Entergy New Orleans agreement allows allocation of $200 million CDBG funds

By Caroline Salls

Pittsburgh, April 12 - Entergy New Orleans, Inc. requested court approval of an agreement with Louisiana's Office of Community Development that will allow the company to receive and use $200 million in Community Development Block Grant Funds, according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of Louisiana.

The board of the Louisiana Recovery Authority originally approved the allocation of the funds on Oct. 12, 2006 to pay for restoration of electricity and natural gas service to residents of New Orleans.

According to the motion, the funding will help mitigate extraordinary rate increases that would otherwise be passed on to New Orleans gas and electricity customers.

The U.S. Department of Housing and Urban Development approved the company's ratepayer mitigation action plan in February.

Entergy New Orleans said the ratepayer mitigation action plan provides that at least $200 million of CDBG funds will be used to offset the costs of restoration, reconstruction and rebuilding of the company's damaged electric and gas utility systems.

The plan requires Entergy New Orleans to submit its storm restoration costs and to disclose all related insurance coverage and the status of pending and settled insurance claims for review by the city.

The receipt of at least $200 million in CDBG funding is also a condition to the effectiveness of Entergy New Orleans' plan of reorganization.

Entergy New Orleans provides electric and natural gas service to customers in New Orleans and is the smallest of Entergy Corp.'s five utility companies. Entergy New Orleans filed for Chapter 11 on Sept. 23, 2005. Its case number is 05-17697.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.