Monday, December 31, 2012

The morning report: You pay for storm cleanup

Posted By on Mon, Dec 31, 2012 at 6:43 AM

THE COST OF DOING BUSINESS: Linemen at work; customers eventually will reimburse cost.
  • Entergy
  • THE COST OF DOING BUSINESS: Linemen at work; customers eventually will reimburse cost.
The number without power has been dramatically reduced (to 11,400 by 8 a.m., Entergy says). But, gee, that's small consolation for the thousands still in the dark, nearing a full week after the power went out.

Repair crews soldier on. One small point: I noted a line in the newspaper today saying that the cost of all this falls on Entergy. They indeed put up the money, but, eventally, ratepayers pay.

Utilities are allowed to charge ratepayers for repairing storm damage. Sometimes it comes in the form of a surcharge after insurance payments have been made. (See Louisina after hurricane cleanup.)

Ratepayers are already paying into an accrual fund for disruptions. The damage can sometimes exceed reserves, such as last year in Mississippi, when Entergy asked for a rate increase to cover storm damage.

In Arkansas in 2000, the method of covering Entergy's costs for ice storm cleanup became the subject of some dispute. The Entergy/state plan used accumulated rate overcharges to pay for the cleanup. Some customers wanted to amortize the costs over 10 years in rates. In Louisiana, bond issues were floated (paid off by customer bills) to cover massive hurricane costs over time.

This is just a reminder: The repair work isn't charity or a permanent Entergy freebie. When the lights come on, we all appreciate the 16-hour days that linemen are putting in to restore power. But they are being paid for the overtime (plus significant expenses for out-of-state crews) and ratepayers will foot the bill, sooner or later. That's fair, given our expectations for reliable utility service as a living essential. But it's also worth remembering that unregulated businesses that don't operate as monopolies under state oversight don't have the same fallback when catastrophic events befall them. They can't always pass along unexpected costs to customers because they have competition who might not have been affected by the same catastrophe.

Tags: , , ,

Favorite

Speaking of...

Comments (12)

Showing 1-12 of 12

Add a comment

 
Subscribe to this thread:
Showing 1-12 of 12

Add a comment

More by Max Brantley

  • Arkansas Supreme Court denies rehearing in death penalty challenge, but delays mandate

    The Arkansas Supreme Court today refused to rehear the case denying Death Row inmates information about drugs used by the state in the lethal injection process.
    • Jul 21, 2016
  • Welspun layoffs: Another example of corporate welfare folly

    Layoffs at the Welspun pipe plant in Little Rock are a reminder of the folly of corporate welfare and the inability of Arkansas to separate itself from global economic forces. See the Fayetteville shale. And keep a watchful eye on that Sun Paper pulp mill proposed near Arkadelphia.
    • Jul 21, 2016
  • Hamburg bank manager gets 21 months for theft

    Melinda Gwin, 49, of Hamburg has been sentenced to 21 months in federal prison and ordered to repay $210,875 stolen from the First National Bank of Crossett. She was sentenced in El Dorado federal court, according to a Justice Department news release.
    • Jul 21, 2016
  • More »

Readers also liked…

  • The poor hit harder by local taxes; bottom 40 percent left out in Asa tax cut

    The poorer you are, the harder state and local tax burdens hit Arkansas taxpayers. And Gov. Asa Hutchinson's tax-cut plan won't do much to ameliorate that, giving no benefits at all to the bottom 40 percent of Arkansas taxpayers.
    • Jan 15, 2015
  • Is Arkansas planning to withdraw from PARCC, the Common Core testing consortium?

    Rep. Mark Lowery, a Republican from Maumelle, has introduced a bill that would put the brakes on Arkansas's implementation of standardized testing based on Common Core State Standards. Lowery says the bill is motivated in part because legislators have been told by ADE officials, unofficially, that "the PARCC contract will not be renewed" beyond the current academic year.
    • Feb 3, 2015
  • About 100 gather for student-led protest of LRSD state takeover

    The Little Rock School District Student Association (LRSDSA) is "dedicated to empowering students and making their voices heard," said Hannah Burdette, a Parkview High senior who is one of the founders of the group.
    • Feb 5, 2015

Most Shared

  • New book documents the work of visionary instrument-maker Ed Stilley

    Ed Stilley is one of those special, extraordinary visionaries who are driven to create. In Stilley's case, God was the driver and He told Stilley in 1979 to build acoustic  instruments for children.
  • Best of Arkansas 2016

    Readers elect their favorites.
  • Hillary hit jobs

    It's always been my conviction that if Hillary Clinton could be appointed president, she'd do a bang-up job. Getting elected, however, might prove more difficult.
  • These Hogs won't be thin

    This may be the strongest returning receiving corps that the Razorbacks have fielded in the post-Petrino days.
  • Trump-Putin 2016

    Among the thousand bizarre aspects of the presidential campaign has been the Donald Trump-Vladimir Putin axis.

Most Viewed

  • The Saturday line

    It's a day of domestic projects for the Times crew. We'll try to check in later, but for now here's an open line.

Most Recent Comments

  • Re: The Saturday line

    • Our well regulated American Militia has been engaged in training exercises this weekend it seems…

    • on July 30, 2016
  • Re: The Saturday line

    • Venezuela is resorting to forced agricultural labor to address its food shortages. http://money.cnn.com/2016/07/29/news/econo… Aren't price…

    • on July 30, 2016
  • Re: The Saturday line

    • The comment had a retraction by a paper ,but was restated 9 hours ago. The…

    • on July 30, 2016

Blogroll

 

© 2016 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation