News Release > Entergy New Orleans Reaches Preliminary Tax Savings Agreement to Benefit Customers
Entergy New Orleans Reaches Preliminary Tax Savings Agreement to Benefit Customers
If approved by the council in June, residential bills from July to December would decrease by an average of approximately $11 per month
NEW ORLEANS – Following the New Orleans City Council’s February 2018 resolution directing Entergy New Orleans to quantify the benefits to customers of the Tax Cuts and Jobs Act, the company has agreed, under the direction of the council’s advisors, to flow through approximately $50 million in tax savings benefits by July 2019. In addition to these near-term benefits, customers can expect to see approximately $71 million in tax savings benefits over the longer term.
Entergy New Orleans expects that if the agreement to be filed with the council is approved next month, the portion of the benefits to be realized through bill credits would begin with the first billing cycle of July 2018.
In addition to the benefits described above, customers also are expected to receive benefits in the form of lower fuel or rider costs due to the act’s effect on certain power-purchase agreements pursuant to a council-directed filing made with the Federal Energy Regulatory Commission in March 2018. These benefits are estimated to be over $30 million in 2018, with some additional benefits to be realized in future years, and are estimated to reduce typical residential electric bills from July to December 2018 by an average of approximately $11 per month.
If approved, the $50 million in tax savings benefits will begin to be realized by customers in several ways:
- bill credits totaling approximately $14.1 million applied to the total company electric fuel adjustment clause in certain high-usage (summer) months;
- bill credits totaling approximately $2 million applied to the purchased gas adjustment in certain high-usage (winter) months;
- bill credits totaling approximately $4.8 million applied to offset purchased power and capacity costs;
- funding of Energy Smart programs through August 2019 in the amount of approximately $13.5 million;
- funding of grid-modernization projects in the amount of approximately $12.8 million;
- funding of a Smart City pilot in the amount of approximately $3.2 million.
“This preliminary agreement strikes a balance between investing in projects and programs for the benefit of all customers while returning savings to help them when energy usage is highest,” said Charles Rice, president and CEO of Entergy New Orleans, LLC. “We look forward to continued work with the council and its advisors to implement savings seen through the federal Tax Cuts and Jobs Act enacted in December 2017.”
Entergy New Orleans first announced that it filed its proposal for implementing the benefits of the recent federal tax reform legislation with the New Orleans City Council on March 27, 2018.
Entergy New Orleans, LLC is an electric and gas utility that serves Louisiana’s Orleans Parish. The company provides electricity to more than 200,000 customers and natural gas to more than 106,000 customers. The company is a subsidiary of Entergy Corporation.
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 9,000 megawatts of nuclear power. Entergy delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of approximately $11 billion and more than 13,000 employees.