Alliance preliminary analysis of Entergy's plan for Energy Smart, update from July 9 public meeting

July 9 - According to an initial analysis by the Alliance for Affordable Energy, the Energy Smart plan put forth by Entergy New Orleans (ENO) is still a long way from being the energy efficiency program New Orleans deserves. The Alliance stands ready to supply case studies and national best practices to help ENO improve their proposal, which was released on their website July 2. As a voice for Entergy customers, the Alliance has supported the creation of a citywide energy efficiency program for more than 20 years. However, Alliance directors say ENO's current plan is lacking in a number of key areas.

“The guiding principles of this plan should be to lower customer's utility bills by reducing demand,” says Forest Bradley-Wright, Sustainable Rebuild Director of the Alliance for Affordable Energy. “A successful program would create good jobs for New Orleans residents and a sustainable energy efficiency market while reducing greenhouse gas emissions. While Entergy put a good deal of effort into this plan, in its current state it falls short in these areas.”

Another area of concern is the relationship between the Energy Smart program and the Integrated Resource Plan (IRP) that the City Council is developing with Entergy New Orleans. “It is not our opinion, nor understanding, that the Integrated Resource Plan would be guided by the Energy Smart proposal design,” says Alliance Regulatory Affairs Director Karen Wimpelberg. “Rather, it should be the reverse.  Goals and targets for energy savings established in the IRP must guide the programs that make-up the Demand Side Management part of the IRP, including Energy Smart.”

Alliance directors say Entergy New Orleans' conflict of interest interferes with their ability to design an effective plan for New Orleans residents. “Utilities make their money by selling more electricity, not by helping customers save it,” says Wimpelberg. “Until we can resolve that conflict by separating a utility's profits from the amount of electricity they sell, it will be necessary for the public and the regulators to take a strong role in insisting ENO correct deficiencies in their efficiency programs.”

If properly designed, EnergySmart can have a good impact on climate change from Global Warming. “When we save energy, we 'save' the greenhouse gas pollution that comes from making that energy,” says Alliance Climate and Clean Energy Director John Atkeison. “These greenhouse pollutants keep heat in the climate and in weather systems which causes our climate to change. One of the many changes is that hurricanes get bigger and stronger. As we were recently reminded by climate scientist and hurricane expert Dr. Kerry Emanuel, Hurricane Katrina got the extra strength it needed to break the levees from the additional heat from Global Warming.”

Fortunately, the Alliance is identifying a number of excellent examples around the country that show how energy efficiency can work to lower customer bills, create good jobs and reduce greenhouse gas emissions. With $11 million to spend on the program from the Entergy rate case, there is no excuse for inadequacy. “New Orleans deserves nothing less than the best energy efficiency program possible,” says Bradley-Wright. “It will take diligent efforts from all of us – the Alliance, the City Council, concerned citizens and Entergy New Orleans – to get this plan where it needs to be.”

Update from July 9 public meeting

Over 100 people attended the July 9 public meeting, taking all the seats in the auditorium in the Lindy Boggs Center, including some contractors and vendors who were interested in the program. Participants asked some excellent questions, many of which were not adequately answered. After attending this meeting, the Alliance still has the above concerns about ENO's design for the Energy Smart program. And while Entergy officials spoke about sustainability, the program as currently designed does not appear to produce anything but planned obsolescence in the energy efficiency industry.

A major concern is the absence of finance mechanisms in the existing plan. There is currently no finance system to account for up-front costs to New Orleans residents. After looking at a number of energy efficiency programs across the nation, we have come to the conclusion that leveraged financing is essential for the creation of good jobs for the long term and a sustainable energy efficiency industry. A year ago, in City Council Resolution #R-08-366, which created Energy Smart, leveraged financing was acknowledged as a central component of the program.

One form of leveraged financing is a revolving loan fund so that residents can pay for improvements out of the savings in their energy bills. Entergy seems open to hearing about these financing options and there is time to influence program design. Entergy officials also mentioned their interest in Act 348, recently signed by Governor Jindal (see previous article).

New Orleans City Council advisors are insisting that the council will now set the goals and targets that they feel are appropriate after they have looked at the Entergy program. However, we would like to know what they will base those goals and targets on.

We have an opportunity to create good jobs for New Orleans while reducing customer bills and greenhouse gas emissions. New Orleans deserves nothing less.

(photo: Alliance Sustainable Rebuild Director Forest Bradley-Wright asks questions of Entergy at the public meeting)