On December 16, the New Orleans City Council Utility committee voted unanimously in favor of allowing Entergy to sell their gas operations for $484 million to Bernhard Capital, a private-equity firm that runs a subsidiary called Delta Utilities. Verite News reported that Bernhard Capital has given over $200,000 in campaign contributions to the members of the Louisiana Public Service Commission, who also had to approve the sale. The full Council voted to approve the measure just three days following the committee vote, as part of its consent agenda. One estimate showed that just the transaction costs—$16.5 million—could cause a $12 monthly increase for most customers. While the proposed new utility would still be subject to oversight from the Council, decoupling natural gas from electricity as its own utility completely de-incentivizes the gas utility from supporting electrification. Natural gas is primarily composed of methane, and though it dissipates from the atmosphere faster than carbon dioxide, methane traps about 80 times as much heat as carbon dioxide in the atmosphere over a 20-year period. Natural gas releases carbon dioxide when burned, but “leaks” methane during extraction, putting natural gas at the same level as coal in terms of its overall greenhouse gas emissions impact. All the while, global warming continues, outpacing earlier predictions, while emissions outstrip official projections, causing widespread ecological collapse, mass extinction, and even altering the rotation of the Earth. Natural-gas-burning stovetops are also bad for you. While the past 10 years were the hottest ever recorded, a Delta representative went before the committee claiming, “People are thirsty for economic development,” and that “people erupted into applause” hearing that Delta would move its headquarters to New Orleans. The following is a selection of comments (minimally edited for length and clarity) submitted in-person before the committee.
After y’all worked on this for, as you said, over a year, you chose to announce this resolution on a Friday, for a Monday meeting, less than two weeks before Christmas, and you can vote on this as a full council as soon as Thursday. That’s a nasty piece of work. Sure you extended public comment, but you’re voting on it right now, so it doesn’t really amount to much. It is patently untrue that this gas sale will “allow the city to invest in cleaner options,” as Councilmember Moreno claimed. On the contrary, this would lock in reliance on dirty fossil gas. As Delta said right here, their entire business model relies on expanding dirty gas infrastructure. That’s why the Office of Sustainability opposed this gas sale, which has gone unmentioned. The gas sale is bad for the environment, it would perpetuate, rather than sunset the use of gas, and I’m floored by this misleading doublespeak that states otherwise. Finally, this sale will be bad for ratepayers. Delta is a private equity company, and in literally every case where private equity companies take over, they cut as much as they can, and they raise prices for customers as much they can get away with.1Jack R., New Orleans DSA
In a city full of struggling people and struggling small businesses barely making it, it is not wise to let this inexperienced company that is a privately-owned utility… raise prices to “expand gas infrastructure.” How do you expand infrastructure without raising more capital off ratepayers? And why has this been rushed without much time at all for public input? Such a move is leaving out citizens of New Orleans who will be negatively affected. My preference would be for this Council to explore municipal ownership of the gas infrastructure. Please take the time to hear from the people of New Orleans. You have heard Entergy and Bernhard Capital. Now make time and listen to the citizens you represent.2Jeff C.
Since this application was filed, the Alliance [for Affordable Energy] has been sounding the alarm about the dangers to ratepayers, and to the city’s climate and clean energy goals. Whatever mitigation measures the advisors recommend will not be sufficient to soften the blow for ratepayers from the sale costs alone. The advisors council has not addressed the two largest issues: the impact of increasing electrification—including a massive load defection when the Sewerage and Water Board electrifies—on the vulnerable ratepayers, especially renters, [when] those without the means to electrify, [are] left behind on the retail gas market; and the impact of this deal on the city’s clean energy goals. The council here has a chance to do something heroic, to exercise your independent regulatory authority to protect the most vulnerable in our community. Or you can signal to your constituents that have taken time from their busy lives to be here or tried to submit comments online in opposition to this disastrous deal that their concerns are less important than those of the donor class.3Jesse G., Alliance for Affordable Energy
Right now, in New Orleans, residents and businesses are struggling under the weight of the cost of living. Last year, 19% of households were disconnected because of their inability to pay their energy bill. That’s nearly one in five households that were unable to keep the lights on and gas flowing. Our social safety net is full of holes. For homes with gas, that piece has been the major driver of utility bill increases in the last few years and this decision is not happening in a vacuum. Please consider why an investment company who sees general demand for gas falling believes this is a winning proposition. Logic will tell you this is a bad deal for New Orleanians.4Logan B., Alliance for Affordable Energy
If I am using the Delta and Entergy [talking points] they are promising us nothing but sunshine and blue skies. Nothing bad will ever happen! They have zero public trust to speak from, and this delusional idealism has no place in this democratic chamber when livelihoods are at stake. Council has no fiduciary responsibility to Entergy shareholders, or Delta, or Bernhard Capital profits. Your responsibility is to us! The people, the ratepayers. And this sale is not in our interest at all. Any increase will impact tens of thousands of poor and elderly people on fixed income. Have any of these people ever had to budget every dollar in this economy? Where does even a $12 increase come from? From groceries, medicine, transportation? Pick your poison. More gas emissions contribute to higher rates of child asthma in urban environments, and Delta’s business model requires more natural gas consumption in our city. People over profits. Vote no.5Bob M.
My understanding, and my expectation of the New Orleans City Council as the regulator on behalf of the citizens, is that you balance the risks and the benefits to the citizens. As I look at this proposed gas sale, it appears to me like the balance of risks and benefits is not in favor of benefits to the average citizen of the city. It appears to me that we will make less progress to our net zero carbon goals in 2050, and I worry about that a lot, with the hurricanes and our proximity to the Gulf. You all have committed to it. I’ve heard a lot about the jobs this deal will bring, and it sounds like net zero jobs. And the well-paying jobs, those will not go to the average citizen of New Orleans. They’re gonna go to folks from out of town, or those who already have them. And the rates increases that are invariably gonna rise after 15 months are gonna fall hardest on the most vulnerable.6Rebecca M.
I speak on behalf of people who are poor in the city of New Orleans. Those who are going to be lining up outside of my food pantry tomorrow. I speak on behalf of Mr. Jackson, who gets $37 in food stamps [monthly] who cannot afford any rate increase. When we understand that this farce, that this will be creating generational wealth, is simply untrue. Why is it that so often our Council seems to be so beholden to Entergy New Orleans? And anything that Entergy New Orleans wants, they seem to get. Why is it that we just cannot take more time, have more meetings where poor people can gather and say, “We have concerns?”7Rev. Gregory M.
I am so tired of being lied to. You guys are the responsibility bearers of what happens in this city. Please do not allow this to happen. One hundred jobs? There are 300,000 citizens in this city. I was born and raised here. I turned 60 this year. I know in my community, people are dying! Who’s living in the condos that are being built out here? It’s certainly not the citizens of New Orleans! The corporations that build their high-rises, like Delta, they’re the ones that are living good! I am appalled at the stuff that’s going on in this city. Please do the right thing here.8Lisa W.
To follow up on this issue, you can email your City councilmembers. To submit a public comment, follow instructions at council.nola.gov. Interested in reading all comments after a meeting? You can email your councilmember or file a public records request.
illustration by Sadie Wiese
