Customers saving on their electricity bills may have to pay extra. Utilities could charge them for lost profits

Louisiana electric utilities are finding new ways to get customers to 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 electric bills. However, utilities such as Entergy and Cleco are pushing back, arguing that they should be compensated for the profits they will lose due to customers using less electricity.

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According to the Louisiana Illuminator, this controversial proposal could mean you could still incur additional charges even after you’ve reduced your energy use and seen a drop in your bill. These fees would help utility companies recoup the money they lose because customers aren’t wasting as much energy.

The Louisiana Public Service Commission (LPSC), which oversees these utilities, recently adopted a more consumer-friendly version of the energy efficiency program, rejecting attempts by the utilities to impose these “lost profit” fees — at least for now. But with upcoming elections that could change the commission’s makeup, there’s a chance utilities will renew their efforts to get those fees approved.

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

These programs could reduce energy waste and overall electricity consumption, which is good for the environment and can save customers money. However, local utility companies are worried about the loss of revenue because they make more money when people use more electricity. With people using less energy, their profits go down, so they try to add extra fees to make up for the lost revenue.

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

Although the LPSC has temporarily stopped discussing “lost profit” charges, the discussion is far from over. The utilities have made it clear they are not giving up on the idea, and with potential changes to the commission after the upcoming election, the issue could resurface.

For customers, this means that even if you reduce your energy use and lower your bills, you may still be hit with extra charges to cover the profits that utility companies claim they are losing.

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