New Orleans fines Entergy $5M over actors paid to support gas plant
- The New Orleans City Council yesterday slapped Entergy with a $5 million fine — the largest ever imposed by the council — over the utility's role in paying for people to show up and support a proposed power plant at local hearings.
- Entergy hired public relations firm Hawthorn Group, which contracted with Crowds on Demand to hire actors to pose as citizens supporting the New Orleans Power Station (NOPS) at public hearings. While the utility says it did not know about the actors, an independent report concluded Entergy "knew or should have known."
- Entergy officials during an earnings conference call Tuesday did admit the company would have benefited from "better oversight and asking the right questions."
Entergy will have 30 days to argue why the City Council fine should not stand, and is already saying the conclusions of the independent investigation are incorrect.
"We take exception to certain characterizations and key omissions in the report, like the Hawthorn Group's written admission that they took these actions without our knowledge," Entergy Chairman and CEO Leo Denault said during Tuesday's earnings call. "There are no facts that support the conclusion that Entergy employees knew about the hiring of Crowds on Demand or their payments to individuals to show support for the New Orleans power station."
But he went on to concede that "better oversight and asking the right questions" could have avoided the situation, and said "we continue our effort to regain the trust and confidence of the citizens of New Orleans and the Council."
The Sierra Club was not impressed by the fine.
"A $5 million fine is not a remedy for what went wrong with the public process," said Susan Miller, attorney for Earthjustice. "This report makes it clear that Entergy violated the law, and the law now requires the Council to hold a new hearing and re-vote on the decision to approve Entergy’s gas plant."
New Orleans City Council has said it may reconsider approval of the 128-MW gas plant.
In May, Entergy issued a report of its own that concluded the company "did not pay, or authorize any other person or entity to pay," supporters of the NOPS project. Texts and emails revealed in the city council's investigation, however, cast doubt on those assertions.
Separately, the city council said that an inquiry into "repeated daylight power outages" and Entergy New Orleans' operation of their distribution system will culminate in a "prudence investigation" to determine whether the utility failed to properly maintain its distribution system.
The council said that investigation could also result in fines and penalties for the company.
During the earnings call, Denault also discussed decommissioning the Vermont Yankee nuclear plant. The U.S. Nuclear Regulatory Commission recently approved the transfer of the plant's operating license from Entergy to NorthStar in a plan to speed decommissioning and restoration of the shuttered power plant.
Denault told analysts and journalists on the call that the sale of the plant will benefit stakeholders and the industry "by accelerating the decommissioning timeline, drawing on industry-leading decommissioning and site remediation expertise and experience, and laying the foundation for potential future business development opportunities in the regions."
Entergy said it hopes to complete the deal, which still requires approval by the Vermont Public Utility Commission, by the end of the year.
- New Orleans City Council Independent External Investigation
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