Dive Brief:

• Entergy New Orleans has proposed restructuring to create a distinct divide between its regulated operations and the competitive side of the business, and is offering $25 million in customer credits in the process.
• The Times-Picayune reports the New Orleans City Council will now spend several months considering the proposal, which could lower corporate taxes by formally incorporating the utility in Texas.
• The credits would amount to about $25 per year for each customer through 2020.

Dive Insight:

Entergy New Orleans wants to restructure its business to insulate customers from the up and downs of the competitive energy marketplace, and if its proposal is approved would also save millions in corporate taxes. The utility would formally incorporate in Texas, helping avoid some taxes it now collects in Louisiana. But officials stressed the changes are only on paper, and would not impacts customers.

"We are not moving to Texas," said Gary Huntley, Entergy New Orleans vice president of regulatory affairs.

Customer advocates say the proposal will require significant scrutiny. Alliance for Affordable Energy executive director Casey DeMoss told The Times-Picayune regulators must be wary of "double leveraging," using a newly-created holding company to manipulate debt. The Louisiana Public Service Commission has launched an investigation into whether utilities are using the move to boost profits.

The utility is working to incorporate more carbon-free energy into its portfolio, and recently issued a request for proposals for 20 MW of renewable power. But it has also proposed a new gas-fired combustion turbine plant designed to "increase operational flexibility, increase reactive power and aid in restoration efforts following major weather events."

The utility filed its integrated resource plan in June, and officials say it is moving to use more renewable energy despite the new fossil fuel facility it proposed.

“A consistent theme among stakeholders who participated and provided input in the process was a strong desire that we do more to incorporate renewables into our long-term plans – and we are continuing to look for economical ways to do so,” Charles Rice, president and CEO of Entergy New Orleans, said in a statement. “For instance, we recently issued a request for proposals related to 20 megawatts of renewable generation, which will help us better determine the availability of economic utility-scale renewable generation for New Orleans.”