New Orleans:
Living in the Dark Ages

Nov 27, 2006

Electric service in New Orleans has been so horrible that many say living there is like returning to the Dark Ages.

One section of the city, Bywater, still has no electrical service at all, despite the fact that the Bywater was not even hit by the flooding. In the rest of the city, there are frequent power outages. The wind blows and a neighborhood’s power goes out. Or it rains and the power goes out somewhere else. Thunder crashes distantly and out goes the power.

The wealthy may be able to afford their own emergency generators, but for everyone else, these power outages make life even more unbearable. No street lights breeds crime. Food in refrigerators and freezers spoils, and sleep becomes a luxury in the hot and humid nights.

The electric and gas utility, Entergy of New Orleans, has not even started to carry out hundreds of millions of dollars of repairs to the electrical substations and power lines. Instead, it has resorted to the short-term jury-rigging of the system.

Entergy claims that it is bankrupt and does not have the money necessary to carry out the repairs. Of course, this is a lie. Entergy of New Orleans is a subsidiary of a much bigger and rich company, called the Entergy Company, which owns electric utilities and power stations all across the country. Over the last year, the Entergy Company profits actually increased by one-third compared to the previous year, more than four billion dollars. And last year, the company paid its CEO J. Wayne Leonard, a bonus of eight million dollars.

However, the company has made it clear that it will not use these profits to pay for repairs in New Orleans. “If Entergy were to hand over millions of dollars [to its subsidiary in New Orleans], it would not be fulfilling its legal obligations to its shareholders,” explained a company spokesman.

Instead, in a conference call to investors in November 2005, CEO Leonard explained that the company intended to be “relentless in recovery of storm costs.” That is, it has forced the customers and the government to pick up the tab.

It has boosted the electric and gas bills of its customers by one-third–money which those who have lost almost everything obviously cannot afford. And it also got the Louisiana Recovery Authority to grant it 200 million dollars in federal recovery aid–under the threat that if it didn’t get that aid, it would double electric and gas rates again. On top of that, Entergy had previously received a 71 million-dollar federal tax refund. And in the future, many of its taxes will be deferred.

In other words, the recovery after the flooding in New Orleans has been a recovery in profits, not a recovery in for the vast majority of people who live there.