Few of Entergy’s $1.9 billion in grid-hardening projects include underground power lines

Smoke rises from distant stacks at Entergy's power plant in Reserve, Louisiana, on Wednesday, Nov. 10, 2021. (Wes Muller/Louisiana Illuminator).

Entergy Louisiana’s plan to upgrade its power transmission and distribution systems will cost customers $1.9 billion and include over 2,100 grid-hardening projects to strengthen electrical infrastructure across the state, though only a small fraction involve burying power lines underground.  

The Louisiana Public Service Commission, in a 3-2 vote Friday with Republican members prevailing, approved Entergy Louisiana’s spending proposal for the first phase of its “Future Ready Resilience Plan.” Commissioners Foster Campbell and Davante Lewis, both Democrats, opposed the measure. 

The vote allows Entergy to charge $1.9 billion to its customers to pay for “grid-hardening” projects, though Lewis and other critics of the plan claim it should include a wider variety of data-driven solutions. 

Entergy Louisiana executive Larry Hand told the commission the projects include replacing or upgrading approximately 69,000 utility poles and other structures across the state. In total, the plan will strengthen approximately 3,238 miles of power line, according to Entergy Louisiana spokesman Brandon Scardigli. 

Scardigli told the Illuminator Entergy’s plan includes approximately 100 miles of underground power lines, roughly 3% of the total line being strengthened.

Logan Burke, executive director of the Alliance for Affordable Energy, and other advocacy groups are still pouring through Entergy’s proposal to try to determine what kinds of projects are included.

“The rush of this process has meant that even parties that are very interested in the details have been scrambling to understand how the utility used their model to prioritize projects,” Burke said Monday. “The utility’s model used a benefit-cost ratio with inputs hidden behind high walls of confidentiality. This has made it challenging to understand why some measures that appear to be very beneficial in other states were assigned such low cost-benefit values in Entergy’s model.”

Entergy Louisiana contends it put the public on notice when its resiliency plan was filed 16 months ago, but Lewis noted the final draft with its actual plans wasn’t submitted until Monday before last week’s PSC meeting.  

Florida touts underground lines

During Friday’s hearing, Burke told the commission how utilities in other states have benefitted from moving power lines underground instead of bolstering overhead lines. 

Strengthening utility poles and other overhead grid improvements led to an average of 20% fewer outages during storms, while burying power lines led to 600% fewer outages, Burke said, citing data from Florida’s utility regulators.     

The overhead-versus-underground debate is nothing new in the electric utility sector. While customers generally prefer underground lines, some utilities shy away from them because of their higher costs. According to one study, the cost of constructing underground transmission lines ranges from 4 to 14 times more expensive than overhead lines, largely attributed to digging and entrenchment. 

The Florida Power and Light Co. touts underground lines on its website, saying they perform 50% better than overhead lines during routine day-to-day operations. The utility began burying its power lines years ago and now puts about 90% of its new distribution lines underground. 

Underground lines pose different maintenance and repair challenges, however. It can be more difficult to pinpoint faults in such lines, and repairs can sometimes take longer if they require digging up and reburying a line. Flooding can also damage underground lines that aren’t adequately protected, but experts note these drawbacks are generally offset by the far fewer repairs needed.

Asked about the small amount of underground lines in Entergy’s grid plan, Scardigli cited cost as a major concern.

“Undergrounding is significantly more expensive and by undergrounding strategically, we’ll be able to harden more for the same level of investment,” he said. “We received stakeholder and expert feedback about the costs and benefits, and in order to keep prices down but still deliver meaningful resilience, a combination of strategic undergrounding and overhead hardening was determined to provide the most affordable resilience solution for our customers.”   

The Alliance for Affordable Energy and other advocacy groups said Entergy should have included a greater variety of resiliency solutions or at least a validated cost-benefit analysis for the projects it did select. 

A true resiliency plan should be much more holistic and include a variety of solutions such as community resiliency hubs, more efficient housing, inter-regional interconnections, transmission redundancies and extreme weather planning, Lewis said. 

Critics complain about approval rush

The Public Service Commission’s timeline was another major sticking point for opponents of Entergy’s resiliency plan. Together Louisiana, an umbrella organization for a variety of community and church groups across the state, joined in those calls. 

“To be clear, we want to see these projects happen,” Together Louisiana’s Erin Hansen said. “We want to see investment in our energy distribution system, in our transmission system, but the filing that was made [last week] really doesn’t allow time for public understanding. There’s no bill impact analysis, there’s no explanation of how the projects were chosen, what reliability impacts we can expect them to produce and why these investments produce more benefit at a lower cost than the alternative.”

Just four days after submitting its plan, Entergy requested the Public Service Commission approve it when its members met in the city of Many, in Louisiana’s Toledo Bend area near the Texas border. The PSC typically convenes monthly in Baton Rouge but periodically holds meetings around the state. 

Entergy’s filing caught many off guard.

“This is a wholly undemocratic process,” Lake Charles resident James Hyatt said. “I understand this has been going on a few years… but Monday is when they applied for this, Wednesday is when it was added to the agenda, and Friday is the day y’all are being asked to vote to approve $1.9 billion… Why does it have to be voted on in such a quick manner?”

Plan approval precedes shareholder meeting

Repeating claims he made days before the meeting, Lewis said he suspects Entergy simply wanted to secure the rate increase to be able to deliver good news to its shareholders who are scheduled to review the company’s electricity rate increases and earnings this week.

Entergy Louisiana’s parent company, Entergy Corp., reported $2.36 billion in earnings last year, a 47% increase from 2022. 

Entergy Louisiana reported $1.2 billion in 2023 earnings, a year-over-year increase of $417 million. Higher retail electric prices and lower operation and maintenance costs, including reduced health costs for its employees, were behind the increase, according to U.S. Securities and Exchange Commission filings. 

Entergy Louisiana executives at Friday’s meeting did not directly address Lewis’ claims, but they did push back on the idea that the filing should surprise anyone. Hand, the company’s vice president of regulatory affairs, noted all projects in the final proposal were also in the original filing 16 months ago. The plan “is not something that fell out of the sky,” he said. 

Hand also urged the commission to not postpone the decision because there is little time left before hurricane season, which starts June 1. 

“We are about 45 days before hurricane season and we need to get moving soon, and that’s why we want to bring this forward and get it to a vote,” he said. 

Hand’s argument fell flat when Lewis asked how many of the projects would be under construction by June 1. 

“I can’t say any will be, but I also can’t say absolutely none will be,” Hand said. “…More importantly, I’m thinking about storm season next year.” 

Before Lewis could respond, Entergy Louisiana CEO Phillip May took Hand’s microphone and pivoted the discussion to economic development.

“While we can’t say with certainty that any project will begin before June 1, what we can say is the state has an enormous opportunity of economic development,” May said. “And those folks who are deciding whether or not to invest in the state of Louisiana… they want to see a sign that their concerns are taken seriously and we’re going to build a grid that gives them confidence to make these investments.”

Commissioner Craig Greene, R-Baton Rouge, gave his full support to the grid-hardening plan, saying it is long overdue and badly needed. 

Entergy executives said the cost of the plan will be added to customers’ monthly bills over a five-year period. On average, the average customer can expect a fee of less than a dollar per month beginning in 2025, and that amount is expected to increase exponentially as time progresses until it reaches roughly $8 per month during the final year of the plan.

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