City Secures Funding Commitments to Enable SWBNO Upgrades on Power Infrastructure with Critical Support from Entergy
NEW ORLEANS — The City of New Orleans today announced a historic partnership with the Sewerage & Water Board of New Orleans that, through a range of funding commitments, will allow Entergy New Orleans to seek approvals to support next-generation power infrastructure at the Sewerage and Water Board of New Orleans’ (SWBNO) Carrollton Plant. The estimated $74 million project will provide a new Substation, Frequency Changers, and Power Integration that will give SWBNO increased and consistent power reliability. This partnership will lead to power coming directly to the SWBNO, unaffected by weather, outages, and old turbine failures. Funding sources include $20 million from the City, another $20 million secured by the area’s legislative delegation from the State of Louisiana, and $35 million from Entergy.
[WATCH: Mayor Cantrell press conference with SWBNO & Entergy New Orleans]
“From my first day in office, my administration has maintained a focus on improving our city’s infrastructure and adapting to our environmental challenges. Today, we are announcing critical step towards an unprecedented partnership that will give our city a transformative $74 million infrastructure project – providing a reliable power source for the Sewerage and Water Board of New Orleans,” said Mayor LaToya Cantrell. “This also will greatly reduce both costs and carbon emissions, improve environmental justice, and protect our ratepayers.”
“Entergy New Orleans is committed to modernizing the City’s power infrastructure in a way that also addresses climate change. Today, is an important step in that direction,” said Deanna Rodriguez, President and CEO of Entergy New Orleans. “We are all in this together and look forward to working closely with the New Orleans City Council, Mayor Cantrell, and the Sewerage & Water Board on this important investment for the City of New Orleans.”
“Mayor Cantrell's leadership basically exemplifies identifying the issues, and setting the priorities, and making the Sewerage & Water Board a key priority for her. She never relented from that from Day One. You've taken on the challenges, you've owned every problem, and you delivered solutions. And I don't know what more I can ask from a Mayor and her leadership,” said Ghassan Korban, Executive Director, Sewerage & Water Board of New Orleans.
“Mayor Cantrell made it clear that securing funding for this project was the City's top priority for the 2021 legislative session, and our ability to deliver $45 million for the future of this project means New Orleanians can move towards a future with reliable pumps, less boil water advisories, and a backup supply of power,” said Karen Carter Peterson, State Senator, District 5; conference committee author for the capital outlay legislation.
“Ensuring that the Sewerage and Water Board has adequate and reliable power is our first defense against the changing climate and increased rainfall that we face as a city. I am proud to have worked to help fund this project that is so important for the future of our city,” said Jimmy Hughes, State Representative, District 100; member, Ways and Means Committee.
“New Orleanians deserve a city that works for them. I am proud of my work with Mayor Cantrell and legislative leadership to deliver on promises made that are critical to the future of our city,” said Jimmy Harris, State Senator, District 4; member, Senate Finance Committee.
“The power generation issues at the Sewerage and Water Board are responsible for some of the most dangerous and costly problems we face as a city, from drainage and pumping failures to boil water advisories. I'm proud to announce that this is a rare moment that we have a permanent solution for this decades-long problem. Through the hard work of our team at the Council Utilities office, our consulting team, and in strong collaboration with the Mayor and her team, leaders from Entergy and SWBNO, we have forged a sustainable, affordable, and, most importantly, reliable solution that will secure power for SWBNO for generations to come,” said Helena Moreno, City Councilmember At-Large.
“Public safety involves much more than just criminal justice or police. Water and drainage are public safety issues too. Today is a major win for the residents of New Orleans. With this new partnership with Entergy, we will have a consistent and reliable power source which will result in keeping all New Orleanians safe," said Jay H. Banks, City Councilmember, District B; member, SWBNO's Board of Directors.
“We have known the Sewerage & Water Board's power situation has been precarious, at best. This substation is a culmination of two years of hard work by the Mayor, SWBNO, ENO, Councilmember Moreno, and my office on a primary, substantial power source. This vital infrastructure will serve as the backbone for clean drinking water and drainage for all New Orleanians. I look forward to the joint Public Works and Utilities Committee meeting next Tuesday where we will discuss the substation in more detail, and present a resolution at the request of the Administration affirming the Council's commitment to this progress,” said Joseph I. Giarrusso, City Councilmember, District A; Chair, Public Works Committee.
“This project is certainly one of the biggest infrastructure accomplishments of this administration and is vital to moving the Sewerage & Water Board of New Orleans and our City forward,” said Ramsey Green, Deputy CAO for Infrastructure. “We cannot stress enough that time is of the essence when we’re dealing with our critical infrastructure. By late summer of this year, we expect Entergy will request City Council approval for the substation. At the beginning of 2022 we expect to break ground on the Substation so that by Spring of 2023, this project will be scheduled to be complete and operational ahead of the 2023 hurricane season.”
This proposed partnership will provide $74 million in funding to bring the new Substation, Frequency Changers, and Power Integration online and provide reliable power to the Carrollton Plant by the start of the 2023 hurricane season. For this project to go into effect, the City has provided Entergy the commitments it needs to seek internal approval for an estimated $34 million to design and construct the power substation. Crucially, the project costs are not designed to be passed on to ratepayers primarily – not Entergy’s ratepayers nor the SWBNO ratepayers. Instead, the project will be paid back by the SWBNO directly through the significant cost savings of the modernized equipment.
Mayor Cantrell thanked the region’s legislative delegation, which worked to secure $20 million through the State Capital Outlay program to fund the integration between the new Entergy substation and the Frequency Convertors. These funds will be used to provide the equipment needed to distribute the power from this new substation to the drainage, water, and pumping stations throughout the city – a complex arrangement.
The City has demonstrated over the last three years its commitment to managing capital outlay projects more efficiently than in years and decades past, and the region's legislative delegation is showing great confidence in the City's ability to put this money to work, Mayor Cantrell noted.
The final, critical component of this agreement is providing $20 million in City bond funds to cover the costs of the necessary frequency changers that allow a reliable connection between the newly constructed substation and the antiquated pumping system throughout the city. The City supports the appropriation of these funds to the SWBNO for this use because there is no time to lose to get the City’s power systems to a reliable position. This is in keeping with the voter’s approval in November of 2019 of $500 million in City bond funds to go toward the improvement of the City’s infrastructure.
The City’s $20 million investment results in total savings of $44.3 million.
Over this same period, the Cantrell Administration has improved the City’s credit rating and kept it stable despite unprecedented challenges including the COVID-19 pandemic, a cyber-security attack and other crises. The City is also issuing the its first tax-exempt bonds in nearly 15 years, the largest one-time new-money tax-exempt bond sale in the City’s history.
“When Mayor Cantrell came into office, the City was unable to issue tax-exempt bonds because the city was not spending its bond funding fast enough – just like the City did with its capital outlay funds, the City is doing so now and is issuing more than $300 million in tax-exempt infrastructure bonds later this summer for the first time in years,” said Deputy CAO Green.
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