Entergy Services, LLC 39 Loyola Avenue (70113) P.O
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Entergy Services, LLC 39 Loyola Avenue (70113) P.O. Box 61000 New Orleans LA 161 1000 Entergy el 504 576 2603 ax 504 576 5579 [email protected] D. Sky ar Rosenbloom SenI 0rCounse LegaI Services -ReguIatory (³ October 14 2020 REc ED VIA HAND DELIVERY oct 1 4 2020 Brandon Frey ' Louisiana Public Service Commission |_A Pub Inc ServlµFe Commission Galvez Building, 12th Floor 602 North 5th Street Baton Rouge, LA 70802 Re: Entergy Louisiana, LLC, Ex Parte. Application of Entergy Louisiana, LLC for Approval of Ratemaking Adjustment for Interim Hurricane Laura Financing, and Request for Expedited Treatment (LPSC Docket No. U- ) Dear Mr. Frey: I have enclosed the original and three copies of the Application of Entergy Louisiana, LLC ³(//´ for Approval of Ratemaking Adjustment for Interim Hurricane Laura Financing, and Request for Expedited Treatment (the ³$SSOLFDWLRQ´ This ¿OLQJ includes the Direct Testimony and Exhibits of Phillip R. May and Sarah M. Harcus. In addition to the substantive reliefrequested in the Application, ELL is also requesting that the Commission move and vote to exercise its original and primary jurisdiction pursuant to and or in accordance with Rule 57 of the &RPPLVVLRQ¶V Rules of Practice and Procedure and other authorities and take this matter up at the &RPPLVVLRQ¶V November 2020 Business and Executive Session. ELL further requests that the Commission establish a 10-day intervention period in this matter. Finally, ELL respectfully requests that notice of this ¿OLQJ be published in the &RPPLVVLRQ¶V 2I¿FLDO Bulletin on October 16, 2020. Please retain the original and two copies for your ¿OHV and return a date-stamped copy to me in the enclosed stamped self-addressed envelope. If you have any questions, please do not hesitate to call me. Thank you for your courtesy and assistance with this matter. Respectfully submitted, D~ Sk)'lal' Rosenbl o ROUTE FROl\.. ROUTE TO ddm DEPT. Enclosure DATE DEPT. _%=-E cc: Commissioners (via e-mail) DEPT. DATE DEPT. DEPT. DATE DEPT. DEPT. DATE 0¶ DEPT. BEFORE THE RECE VED LOUISIANA PUBLIC SERVICE COMMISSION ?OOS 1 4 ?OO(S ' ' ~ ³³ &³ 6V µRQ ENTERGY LOUISIANA, LLC, EX LA 3´E³ PARTE. APPLICATION OF ENTERGY LOUISIANA, LLC FOR APPROVAL OF RATEMAKING ADJUSTMENT FOR DOCKET NO. U- INTERIM HURRICANE LAURA FINANCING, AND REQUEST FOR EXPEDITED TREATMENT \./\./\/\/\/\/\/ APPLICATION OF ENTERGY LOUISIANA, LLC FOR APPROVAL OF RATEMAKING ADJUSTMENT FOR INTERIM HURRICANE LAURA FINANCING, AND REQUEST FOR EXPEDITED TREATMENT Entergy Louisiana, LLC ³(//´ or the ³&RPSDQ\´ respectfully ¿OHV this Application for Approval of Ratemaking Adjustment for Interim Hurricane Laura Financing, and Request for Expedited Treatment (the µµ$SSOLFDWLRQ¶¶ with the Louisiana Public Service Commission ³/36&´ or the ³&RPPLVVLRQ´ for approval of a ratemaking adjustment that will facilitate (//¶V efforts to ¿QDQFH on an interim basis, the VLJQL¿FDQW costs of restoring its electric utility system after the extreme damage caused by Hurricane Laura. 6SHFL¿FDOO\ ELL has determined that issuing short- term bonds to provide temporary ¿QDQFLQJ of Hurricane Laura restoration costs will serve the interests ofthe &RPSDQ\¶V customers and other stakeholders, and it requests that the Commission approve and issue an order acknowledging that short-term debt up to $700 million issued by ELL to fund Hurricane Laura restoration costs on an interim basis should be excluded from the On October 1, 2015, pursuant to Louisiana Public Service Commission Order No. U-33244-A, Energy Gulf States Louisiana, L.L.C. ³/HJDF\ (*6/´ and Entergy Louisiana, LLC ³/HJDF\ (//´ combined substantially all of their respective assets and liabilities into a single operating company, Entergy Louisiana Power, LLC, which subsequently changed its name to Entergy Louisiana, LLC (122,, ³(//³ ³%XVLQHVV &RPELQDWLRQ³ Upon consummation of the Business Combination, ELL became the public utility that is subject to LPSC regulation and now stands in the shoes of Legacy EGSL and Legacy ELL. &RPSDQ\¶V capital structure for ratemaking purposes? The preliminary estimate of (//¶V total restoration costs for the repair and/or replacement ofthe electrical facilities damaged by Hurricane Laura is $1.25 billion to $1.4 billion, and time is of the essence in securing interim ¿QDQFLQJ Accordingly, ELL respectfully requests that the Commission consider this Application under its original and primaryjurisdiction, expedite this Docket, and provide the approvals requested herein at the &RPPLVVLRQ¶V November I8, 2020 Business and Executive Session. The &RPSDQ\¶V need for timely relief from the Commission has been underscored by additional damage caused by Hurricane Delta. As a result, ELL also is requesting that the Commission