http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-4/1134457733226780.xml"Entergy Corp. investors, not taxpayers, should pay for the $350 million that the company's bankrupt New Orleans utility needs to rebound from Hurricane Katrina, a senior White House official wrote in a letter to an Entergy executive."
"We believe that transferring federal tax dollars to the bondholders and shareholders of a private firm is inappropriate," Hubbard wrote.
Entergy executives and city officials who regulate the local power supplier have pushed hard in Washington for federal aid, warning that electricity rates in New Orleans could jump more than 140 percent if utility customers are forced to foot the hurricane recovery bill. They said such a rate increase would significantly raise the cost of living in the city and stifle its recovery.
The White House letter also runs counter to the commitment made by the president when he addressed the nation on Sept. 15 in front of St. Louis Cathedral, promising the federal government would "do what it takes" to rebuild New Orleans, said Brian Richardson, spokesman for U.S. Sen. Mary Landrieu, D-New Orleans.
What's more, they've said, Entergy New Orleans should receive the same financial support given to New York's power utility, ConEdison Co. of New York, which received $250 million in federal aid after the Sept. 11, 2001, terrorist attacks on the World Trade Center towers. Like Entergy New Orleans, the New York utility is a subsidiary of a much larger utility holding company, Consolidated Edison Inc., which was not required to foot the recovery bill for its subsidiary.
"Under the law, every dollar of costs that a public utility prudently incurs to restore and maintain service after a natural disaster are customer and not shareholder costs. This is a fundamental precept," the Entergy executive wrote."
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