Investor-Owned Electric Utilities

The five investor-owned electric utilities (IOUs) operating in Louisiana are Central Louisiana Electric Company (CLECO), Gulf States Utilities Company (GSU), Louisiana Power & Light Company (LP&L), New Orleans Public Service Inc. (NOPSI), and Southwestern Electric Power Company (SWEPCO). Their respective Louisiana service areas are shown on the map of Figure 5. Of the five, only CLECO is an independent, publicly-held corporation. The other four are operating subsidiaries of large, multi-state, publicly-held holding companies. GSU, LP&L, and NOPSI are utility operating subsidiaries of New Orleans-based Entergy Corporation, which also has subsidiary operations in Arkansas, Mississippi, and Texas. SWEPCO is one of four operating subsidiaries of Dallas-based Central and South West Corporation (CSW). CSW has electric utility operations in Arkansas, Oklahoma, and Texas as well as Louisiana. The common stock of CLECO, Entergy, and CSW is traded on the New York Stock Exchange and some regional stock exchanges.

The 1992 Louisiana IOU electricity sales by customer sector as a percentage of total sales of 58,006 million KWH were 29.3% residential, 20.5% commercial, 45.9% industrial, and 4.3% other.¹⁴

In 1992 the IOUs had a generating capability of 13,161 MW, which was 79.4% of the total capability of the state's utilities and 68.6% of the total of all generating sources within the state (See Tables 3 & 4). The 45,167 million KWH generated by the IOUs accounted for 81.8% of the state's total net generation by utilities and 61.1% of the total from all sources within the state (See Tables 1 & 5 and Figure 2). Power generated by the IOUs was 80.3% of the power available to the grid from all Louisiana generating sources.

The fuel mix of power generated by the Louisiana facilities of the IOUs in 1992 was 51.8% natural gas, 15% coal, 9.3% lignite, 22.9% nuclear, and 1% fuel oil (See Table 5). Total system peak demand in 1993 was 23,467 MW, an increase of nearly 8% from 1992. Total system generating capability totalled 26,903 MW, for a reserve capacity margin of 12.8%. This compares to a 20.6% margin in 1992. While the extremely hot summer of 1993 resulted in record power consumption in Louisiana, there was no shortage of generating resources to meet the need, as additional power was available from the SPP, SPA, and the other Regional Reliability Councils members of NERC. A graph of IOU total system peak load vs. total capability for the years 1987-1993 is shown in Figure 6.

Louisiana Electric Generating Facilities

The total generating capability of the IOUs consists of the 24 operable generating plants within the state operated by them. The location of each plant is shown on the map of Figure 1. Net generation and generating capability of each Louisiana plant for 1992 by fuel type are shown in Tables 1 and 3. Additional information on certain plants may be found in the portion of this report where the specific utility that owns or operates the facility is discussed

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Regulatory Matters ^{15,16,17,18,20,21}

Except for NOPSI and the city of Algiers, the Louisiana retail electric operations of IOUs are subject to the jurisdiction of the Louisiana Public Service Commission (LPSC) with respect to rates, standards of service, accounting and other matters. The City Council of New Orleans has regulatory jurisdiction over NOPSI and LP&L's operations in the city of Algiers. The LPSC establishes base rates based upon nonfuel costs, including the cost of capital, and sales. On the federal level, IOUs are subject to the jurisdiction of the FERC on virtually every aspect of production, transmission, and sales conducted in interstate commerce. In addition, the Securities and Exchange Commission regulates the issuance and sale of securities to protect investors

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The LPSC has recently established a plan to review the earnings of each utility to determine if its allowable return on equity is higher than it should be under the current low interest rate environment. This review will take place over a two-year period and should be complete by the end of 1995. The general review is related to a preliminary report in which consultants asserted that the IOUs operating in Louisiana were earning higher returns on equity than they would if their electric rates were established today

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