New Orleans reaches $250M deal with Entergy to end battles over Grand Gulf, reliability (2024)

New Orleans has reached a deal with Entergy to settle longstanding allegations that the utility mismanaged the massive Grand Gulf nuclear plant that delivers large amounts of power to the city, winning a $250 million payout.

The agreement represents a bigger payout than Entergy offered in 2022, as the utility worked to end wide-ranging allegations from regulators about its Mississippi nuclear plant that provides much of New Orleans' power.

Regulators in Louisiana, Mississippi and Arkansas had accused Entergy of bilking ratepayers by using an array of arcane tax and accounting measures -- such as billing them for lobbying and private plane rides for executives and generally mismanaging the plant -- which for years was among the least reliable nuclear plants in the nation.

The $250 million settlement, announced by City Council leaders Thursday, ends the fight over Grand Gulf and array of other issues, including a battle over a $1 million fine over Entergy’s poor reliability performance. The city will get $500,000 to end that battle.

It’s not yet clear how the money will be used. But customers could eventually see rate relief on their bills from the money. The City Council will take up the proposed settlement April 23.

While the settlement works out to more than $1,000 per Entergy New Orleans customer, it's unlikely that ratepayers will see refunds anywhere near that large. Council member JP Morrell indicated that some of the money would likely be invested in improving the utility's service.

“This settlement represents an unprecedented investment in the City of New Orleans that will improve services for citizens without driving up their bills,” Morrell said.

The utility had already settled with regulators in Mississippi and Arkansas, who joined with officials that regulate Entergy Louisiana and Entergy New Orleans in a series of cases at the Federal Energy Regulatory Commission.

The Louisiana Public Service Commission, which regulates Entergy Louisiana, is still litigating. Commissioner Davante Lewis, a Democrat representing parts of New Orleans, said in a statement that he's resolved to continue fighting until the PSC can land a fair deal of its own.

"While I'm glad to see Entergy being held accountable for major instances of past imprudence, we need to remember the devil is in the details," Lewis said. "Until we see the term sheet, we can't know how many of these settlement dollars will make their way back into the hands of ratepayers where they belong."

The City Council, which regulates Entergy New Orleans, has held out settling the case even as Mississippi and Arkansas opted to take the payouts, arguing that the utility’s offer was a lowball that would let it off the hook too easily. That settlement offer, in 2022, would have sent $116 million to the City Council, though the new settlement also ends cases outside of Grand Gulf.

Council President Helena Moreno said the case was about “demanding accountability” and ensuring residents get reliable service.

“With these settlements, we have sent that message clearly and secured an investment that will benefit New Orleanians for a generation,” Moreno said.

The Grand Gulf plant, which sits just on the Mississippi side of the Mississippi River, has an output of more than 1,400 megawatts, making it the largest single-unit nuclear plant in the nation. The utility, which owns most of the plant through a subsidiary, delivers the power to homes and businesses in the three nearby states.

“We are pleased to resolve these open issues after constructive conversations with the New Orleans City Council,” said Deanna Rodriguez, president and CEO of Entergy New Orleans. “We appreciate the collaborative effort of all stakeholders in getting to this point, and we look forward to the committee vote next week and to begin flowing the settlement benefits to our customers.”