New Orleans Public Service Inc. (NOPSI) Company Profile ^17,19,39

NOPSI serves approximately 190,000 electric customers and 154,000 natural gas customers in the New Orleans metropolitan area. Headquartered in New Orleans, NOPSI primarily serves residential, commercial, and government customers in the metropolitan New Orleans area. The company's service area is shown on the map in Figure 5. NOPSI's principal address and telephone number are:

New Orleans Public Service Inc.
639 Loyola Avenue
New Orleans, Louisiana 70112
Phone: 504/569-4000

Load growth has been non-existent in recent years as the New Orleans economy has continued to perform poorly due to the prolonged depression in the oil and gas industry and some flight of residents to residential suburbs on the north shore of Lake Pontchartrain.

In 1993 NOPSI's electricity sales by customer sector as a percentage of total sales of 5,677 million KWH were 33.8% residential, 35.0% commercial, 8.8% industrial, and 22.4% other.

Power generated by NOPSI's plants in 1992 was fueled almost entirely by natural gas. An insignificant amount of fuel oil was also used, but most of it was used to generate power that was used internally. The company's 1993 peak demand of 1,141 MW occurred on July 28, up 2.1% from 1992. The 1993 peak exceeded NOPSI's generating capability of 1,077 MW. However, like LP&L, as a member of Entergy's system, surplus power was obtained from the system's other plants or interchanged with other utilities through the SPP to cover the shortfall. In addition, NOPSI's share of System Energy Resources interest in Grand Gulf capacity and energy as ordered by the FERC is 17%. These combined resources assure that no shortfall will exist for NOPSI to meet any foreseeable peak demand well past the end of the century, No generating unit is under construction or planned.

Electric Generating Facilities

NOPSI operates and is the sole owner of two generating stations with 1992 net generating capability totalling 1,077 MW. The A.B. Paterson plant has a gas-fired capability of 143 MW and an oil-fired capability of 16 MW, for a total of 159 MW. The Michoud plant has a gas-fired capability of 918 MW. The 1992 generating capability of each generating station according to plant owner and primary fuel type is listed in Table 3. The location of each generating plant is plotted on the map in Figure 1.

NOPSI's generating capability is 8.2% of the total capability of the IOUs Louisiana plants, 6.5% of the total capability of the state's utilities, and 5.6% of the total capability of all generating sources within the state.

In 1992 the 2,219 million KWH generated by plants operated by NOPSI were 4.9% of the power generated by the IOUs in Louisiana. This output was 4% of the total produced by the state's utilities and 3% of all power produced in Louisiana. The 1992 net generation of each NOPSI generating plant according to fuel type is listed in Table 1.

Recent Developments

On July 1, 1993, NOPSI filed a revision to the Least Cost Integrated Resource Plan it filed with the LPSC on December 1,1992. The plan includes both demand and supply-side measures to delay the building of new power plants by the Entergy System for the next 20 years.¹⁸

In keeping with Entergy's new internal regional alignment, NOPSI's service area is now part of the Metro Region, headquartered in New Orleans. The region takes in the entire NOPSI service area and LP&L's extreme southeastern area. NOPSI continues to reorganize and streamline its operations in order to bring its administrative and general costs in line with other top performing electric utilities.³¹

History ^5,42,43

The origin of NOPSI can be traced back some 170 years ago to the 1820s, when an actorentrepreneur named James Caldwell opened his American Theatre on Camp Street, lighting it with gas chandeliers. Spurred by success, he founded the New Orleans Gas Light Co. By 1833 he was providing manufactured gas to a few street lights and a hotel. Armed with an exclusive grant from the legislature, Caldwell built the first commercial gas plant in the Deep South. The gas was made from coal. New Orleans was one of the earliest cities in the U.S. to have a public gas system.

Less than 50 years after gas lighting was introduced to the city, the era of electricity began. The Southwestern Brush Electric Light and Power Company was incorporated in New Orleans on June 11, 1881, and was the first company to generate and distribute electricity in" the city. The company began operating January 8, 1882, and by the end of that year had installed 12 generators serving 480 of the brilliant electric arc lights invented by Charles Brush, almost all of them being used for street lighting.