put in place a mechanism to increase, at (//¶V request, the amount of short-term debt that can be excluded for ratemaking purposes if further issuances are used for interim ¿QDQFLQJ of Hurricane Delta restoration costs. Introduction 1. Hurricane Laura was the most devastating weather event to ever strike (//¶V utility system. It came ashore on August 27, 2020, as a strong Category 4 hurricane with sustained winds speeds of I50 mph. The nature and magnitude of the damage LQ¿LFWHG in Southwest Louisiana were very different from the experiences with past hurricanes that impacted (//¶V service area. In fact, the damage was so severe that it was more consistent with destruction caused by a tornado but across a much wider path. II. The destructive force of Hurricane Laura was not limited to Southwest Louisiana. The storm continued across (//¶V service area, arriving in Central and North Louisiana as a Category Throughout this Application, ELL uses the phrases ³VKRUWHUWHQQ GHEW´ and ³VKRUWWHUP debt" to refer to debt issuances having maturities between one and ¿YH years. 2 and Category 1 storm, respectively. The sustained power of the storm as it moved through Louisiana damaged utility infrastructure on a scale not experienced with prior hurricanes. III. Hurricane Laura caused nearly 455,000 total ELL customer interruptions. As of Friday, September 25, ELL had successfully restored all but approximately 3,000 customers who were impacted by the storm. As of Friday, October 2, ELL had restored all accessible customers who could safely take power. However, efforts to fully repair and restore the transmission system are expected to continue into the fourth quarter of 2020. IV. The nature and extent of Hurricane /DXUD¶V damage to the electric transmission and distribution systems made this storm restoration as GLI¿FXOW and challenging as Entergy has ever faced. To meet the challenges, the Entergy Operating Companies ³(2&V´ deployed the largest restoration effort ever mobilized in company history, with more than 25,000 workers from 31 states. In addition to employees of ELL and its DI¿OLDWHV the workers came from more than 230 companies, including 24 other electric utilities. These workers included scouts, ¿HOG workers, vegetation workers, and support staff. V. The Hurricane Laura restoration was the ¿UVW large-scale disaster response that required an EOC to implement COVID-19 safety protocols. Increased costs associated with those safety measures, including lodging and personal protection equipment, are included in (//¶V preliminary estimate of total Hurricane Laura restoration costs. The ¿YH OCs are ELL, ntergy Arkansas, LLC; Entergy Mississippi, LLC; Entergy Texas, Inc.; and Entergy New Orleans, LLC. Restoring service and rebuilding utility infrastructure damaged by Hurricane Laura will cost VLJQL¿FDQWO\ more than the $732 million in restoration costs that Legacy ELL and Legacy EGSL incurred (and the Commission approved for recovery) after Hurricanes Katrina and Rita in 2005. Accepting, however, that hurricanes are a ³ZKHQ´ and not an ³LI´ proposition for Louisiana, the Commission and ELL have worked collaboratively in the intervening years to prepare for major stomis and to provide for recovery of prudently incurred restoration costs. Accordingly, ELL had approximately $250 million in Commissioned-approved storm escrows when Hurricane Laura made landfall in Louisiana. ELL intends to draw down those reserves in order to provide temporary liquidity as it plans for permanent ¿QDQFLQJ of storm restoration costs. For permanent ¿QDQFLQJ as it has in the past, ELL will consider Securitization of the entire amount of Commission-approved stomi restoration costs through the Louisiana Electric Investment Recovery Securitization Act ³$FW ´ La. R.S. 45:l251-1261, ¿QDQFLQJ of the entire amount of Commission-approved system restoration costs through the Louisiana Restoration Corporation Act ³$FW ´ La. R.S. 45:l3l l-1328, or any other viable ¿QDQFLQJ method that is cost effective for customers. The ¿QDQFLQJ path chosen by ELL will be based on the method that is expected to result in the lowest cost for customers and will be subject to Commission review and approval. VII. Because the process for obtaining LPSC approval to recover and to pemianently ¿QDQFH reasonable and necessary stom1 restoration costs has taken up to 18 months, and the &RPSDQ\¶V storm reserves will not be VXI¿FLHQW to meet (//¶V liquidity needs in the interim, ELL intends to issue up to $700 million in shorter-temt ¿UVW mortgage bonds to provide temporary ¿QDQFLQJ until the Commission can conduct appropriate proceedings to review the restoration costs and issue ¿QDQFLQJ orders. This plan will reduce interim carrying costs to the EHQH¿W of (//¶V customers. Considering the magnitude of the planned borrowing, however,