Customers to Cash in on Entergy Louisiana Merger
In a transaction that will generate up to $140 million in customer benefits over the next decade – including $107 million in guaranteed credits to 1 million ratepayers in the region – Entergy Louisiana and Entergy Gulf States Louisiana will be consolidated into a single utility company as of October 1.
The merger, approved by the Louisiana Public Service Commission (LPSC) on August 26, will create a single utility named Entergy Louisiana. The new company will boast over $16.5 billion in assets and 66,194 gigawatt hours (GWh) in total sales.
Customers are guaranteed to receive credits on their bills during the first nine years from anticipated savings resulting from the transaction or specifically:
- $22 million in credits on their bills in the first year,
- $18 million in the second year,
- $15 million per year over the next three years, and
- About $5.5 millionper year over the remaining four years.
The ability to reach the potential $33 million of additional customer benefits will be driven by anticipated regulatory savings and reduced administrative and operational costs. Additional benefits are possible – even beyond 2025.
“Combining the utilities improves our ability to help Louisiana’s communities prosper,” commented Phillip May, president and CEO of Entergy Louisiana and Entergy Gulf States Louisiana, adding “A unified, financially strong company will be better able to attract the capital required to upgrade our grid and replace aging power plants with highly efficient, clean units so we can provide the safe, reliable and affordable power needed to satisfy our current customers’ expectations and meet the demands of a growing economy.”
The transaction is designed to be revenue neutral. In order to minimize changes in customer bills, the combined utility will maintain existing base rates and riders for existing and new retail customers. Fuel costs to serve the combined customer base will be blended, but will be subject to a tracking mechanism to mitigate any material cost shifts.
“As the new company makes the needed investments in the months and years ahead, the costs will be shared across a larger base of customers,” May said.
What’s more, “A combined company will result in a more efficient regulatory process for the Louisiana Public Service Commission. We will be able to combine rate cases, fuel audits and other proceedings, which should save everyone time and money, savings that will be passed along to our customers,” May said.
With operations in southern, central and northeastern Louisiana, the two companies are subsidiaries of Entergy Corporation – which delivers electricity to 2.8 million utility customers in service areas across Arkansas, Louisiana, Mississippi, and Texas. Entergy has annual revenues of more than $12 billion and about 13,000 employees.
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