New Orleans City Council members on Monday (Dec. 16) voted to advance the sale of Entergy’s local gas utility to a private equity-backed firm  — a $484 million deal first announced last year. 

The resolution will now go before the full seven-member council for a final vote, expected later this week.

The vote by the council’s utilities committee came over fierce public opposition to the sale. More than two dozen people showed up at the committee meeting, decrying not only the sale of the local utility but also the timing of the council’s vote. Some accused the council of using the holiday season to “sneak” the deal through.

The City Council, which regulates utility providers in the city, was seen as the biggest regulatory hurdle for the sale of Entergy’s gas business throughout the state. The Louisiana Public Service Commission, which regulates the company for most of the rest of the state, approved the sale in August.

But in New Orleans, the proposed sale was met with pushback from the council’s contracted utility advisers as well as the consumer and environmental advocacy group the Alliance for Affordable Energy. Both the advisers and the Alliance for Affordable Energy cautioned that the sale could lead to higher prices for ratepayers, a concern echoed by attendees of Monday’s meeting.

“My question is, how do you expand [gas] infrastructure without raising more capital off of more ratepayers?” said Jeff Conner, referring to promises by Delta Utilities to invest in local gas service. “And why has this been rushed without much time at all for public input?”

Over the past several months, council members have largely been silent on the proposal to turn over Entergy’s gas business in the state to Delta Utilities, a subsidiary of private equity firm Bernhard Capital, which in turn is owned by Baton Rouge businessman and major political donor Jim Bernhard. 

Then late last week, Councilmember JP Morrell, who chairs the committee, announced the upcoming vote in a press release. The press release signaled councilmembers’ approval of the sale, saying the deal would result in the creation of about 100 new jobs and touting the purported improvements to gas service that would result from the deal moving forward. 

“I know there’s a lot of trepidation,” Morrell said on Monday. “But I want to remind everyone that the [Louisiana Public Service Commission] approved this in August of this year. Every other regulatory authority has moved as quickly as possible with as little conversation as possible, and they have done it without securing any cost control.”

The council’s resolution imposes some conditions on the sale, such as limiting transition costs that can be passed onto ratepayers. The council says that these conditions lessen the impact on average ratepayers from about $12 per month to just over $3 a month. The council’s utility advisers, who had raised alarms about rising bills, said at the meeting that the conditions adequately addressed potential harm to ratepayers.  

Still, people who spoke at the meeting raised concerns over what it would mean to hand over the utility to a private equity-backed firm and how the deal would impact the city’s own commitments to “net zero” carbon emissions by 2050.

The committee ultimately voted 4-0 in favor of the resolution, drawing jeers from audience members. 

Monday’s vote means that the council will be able to place the final vote on its consent agenda — a group of ordinances and resolutions previously vetted by committee and voted on en bloc, typically with little or no debate. As of Monday morning, the council plans to do just that, Morrell’s office told Verite News. 

Tim Poche, CEO of Delta Utilities, expressed optimism at the outcome of Monday’s vote. 

“Hopefully, it’s approved by the full council,” Poche told Verite News. “We remain committed to the regulatory process and being transparent throughout.”

‘A pretty foregone conclusion’

At Monday’s meeting, representatives from Delta Utilities and Entergy New Orleans gave presentations hailing the benefits of the sale, which they said would allow each company to focus on and improve their “core” utilities to the benefit of ratepayers.

Delta Utilities noted that the company plans to locate its headquarters in the city, arguing that the sale would be an economic win for New Orleans. They cited support from local business groups, including Greater New Orleans, Inc. and the New Orleans Chamber of Commerce.

“Our business has been formed from the belief that the most important aspects of the business are our customers, our employees and the communities that we live in,” Poche said during a presentation before the council.

But many community members raised skepticism over claims that the sale would not result in any ratepayer harm.

“I don’t want mitigated harm, I want no harm,” Taylor Billings, a resident of Mid-City, said. “Please do not support this cash grab.”

After the committee ultimately voted in favor of the deal, critics of the proposal left the chamber, and some said they did not plan to return for the final vote on Thursday.

“It seems like a pretty foregone conclusion at this point,” said Jesse George, policy director for the Alliance for Affordable Energy. “The fact that they released their press release last Friday saying they were going to approve it before they had an opportunity to hear from the public tells you everything you need to know.”

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Katie Jane Fernelius reports on the local government for Verite. Prior to joining Verite, she was an independent journalist and producer. Over the course of her career, she’s reported for and worked...