Entergy to pay $5 million penalty for secretly using phony supporters for New Orleans project

Published 9:03 pm Thursday, February 21, 2019

A utility giant will pay a $5 million penalty in the wake of a scandal over the use of paid, phony supporters for a new $210 million gas fired power plant, but it will also be allowed to go ahead with construction of the plant, the New Orleans City Council unanimously decided Thursday.

Entergy New Orleans, which is part of Entergy Corp., agreed to pay a $5 million penalty after revelations that its subcontractors secretly paid people to fill seats and speak in favor of the project at public hearings. But their agreement was contingent on the council not revoking its prior approval of the plant.

A council-led investigation found that Entergy New Orleans officials “knew or should have known” about the use of phony supporters.

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Opponents filled dozens of seats at Thursday’s meeting and dominated testimony. They said they were worried about rate increases that will follow construction of the estimated $210 million plant. They also said they feared emissions from the gas-fired plant in eastern New Orleans will cause health problems.

And they said the penalty of $5 million was too low.
Supporters of the plant touted it as more efficient and cleaner than a former plant that was put out of service years ago in the same area. They stressed that it would not be used around the clock, but to provide power at times of peak demand.

And council members and city advisers defended the penalty amount as substantial — yet low enough to avoid drawn out litigation with the utility.

“I am deeply disturbed by ENO’s conduct of astroturfing,” council member Jared Brossett said, using a common slang term for phony grassroots support. But he said the need for reliable power, together with Entergy New Orleans’ assurances of help for water system power and other benefits, drew his support.

“Peak demand power outages can last for several hours or several days,” council member Helena Moreno said, calling that a danger during hot summer months.

Council chambers were not full but opponents dominated the crowd for much of the meeting. Still, there were supporters among the speakers. “It does not work out well for us when we do not have reliable power,” said city resident Derrick Martin.

But supporters were outnumbered by a series of opponents. Rev. Greg Manning compared Entergy’s campaign in support of the plant to a “war” on the African-American and Vietnamese-American communities of eastern New Orleans.

“We do not want the gas plant anywhere in our neighborhood,” one Vietnamese woman, speaking through an interpreter, told the council.

The project won council approval last March. But, the paid supporter scandal gave new life to the plant’s opponents.

The settlement includes a requirement that Entergy New Orleans management undergo ethics training. It calls for Entergy to submit emissions data on the plant to the council and post it online.

It also calls for Entergy to work with the city to provide more reliable power for the city’s troubled street drainage and drinking water system.

The New Orleans Sewerage and Water Board, which operates those systems, has suffered myriad problems including outages in parts of its own antiquated power system.

Loss of power to drainage pumps has led to street flooding, and loss of power for the drinking water pumping system has led to low water pressure and periodic “boil water” orders for parts of the city.