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Stories Added - April 2009
Copyright 2008 - Polk County Publishing Company
Entergy to move forward in recovering Hurricane costs through ‘securitization’
Tyler County Booster - April 2009
Woodville – Gov. Rick Perry on Thursday signed a bill allowing Entergy Texas, Inc. to recover costs it incurred to restore service after the devastation caused by hurricanes last year. The bill allows recovery of these costs through a process known as “securitization.” As a result of that bill, Entergy Texas will soon file a case with the Public Utility Commission of Texas to request recovery of the approximately $577 million in system restoration costs. The company will first file a case with the PUCT to set the amount that it will be authorized to recover. Soon thereafter, Entergy Texas will file a second case to allow the company to securitize those costs. Securitization makes highly- rated bonds available at lower interest rates to pay storm costs.
Through securitization, customers are estimated to save about $195 million as a result of the lower interest rates. Entergy Texas last year was first hit with the expense of preparing for Hurricane Gustav, which eventually impacted Louisiana. Southeast Texas was, however, an early target with evacuations called for and response activities well under way before the storm turned east. Less than two weeks after Gustav hit, Southeast Texas was hit by Hurricane Ike, which struck a devastating blow to the upper Texas Gulf Coast. When the cost recovery case is filed with the PUCT, other parties will be able to weigh in and eventually a hearing will be held after which the PUCT will determine the amount to be recovered. Cost recovery for the two hurricanes is expected to add a monthly charge of about $5.25 per 1,000 kilowatt-hour residential bill, which assumes a 15-year cost recovery period.
Entergy Texas, Inc. provides electricity to 396,000 customers in 27 counties. It is a subsidiary of Entergy Corporation. Entergy Corp. 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, and is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $13 billion and approximately 14,700 employees.