The Edison Electric Illuminating Company was the first electric company in New Orleans to provide incandescent lighting and other power needs. The company was chartered on August 17, 1886

.

The decades that ushered in present-day NOPSI were chaotic. By 1900, more than 200 different gas, electric, and streetcar companies had operated in New Orleans since 1834. The resulting inefficient and wasteful duplication of service led to ruinous competition and financial problems. By 1919 the principal utilities were financially unstable and under federal receivership.

By early 1921 a federal receiver appointed the city's professional and business leaders as the "Citizen's Committee of Forty" to study the situation and suggest a solution. They recommended the formation of a single utility to provide electricity, gas, and transit.

In April 1922, the New Orleans City Government passed the Settlement Ordinance under which a new company could be created from the receivership. The Ordinance set up controls to bring the new company and the city into a partnership. Later in the year the entity was born as New Orleans Public Service Inc. On August 8, 1922, the newly formed company made its first incorporation by acquiring New Orleans Railway and Light Co. By September 27, it had taken over a number of subsidiaries and began operation.

At first the new company was not really a single entity, Technically, six corporations with the name *New Orleans Public Service Company Inc." succeeded each other in just five years as the charter was redrawn to encompass the latest consolidations and acquisitions of former companies. The present NOPSI was chartered January 1, 1926. It was formed out of a consolidation of

Consumers Electric Light and Power Company, which served the central business district and portions of residential areas; Citizens Light and Power Company, Inc., which served primarily the Carrollton section; and New Orleans Public Service Inc. (1925), which served other parts of the city.

The creation of NOPSI finally ended a series of buyouts, bankruptcies and consolidations since 1835 that involved no fewer than six gas companies, thirty transit and street railway systems, and 18 electric or consolidated electric, gas, and street railway companies.

The founding of NOPSI coincided with a leap in the consumption of electricity. In 1921, the year before the first NOPSI was founded, there were 43,000 electric meters in all of New Orleans. Five years later there were 86,000, The vast majority of 1921 customers were commercial, industrial, and government. The average customer used roughly 2,500 KWH per year, and the average residential customer used 319 KWH per year. From 1926 to 1939 - an era dominated by the Great Depression - electrical usage increased 400% while the number of customers barely doubled. During that same period the cost of electricity fell 72%, so the average residential user's total electric bill remained about the same despite the huge increase in consumption. This reduction in cost is attributable to efficiencies of new technology and economies of scale. From 1923 to 1985 the average residential consumption of electricity in New Orleans increased 3,000%.

While the city's demand for electricity grew at an enormous rate from NOPSI's founding onward, the city's entire generating capacity continued to be housed in the same Market Street generating station. Finally, in 1947 the Industrial Canal Generating Station was completed. It was renamed the A.B. Paterson Station in 1952. The last of three units at Michoud was completed in 1967. Since the late 1960s NOPSI has experienced a lack of growth, and no further generating capability has been added.

The 1970s were characterized by the energy crunch caused by the Arab oil embargo. With the trend away from natural gas and oil toward what was thought to be at the time more economical coal and nuclear fuels, the company committed itself to participation in the Grand Gulf Nuclear Plant along with MSU's other utility subsidiaries. With the growth in demand for electricity disappearing as the plant was being constructed, the need for it was continually questioned. This was one of the major issues of the 1980s and resulted in the New Orleans City Council in 1983appointing a Citizens Task Force to look into the feasibility of the city municipalizing or taking over electric and gas operations in Orleans Parish. Ultimately NOPSI remained in private hands (except for the purchase of its transit operations in 1983 by the Regional Transit Authority), but in 1985 voters in Orleans Parish chose to return regulation to the New Orleans City Council from the LPSC.

NOPSI has an agreement similar to LP&L whereby NOPSI is committed to purchasing 17% of the power of the 90% of the Grand Gulf nuclear plant that Entergy owns through its System Energy Resources subsidiary. This power helps make up any shortfall that NOPSI's own plants cannot produce.

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