BATON ROUGE (AP) — Louisiana utility regulators agreed Wednesday to merge two subsidiaries of New Orleans-based Entergy Corp. into one company that provides electricity to more than 1 million customers around the state.
The Public Service Commission voted 4-1 for the consolidation of Entergy Louisiana and Entergy Gulf States Louisiana. The single utility company, with over $16 billion in assets, will be called Entergy Louisiana when the merger takes effect in October.
Phillip May, president and CEO of the two Entergy companies to be merged, said the combined utility will save customers at least $107 million over nine years. That's estimated to be between $10 and $11 in savings for an average customer over the first year, tapering off in later years since the savings are front-loaded.
The lower costs are expected to start showing up on customer bills on Dec. 1, May said.
He said the consolidation will cut administrative and regulatory costs and lessen some expenses of $5 billion in planned upgrades and expansion projects in the coming years. But May said the merger won't force layoffs or compensation changes for workers.
"The combination of these two companies provides a much larger, much stronger company," May said. "The combination benefits our customers, benefits our employees, benefits our communities that we serve."
Customers shouldn't notice much difference. Base utility rates won't change, according to Entergy. The savings on utility bills will be modest. And the two Entergy units have worked as a largely combined company for years.
The merger will mean two Entergy companies serve Louisiana customers: Entergy New Orleans, which is regulated by the city of New Orleans, and Entergy Louisiana, which is regulated by the Public Service Commission.
The new merged Entergy Louisiana will cover electric service to 1.1 million customers across southern, central and northeastern Louisiana and natural gas service to 93,000 customers in the Baton Rouge area.
Approval from the PSC was the last vote needed for Entergy to move ahead with the transaction, May said, after federal officials already had signed off on the merger.
Commission member Foster Campbell, who represents north Louisiana, voted against the consolidation after raising concerns that Entergy units shouldn't be charging customers in northern parishes to repair storm damage from hurricanes that strike south Louisiana.
"I think we ought to have some different kind of treatment. I think we're paying for storms that we don't have," Campbell said.
– by AP Reporter Melinda Deslatte
