NEW ORLEANS — Entergy New Orleans executives appeared before the New Orleans City Council's Public Utilities Committee, seeking support for a resolution that would permit the company to sell off its natural gas operations.
"This transaction means lower costs for customers in the long run, and it means improved reliability and service and more jobs for our community," ENO CEO Deana Rodriguez said. "It also means that Entergy New Orleans can focus all our efforts into continuing to provide affordable electricity for this community."
ENO has been negotiating for about a year to spin off its gas business to Delta Utilities. The company is an affiliate of Bernhard Capital Partners, a private equity firm based in Baton Rouge.
"We're excited about this opportunity moving forward and we can't wait to get started," Delta Utilities CEO Tim Poche said. "Once the transaction is closed in the middle of next year it will be what we hope will be a seamless process for the customers."
Under a deal now on the table, gas rates would remain unchanged for at least the next two years, all current Entergy gas employees would be hired by Delta, and Delta would create at least 100 new jobs. The company also agreed to establish its headquarters in New Orleans.
Dozens of opponents expressed concern about what the sale could mean for the city's clean energy goals and potential bill increases down the road.
"Delta is a private equity company and in literally every case, when a private equity company takes over a business, they cut as much as they can like a corporate chop shop, and they raise prices for customers as much as they can get away with," said Jack Reno Sweeny from the New Orleans chapter of the Democratic Socialists of America.
"I invite any one of you to explain to the public here present how the perpetuation of a fossil fuel distribution system with its direct contribution to climate change is not relevant to the question of public interest in this decision," said Jessie George from the Alliance for Affordable Energy.
Delta currently serves approximately 600,000 natural gas customers across Louisiana and Mississippi. According to the company, the 1.7-billion-dollar enterprise has already leased 49,000 square feet of office space in the Central Business District.
"This transaction represents a vital step forward in strengthening our community's economic foundation, fostering new jobs and wealth, that's leading to generational wealth opportunities for citizens," said Josh Tatum from GNO, Inc.
Entergy said it would use proceeds from the sale to invest in its electrical grid. "Some of it will go to grid hardening," Rodriguez said. "Some of it will go to reliability. Some of it will support our general business operations."
Following a lengthy hearing, the committee voted 4-0 to approve the sale. The full council is now expected to approve the deal as early as this week.
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