Customers Who Save On Electric Bills Might Have To Pay Extra. Utility Companies Could Charge Them For Lost Profits

Louisiana's electric utility companies are finding new ways to make customers pay – even those who are actively trying to save on their energy bills. A new statewide energy efficiency program aims to reduce electricity waste and help residents lower their electricity bills. However, utility companies like Entergy and Cleco are pushing back, arguing that they should be compensated for the profits they stand to lose due to customers using less electricity.

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According to Louisiana Illuminator, this controversial proposal could mean that you might still incur extra fees even after reducing your energy usage and seeing a drop in your bill. These fees would help utility companies recover the money they're losing because customers aren't wasting as much energy.

The Louisiana Public Service Commission (LPSC), which oversees these utility companies, recently adopted a more consumer-friendly version of the energy efficiency program, rejecting the utilities' attempts to impose these “lost profit” charges – at least for now. But with upcoming elections possibly changing the makeup of the commission, there's a chance that the utilities might renew their efforts to get these charges approved.

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Entergy Louisiana customers already see fees related to the energy efficiency program on their bills, labeled "Rider EECR-QS" and "Rider EECR-PE." These charges cover the costs of implementing the program, including helping low-income residents insulate their homes or upgrading appliances in large commercial buildings.

These programs might reduce energy waste and lower overall electricity use, which is good for the environment and can save customers money. Still, local utility companies are worried about losing revenue because they make more money when people use more electricity. With people using less energy, their profits decrease, so they are trying to add extra fees to compensate for the lost income.

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Electricity costs in Louisiana increased by over 7% in 2023 and are now more expensive than in nearby states like Arkansas and Oklahoma. However, they’re still a bit lower than the national average. In New Orleans, energy bills increased by 60% between 2019 and 2022. The average annual bill rose from $1,345 to $2,148.

Although the LPSC has temporarily stopped discussing "lost profit" charges, the discussion is far from over. The utility companies have made it clear that they aren't giving up on the idea, and with potential changes in the commission after the upcoming elections, the issue could resurface.

For customers, this means that even as you reduce your energy consumption and cut your bills, you might still be hit with additional charges to cover the profits that utility companies claim they're losing. 

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