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Shenandoah opts to delay Entergy base rate increase

June 16, 2018

The Shenandoah City Council on Wednesday, June 13, approved an ordinance postponing the effective date of a rate increase from the city’s electric provider, Entergy Texas, from Tuesday, June 19, to Sept. 17.

Although Shenandoah was just the latest entity to pass the ordinance, two other cities in Montgomery County also opted to extend the period, in which the city’s legal teams can investigate the rate and propose changes.

Why is Entegy Texas raising the base rate?

They’re not — yet. On May 15, the Austin-based Lawton Law Firm sent a letter to a group of cities in Texas it represents, including Shenandoah, that Entergy Texas had filed a statement of intent requesting a “system-wide” base rate increase of $16.7 million.

The statement provided the cities with a proposed ordinance that would postpone the effective date of the increase from June 19 to Sept. 17, effectively giving each city 90 days to explore if the proposed raise works for them, or if they’d like to intervene and negotiate with Entery Texas in front of the Public Utilities Commission.

The process of raising the base is completely routine, Entergy spokesperson Kacee Kirschvink said. Barring any special projects or circumstances, Entergy Texas files with the state’s Public Utilities Commission every four years to raise the base rate.

What will the proposed base rate look like for residents in September?

The letter of intent lists the proposed increase as an average of $2.36 for a customer using 1000 kWh.

Within the 90 days proposed by the city ordinance, the group of cities and Entergy Texas have to come up with some sort of agreement on the base rate — they could negotiate a smaller or larger amount, or they could negotiate to keep the rate the same. If the two parties are unable to come up with an agreement, the Public Utilities Commission — which has the final word on the subject — intervenes.

Why is a base rate increase necessary at all?

Entergy Texas is working on a few projects to improve reliability and service throughout Montgomery County, Kirschvink said.

As well as replacing aging equipment and routine maintenance, the Montgomery County Power Station is set to save $1.7 billion for the company’s 450,000 customers in the region over 30 years, according to a news release.