Feeling proud of the City of New Orleans... for smart energy policy.

Residents of New Orleans famously love their city for all its color, life, soul, music, and rich heritage. The New Orleans City Council took action today that gives residents one more reason to feel good about the future of the city.

The City Council passed Resolution R-15-599 calling on Entergy New Orleans to plan its customer-facing efficiency programs to save electricity every year equal to 2 percent of the utility's annual sales. This is a smart move by the Council. It shows the Council and the local utility working together to plan responsibly for the future. It won't rescue the Saints from a bad season, but it will deliver big benefits to residents and make the city stronger, more efficient, and more resilient.

Big savings. To people unfamiliar with how utilities plan to deliver electricity to their customers, a 2 percent goal might ring small and modest. It's not. It's a big deal. Entergy New Orleans's current efficiency programs are expected to deliver energy savings of about 0.3 percent per year (based on 2015 sales), or about 18 million kilowatt hours of electricity, enough power for about 1,600 average homes every year.

The new 2 percent goal will mean more than 6 times the energy savings. Entergy New Orleans can devote more resources to help more customers repair and improve their houses, apartments, buildings and stores to hit this efficiency target.

How is this energy-savings goal put into practice? Since 2011, Entergy New Orleans has operated its EnergySmart programs. These programs offer customers financial incentives and assistance to install insulation in their houses, weatherize apartments, buy high-efficiency appliances, tune-up air conditioners, improve lighting in office buildings, and the like.

Entergy's success implementing EnergySmart programs is what gave the City Council a compelling case to grow the programs. The program results have proven the programs are good investments for everyone. Simply put, it is cheaper for Entergy to help a homeowner install insulation than to generate power that would be wasted in an uninsulated house.

Customers get lower bills and better houses, apartments, and offices after energy-related repairs and improvements are made. The improved houses, apartments, and offices are more energy efficient, more resilient, and in many cases, healthier (because the repairs reduce dangerous temperature swings, give residents better lighting, less dust, and can reduce mold).

A strong signal nationally. When Entergy New Orleans implements the plan called for by the Council, it will not only be big for New Orleans, it will send an important signal to cities, states, and utilities around the country. Entergy's many other customers in Louisiana and in other states might have in their future the benefit of more efficiency programs. Other cities, especially those in the South, will look to New Orleans as a model for how a utility and its regulator can plan responsibly together.

When implemented, this 2 percent goal should go a long way to push New Orleans into the top tier of American cities in terms of smart utility policies. Massachusetts, which was ranked #1 among the states in 2015 by the American Council for an Energy Efficient Economy, has an annual energy savings target of 2.6 percent. Maryland, ranked #7, has a 2.0 percent annual target. ACEEE's annual city ranking uses many factors, not just smart utility policies, and New Orleans in 2015 was ranked #47. The City Council's action today should change that.

This is leadership. The Alliance for Affordable Energy, a valuable New Orleans institution, deserves a lot of credit. Their great work, day in and day out, helps the city, the state, and its residents create a better future by building consensus for smart energy solutions. The Alliance worked with local partners, including Green Coast Enterprises, to help the City Council understand how EnergySmart programs can meet the more ambitious energy savings goal. Another partner, the Greater New Orleans Housing Alliance (a group of affordable housing owners and operators) showed the Council how New Orleans's many residents of affordable housing could benefit from EnergySmart programs tailored to reach renters.

And, Entergy New Orleans has been a constructive partner in the planning process, which we expect to continue.

This City Council action is not complete. Entergy New Orleans must submit a plan (known as an IRP, or Integrated Resource Plan) consistent with the Council's directive, the Council must approve it, and the programs must be implemented over a many year period. Today's vote, however, is a signal action of leadership and vision. We look forward to working with our friends and partners in New Orleans to make our smart energy future a reality.

About the Authors

Philip Henderson

Senior Financial Policy Specialist, Center for Market Innovation

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