The New Orleans City Council voted Wednesday to approve a resolution that calls for Entergy New Orleans to be fined $5 million for paying actors to support its proposed $210 million natural gas-fired power plant.
An independent external investigation recently concluded that Entergy New Orleans, a subsidiary of Energy Corp., knew it was paying actors to show up at public meetings in support of the new power station. The utility, which provides electric service to the entire city, will not be permitted to pass the $5 million fine onto ratepayers.
The council’s resolution gave Entergy 30 days to show why the penalty should not be imposed. The resolution also requires Entergy management-level employees to complete a third-party ethics training course.
Community and environmental groups, however, say the fine isn’t enough. They believe the city should be doing much more to hold Entergy accountable.
“A $5 million fine is not a remedy for what went wrong with the public process. It’s a slap on the wrist and Entergy still gets to build its gas plant, pollute all of New Orleans East, and get paid tens of millions in return for their investment,” Susan Miller, an attorney for EarthJustice, said Thursday in a statement.
The investigative report “makes it clear that Entergy violated the law, and the law now requires the Council to hold a new hearing and re-vote on the decision to approve Entergy’s gas plant,” she said.
At Wednesday’s council meeting, council members Jason Williams and Jared Brossett indicated they would be in favor of holding a new vote on the proposed plant.
The New Orleans City Council initiated the investigation in May to determine whether Entergy, or some other entity, paid actors to attend and speak at public meetings in support of the company’s proposed power station in New Orleans East.
The investigation found that numerous paid actors attended two public meetings: one on October 16, 2017, and the other on February 21, 2018.
The investigators also learned that Entergy executives contemplated using similar tactics at an additional hearing before the New Orleans City Council’s Utility Committee on December 13, 2017. But Entergy executives eventually decided against such action, the report said.
Investigative report confirms Entergy deliberately and knowingly hired paid actors to support the gas power plant pic.twitter.com/ulWG4MdeaA
— GNO Housing Alliance (@GNOHA) October 31, 2018
Entergy worked with The Hawthorn Group, a Virginia-based public relations firm, to recruit supporters and speakers for the public meetings on the proposed gas plant. The Hawthorn Group has a history of using “astroturf” operations in attempts to manufacture the appearance of popular support for a utility company’s position where none or little exists.
As communications between Charles Rice, the CEO of Entergy New Orleans, and Entergy communications manager Yolanda Pollard revealed, Rice knew that Entergy was paying The Hawthorn Group to recruit people to attend city council meetings on the power plant.
On October 3, 2017, Rice texted Pollard: “If Hawthorne can get more people I will pay.” Later that morning, Rice texted Pollard again, saying, “This is war and we need all the foot shoulders [soldiers] we can muster.”
The independent investigation was conducted by the law firm of Sher Garner Cahill Richter Klein and Hilbert LLC and retired Judge Calvin Johnson.
The investigative report concluded that Entergy “considered this investigation as an adversarial process, pitting them against the investigators with the Council being the arbiter or judge.” Entergy never recognized or accepted the fact that the investigation was “simply a search for the truth and that it should have been as hell bent on finding the truth as the investigators were,” the report said.
In a statement, Entergy said it takes exception to “certain characterizations and omission of key facts from the report, including specific evidence Entergy provided that confirms it did not pay, nor did it authorize any other person or entity to pay, individuals to attend or speak at Council meetings.”
The Alliance for Affordable Energy, a New Orleans-based nonprofit group and the lead plaintiff in a lawsuit challenging the New Orleans City Council’s decision to approve the power plant, was not satisfied with the city council’s response to the report.
“Entergy paid actors to show up at City Hall in support of their gas plant, then lied about knowing about it. They compromised our democratic process and kept real community members out of the room,” the Alliance for Affordable Energy said in a statement. “This Fortune 500 company lied repeatedly to elected officials, regulators, and the public whom they serve while undermining our democratic process. So a $5 million fine? New Orleans deserves better.”
The New Orleans City Council approved the 128-megawatt power plant on March 8 in a 6-1 vote. New Orleans has an unusual setup where the city council, not a separate utilities commission, has regulatory authority over the city’s electric utility.
Two months later, The Lens New Orleans reported that Entergy had paid The Hawthorn Group to recruit people to support the plant at city council meetings.
In mid-2017, the New Orleans City Council opened a proceeding to look at the reliability of Entergy’s electric power system in the city. Entergy grew concerned when a large number of neighborhood associations, many of them opposed to the power plant, joined the proceeding as intervenors.
The new plant, as proposed, would be built on the site of Entergy’s Michoud power plant in New Orleans East, an area made up of predominantly Vietnamese, African American, and Latino communities.
The $210 million plant, slated for construction in an area of New Orleans that the Federal Emergency Management Agency has designated as a flood zone, has been the target of strong opposition since Entergy filed its application.
The proposed plant will have estimated emissions of 358,561 tons of greenhouse gases every year for its 30-year lifespan.
Entergy has not begun construction on the power plant. The company still needs its final air permit before it can break ground, although it has already completed some site preparation work.