High electric bills tied to cold weather

Residential customers in south Louisiana are being shocked by electricity bills they are receiving this month that are, on average, about 50 percent more than usual.

Scott Angelle says his Louisiana Public Service Commission office has heard tales of bills doubling in one month’s time. The PSC regulates privately owned utility companies that provide power to about 2 million customers in Louisiana.

The reason for the high bills is twofold.

Partly, it’s because the price of natural gas has gone up. Mostly, it’s because January was abnormally cold.

State government shut down for seven days during January. Schoolchildren stayed home. Interstate 10 was closed. Even the Ray Nagin trial in New Orleans was postponed. People unaccustomed to sustained frigid temperatures hunkered down.

“In Louisiana we deal more with warm weather. These extremes, when they do happen, often complicate life,” said Angelle, of Breaux Bridge.

“Disproportionate energy bills kind of make it tough for folks who all of a sudden have to pay a bill that is one to one and half times more than they expected,” Angelle said.

People used more electricity during January and those bills have been arriving in mailboxes for the last couple weeks and will continue arriving for next couple.

The 700,000 Entergy Louisiana LLC customers living in 46 parishes, for instance, used 17.7 percent more electricity in January 2014 than they did during the same month in 2013.

The difference between bills over a single month also is dramatic.

The 169,000 electricity customers of Entergy New Orleans Inc. used 41 percent more electricity in January than in December. ENO’s 100,000 customers of natural gas increased their consumption by 70 percent over the one-month period.

Entergy Corp. has three subsidiaries that sell power to about roughly half the state’s buyers of electricity.

“The reality is if you compare the average temperatures, we’re 20 percent colder than even the norm; more like 40 percent cooler than last year,” said Tom Peters, senior region manager for Entergy Gulf States Louisiana L.L.C. “The thing we advise people is to keep the thermostat at 68 degrees. Every degree above 68 adds 3 percent to your bill.”

The trend nationwide is for customers using less electricity because of more energy efficient appliances and better conservation, said Andrew Duhon, support services manager for Lafayette Utilities System. Because LUS is operated as a department of city-parish government, it is not regulated by the PSC. The utility serves 65,000 customers.

Nevertheless, Duhon said the LUS has increased sales. “I attribute that to the weather,” he said.

“We’ve been monitoring the situation,” said PSC Chairman Eric Skrmetta, of Metairie. “There have been some increases in fuel costs, but this is based more on consumption.”

Basically, the monthly bill includes an “energy charge,” which is the sum of the costs of making and moving the electricity, plus a profit of about 10 percent, divided by the number of customers. The rate is then multiplied by the amount of kWh, or kilowatt hours of electricity, the customer used during a given month period. The bills are rolled out throughout the month as the meters are read.

Some customers, Cleco’s Robyn Cooper explains, will have higher bills this month because the meters were read during a time that grouped more of the cold days. Eventually every bill will reflect the higher usage during January and early February. Cleco serves parts of Acadiana and the north shore.

Monthly bills also include some fees. But the next largest item on the invoice is called the “fuel adjustment clause.”

Customers are required to pay, without a profit added, the cost of the fuel used to run the generators that make electricity. That cost also is divided by the number of customers and multiplied by the amount of power used each month.

Nuclear rods and coal make a lot of the electricity in Louisiana. But this state relies mostly on natural gas. Also, many south Louisiana homeowners use natural gas to heat their residences.

The price of natural gas was about $3.30 mcf in January 2013 and was $4.70 mcf in January 2014. An mcf is a thousand cubic feet, which how natural gas is sold.

For instance, a typical residential customer of Entergy Gulf States Louisiana L.L.C. paid $87.01 for 1,000 kWh in January 2013. A kilowatt hour is the unit used to measure and sell electricity.

The same amount of electricity in January 2014 cost $94.93. The “energy charge” was the same for both months. But the “fuel adjustment clause” rose over the year, increasing by $7.25 from $28.49 to $35.74, according to disclosures filed with the PSC.

“It’s all about usage. Your heater is constantly fighting the temperature outside,” said David Latona, manager of member relations for Dixie Electric Membership Corp., better known as DEMCO. The utility has about 102,000 customers in Baton Rouge and its suburbs.

DEMCO, like the other privately owned utility companies, offer levelized billing that allows the customers to average out their monthly bills and pay a consistent amount each month. Additionally, programs are available for low income customers through various state and local agencies, he said.

The homes in south Louisiana are not built for prolonged bouts of cold and wet weather. “The ground is cold and the concrete slab (foundation) stays cold. I can feel it when I step out of bed in the morning,” Latona said.

Casey DeMoss Roberts, of New Orleans, agrees.

“My house was built in the ’30s. I have no insulation in the walls or on the floors,” Roberts said. She is executive director with the Alliance for Affordable Energy, a New Orleans-based consumer group that lobbies utilities and regulators.

But an energy efficiency program her group has pushed is designed to help homeowners by offering rebates for the purchase of energy efficient appliances and renovations, such as tighter windows and more insulation.

The program is three years old in New Orleans and is called “Energy Smart.” It went statewide in September and by the end of the year the rebate system will be running, she said.