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: , , ,


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

  • The arrival of autumn open line

    Here's the open line. Harvest Fest still happening in Hillcrest. Hog Roast tomorrow in North Little Rock in perfect weather.
    • Oct 22, 2016
  • Nasty women rise up against The Deplorable Donald

    It had to happen. Donald Trump's debate interjection that Hillary Clinton was a "nasty woman" has become a battle cry among women; a Twitter meme; a Facebook favorite, and, naturally, a marketing opportunity for T-shirt, button and bumper sticker makers.
    • Oct 22, 2016
  • Formal opposition emerges to Issue 3, the corporate welfare amendment

    It became apparent this morning that at least some money would be spent in opposition to Issue 3, a massive corporate welfare proposal to allow the state to pledge unlimited tax money to private projects and to allow local governments to also give money to private business and chamber of commerce lobbyists, a practice that has been ruled unconstitutional currently.
    • Oct 22, 2016
  • More »

Readers also liked…

  • Foster family disputes key statements from Justin Harris

    Craig and Cheryl Hart were the foster parents of the two sisters who were adopted by Rep. Justin Harris and his wife Marsha and later "rehomed." The Harts say that the adoption was allowed to proceed over the objections of the foster parents and local DHS staff due to pressure exerted by Cecile Blucker, head of the Division of Children and Family Services, on behalf of Justin Harris.
    • Mar 7, 2015
  • University of Arkansas education reformers receive grand prize for 'bunkum' in charter school reports

    The National Education Policy Center, a Colorado-based institution that is frequently opposed to the so-called "reform" movement embodied by the Walton-financed Department of Education Reform at the University of Arkansas, has issued its 2014 Bunkum Awards, which include a grand prize to the University of Arkansas for what it believes to be flawed research.
    • Mar 3, 2015
  • Policy group urges opposition to new charter seats in Little Rock

    The Arkansas Public Policy Panel is urging supporters of the Little Rock School District to tell state Board of Education members they oppose applications to be heard this week to dramatically expand the number of charter school seats in the Little Rock School District.
    • Mar 9, 2016

Most Shared

Most Recent Comments



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