As Entergy Louisiana customers, local restaurants are going to have to help pay for the utility company’s planned $10 billion-plus building spree, mostly to replace aging plants—and that likely means their already-rising monthly bills could also go up as much as $50 more over the next few years.
Some estimates are even higher. Once six of Entergy’s gas-fired generating units—which are either already or nearing 50 years old—are replaced, more units will be needed to meet the expected growth in demand. Taken together, this could yield a 50% increase in Entergy’s rates, according to the Louisiana Energy Users Group.
However, Entergy executives say the increase will occur over a longer period of time than the users’ group anticipates. Regardless, Baton Rouge restaurant owners are beginning to brace for the potential effects of increased utility costs.
“Any increase to our hard costs will affect our model of keeping prices low for our guests,” says Ozzie Fernandez, who owns LIT Pizza, Izzo’s Illegal Burrito and Rocca Pizzeria. “We understand electricity is vital to our organization—and Entergy has been a very good partner at making sure we’ve got power—but ultimately, and unfortunately, it’ll be passed onto the consumer.”
Still, Fernandez says Entergy’s monthly rates are “considerably” lower than those paid by his restaurateur friends in Texas.
MJ’s Cafe owner Mary-Brennan Faucheaux says the projected fee hikes are simply part of a restaurant owner’s constant balancing act, gauging how to satisfy customers and pay the bills at the same time.
“It’s, ‘How do you keep the price point in an affordable spot for your customers and be able to deliver the quality of food you want to serve?’” Faucheaux says.
Though he sees how it’s worrisome on the residential end, Jordan Piazza, who owns Phil’s Oyster Bar and Uncle Earl’s, says, for a business, a $50-per-month maximum increase is “minimal” considering the potential upgrades in service his concepts could get from the unit replacements.
Entergy contends that one reason its residential rates are currently so low is because industrial customers share the costs with small businesses and homeowners, and because of the economies that come with regulated monopolies. The Public Service Commission is scheduled to decide Wednesday on whether to debate deregulating the company.
“Rates are projected to go up, but what those increases will look like, we can’t be 100 percent certain of,” says David Zito, executive assistant to Public Service Commissioner Craig Greene. “It could be 50 percent increases in five years or incremental increases over 10 years, but it will impact all customers because all are paying.”
