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: , , ,

From the ArkTimes store

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

Readers also liked…

  • Tom Cotton suggests Dick Cheney as House speaker

    Yes. U.S. Sen. Tom Cotton told Politico he'd like to see Dick Cheny as House speaker.
    • Oct 12, 2015
  • AHTD asks Metroplan to lift six-lane freeway cap

    The board of directors of Metroplan has informed the state highway department that it cannot act on the highway department's June 17 request to lift its six-lane freeway cap at the board's June 29 meeting. Consideration of the request should take four months, Jacksonville Mayor Gary Fletcher wrote June 22 to highway department Director Scott Bennett.
    • Jun 23, 2016
  • From Dallas, creative thinking about the Interstate 30 project

    An urban planner in Dallas says freeways are not always the answer. Incorporating some creativity already being used in Dallas and looking at the Interstate 30 project from a broader perspective, here are ideas that Arkansas highway planners have not considered. But should.
    • Nov 6, 2015

Most Shared

  • Conspiracy theorists

    Back in 2000, I interviewed Rev. Jerry Falwell on camera in connection with a documentary film of "The Hunting of the President," which Joe Conason and I wrote.
  • The health of a hospital

    The Medicaid expansion helped Baxter County Regional Medical Center survive and thrive, but a federal repeal bill threatens to imperil it and its patients.
  • Virgil, quick come see

    There goes the Robert E. Lee. But the sentiment that built the monument? It's far from gone.
  • Real reform

    Arkansas voters, once perversely skeptical of complicated ballot issues like constitutional amendments, have become almost comical Pollyannas, ratifying the most shocking laws.
  • That modern mercantile: The bARn

    The bARn Mercantile — "the general store for the not so general," its slogan says — will open in the space formerly occupied by Ten Thousand Villages at 301A President Clinton Ave.

Visit Arkansas

Paddling the Fourche Creek Urban Water Trail

Paddling the Fourche Creek Urban Water Trail

Underutilized waterway is a hidden gem in urban Little Rock

Most Viewed

Most Recent Comments

Blogroll

Slideshows

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation