and all policies that we have adopted to promote and advance clean energy.”
Fears of rate increases
The New Orleans City Council will evaluate the sale based on 18 factors, including whether the transfer is in the public interest, whether Delta Utilities is able to finance and operate the utility, whether the deal is fair and reasonable to affected employees and whether the transfer will be beneficial to the city.
The involved parties – Entergy New Orleans, Delta Utilities, the Alliance for Affordable Energy and the council’s utility advisers – have largely debated three central questions throughout the docket: Will the sale result in rate increases for local customers? Will Delta Utilities be a good steward of the local gas utility? And will the sale benefit New Orleans as a whole?
There is fierce disagreement as to whether the sale would increase rates for local electric and gas customers.
Delta Utilities has long argued that the sale will not impact customers’ gas bills because the utility plans to “step into” Entergy New Orleans’ existing rates for the first fifteen months after the sale. After that point, they would be able to propose new rates based on their expenditures, but the council would need to approve those rates.
“This commitment provides customers with a significant amount of rate stability that would not occur without the transaction,” Poché told Verite News.
Delta Utilities has also promised to expand and modernize the gas utility, including transitioning to a new cloud-based IT system. Poché said these improvements will help the company operate the utility “efficiently and in a cost-effective manner,” leading to potential long-term savings for customers.

However, the council’s advisers raised concerns that the utility could use the costs associated with those changes to justify hiking rates for New Orleans customers.
“Given [Delta Utilities’] stated intention to continue to invest in the gas system, this period of rate stability will likely result in a significant rate increase,” the advisers said in an October brief.
Further, the utility advisers worry that the costs of the sale alone could also be passed onto customers, raising their monthly gas bills by an estimated $12 a month. The advisers also expressed concern that the sale could increase electric bills, too, given the loss of the gas revenues for Entergy New Orleans, which will still be running a costly electric grid. Because of this, they say the sale would “impose quantifiable harm” on ratepayers.
Delta Utilities has contested that in its own filings, alleging that the advisers’ rate analysis is “not only hypothetical but also inaccurate.”
“Our projections show short- and long-term savings to customers that outweigh any costs associated with the transaction,” Poché said.
“Entergy does not believe this transaction will result in harm to ratepayers,” a spokesperson for Entergy New Orleans told Verite News.
Ultimately, the advisers advocated for the council to impose conditions on the sale that would limit both utilities from passing those costs onto ratepayers.
Can a newcomer company operate a major utility system?
Both the advisers and the Alliance pointed out that Delta Utilities has yet to actually operate a gas utility – in New Orleans or elsewhere.
But Delta Utilities argued that it planned to retain most of Entergy’s gas utility employees, offering them comparable pay and benefits and maintaining institutional expertise and consistency in the transition.
The advisers seemed mostly satisfied with this transition plan as evidence in favor of Delta Utilities’ ability to operate the utility well. But George was less forgiving in the Alliance’s brief.
“[Delta Utilities] proposes to be a utility, but it has never served a single customer,” he said.
The fact that Delta Utilities is backed by a private equity firm has also raised alarms. Private equity firms have a reputation for dramatically restructuring companies as a way to induce quick, sizable profits. (New Orleans residents might recall Wiregrass Equity Partners’ purchase of Faubourg Brewery, promising to increase production and distribution and bring more jobs to the area. Instead, the private equity firm eventually liquidated the company.)
Bernhard Capital, which owns Delta Utilities, has been making a play for utilities across the country – advertising itself as being in “the business of being essential.”
But representatives from Delta Utilities have insisted that their intention is to leverage their connection to Bernhard, and the capital that comes with it, to improve the local gas utility.
They point to their ambitions to acquire CenterPoint Energy, which distributes natural gas across Mississippi and Louisiana, as part of their effort to streamline natural gas distribution in the South to the benefit of customers.
“When considering Delta Utilities’ series of proposed transactions with Entergy and CenterPoint Energy collectively, Delta Utilities will be a $1.7 billion, multi-state utility headquartered in New Orleans,” Poché said. “It will be one of the largest natural gas utilities in the Gulf South and among the top 40 in the U.S., serving nearly 600,000 customers.”
The climate debate
George, of the Alliance for Affordable Energy, has argued that focusing on the economic benefit to New Orleans ignores another, arguably more pressing concern: the climate impacts of maintaining and expanding natural gas operations, as Delta Utilities has pledged to do should the sale go through.
“Utility companies plan in decades-long increments, so a decision to purchase and expand this gas distribution system today in 2024 or 2025 will have implications until at least 2050,” George said. “This decision to approve this sale would ensure that we are dependent on the direct burning of fossil fuels.”
George found an ally in the city’s Office of Resilience and Sustainability, which filed a brief urging the council not to approve the sale.
“The separation of [Entergy’s] gas utility from its electric utility creates a critical financial need for [Delta Utilities] to expand the network of natural gas since the utility would be relying solely on the sale and usage of natural gas within New Orleans to generate revenue – a mission that runs counter to the emission reduction goals” adopted by the city, Greg Nichols, the city’s deputy chief resilience officer, said in a November brief.
But Delta Utilities has said that those climate concerns are beyond the council’s purview as utility regulators. In a filing submitted to the council, Jeffrey Yuknis, a managing director at Bernhard Capital, said that while climate change and emissions reduction are “important public policy topics,” they “have no direct relevance on whether this Transaction is in the public interest.”
To George, however, the potential climate impact of the deal is one of the most important issues before the council.
“To assert that climate-related issues are outside of the scope of this proceeding is worse than narrow-minded, it is irresponsible,” George said.
Poché denied that selling the gas utility would meaningfully impact emissions.
“Natural gas use in the city has a minimal impact on our state’s overall emissions, especially compared to overall emissions,” Poché said, pointing to data his company provided that said that residential natural gas use in New Orleans accounts for only 0.19% of the state’s total emissions. “Delta Utilities fully supports efforts to increase energy sustainability and reduce emissions, and we believe that a modernized gas utility will be better equipped to support these goals.”
This story has been updated to include an additional comment from Entergy New Orleans.