A private equity firm that gave more than $200,000 in campaign contributions to members of the Louisiana Public Service Commission received unanimous approval from the commission Wednesday to purchase Entergy Louisiana’s gas distribution system.
The sale of the system to Bernhard Capital Partners has been little discussed and met with no opposition. Bernhard has agreed to pay $484 million for the gas systems of Entergy Louisiana and Entergy New Orleans, the latter of which is subject to approval by the New Orleans City Council.
Floodlight’s analysis of campaign contributions found that Bernhard Capital Partners and its executives have donated to all five Louisiana public service commissioners and one former commissioner over the past seven years. The bulk of that money, $149,000, or 71 percent, went to Commissioner Craig Greene, whose district includes Baton Rouge, where Entergy Louisiana’s gas customers live.
Greene, who made the motion to approve the deal at the meeting, told Floodlight before the vote that he believed Bernhard donated to his campaign because they believed in him.
“I have a vision for the state, I’m seen as a swing member and I think they like that I’m agnostic when it comes to technology,” he told Floodlight before the vote. “Your money means no more than if you gave me $25 right now.”
Other commissioners also said campaign donations had no influence on their votes.
“Absolutely not, I do what I want,” said Commissioner Foster Campbell, who received $7,500 in 2019 from Bernhard founders Jeff Jenkins and Jim Bernhard and Bernhard’s wife. Bernhard did not respond to requests for comment for this story.
Bernhard submitted his application to buy the gas supplier from Entergy to the Commission at the end of last year, but in 2018 telescoped his interest in purchasing utilities.
Private equity firms often have buy Companies with the aim of changing them to become more profitable. Such a move can make the company more successful – or burden it with massive debt.
“We are fundamentally concerned when a private equity firm acquires a franchise company with captive customers, in part because the financial structure of a private equity firm is far more opaque than that of a publicly traded company,” said Tyson Slocum, energy program director at Public Citizen, a nonprofit consumer advocacy organization.
In addition to Entergy’s gas systems in Louisiana, Bernhard has contracts to purchase CenterPoints Gas systems in Louisiana and Mississippi and another system owned by Emera in New MexicoWith these acquisitions, Bernhard’s newly formed gas utility, Delta State Utilities, would have about 1.1 million customers.
Currently it is zero.
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Greene wants to return donations
Jean-Paul Coussan announced in June that he would run to succeed Greene. Since then, he says he has received $36,000 from Bernhard and executives, including Bernhard and Jenkins, their wives and at least two subsidiaries, Allied Power Holdings and National Water Infrastructure.
Before Greene announced in June that he would not continue his re-election campaign, he reported receiving $36,500 in donations from Bernhard this year. He said Wednesday that he plans to return those donations.
The other two candidates for the seat did not report any contributions from Bernhard. Greene’s successor could sit on the commission if the CenterPoint acquisition comes before the PSC. CenterPoint has 247,000 customers in Louisiana.
It is legal to support commissioners’ campaigns. Donors, including PSC-regulated utilities, are allowed to give up to $5,000 per year. Floodlight said Bernhard as a company often donated up to that amount, as did several of its executives. Entergy, CenterPoint, Cleco and other utilities in the state regularly donate to PSC commissioners and candidates.
Energy experts say campaign contributions could create a conflict for regulators whose job it is to hold companies accountable.
“When the people who regulate the utility are essentially supported by the utility itself, that’s problematic. I think anyone can see that as a conflict of interest,” Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, told Floodlight.
The Alliance for Affordable Energy is concerned about what the sale of the gas systems means for the future of a state already burdened by climate change. It intervened in the New Orleans case but did not have the resources to intervene in the Entergy Louisiana case, said executive director Logan Burke.
Bernhard requested and was granted an accelerated deadline, giving interested parties only 15 days after December 22, 2023 to submit an application to join the proceedings.
“Our concern … is that DSU (Delta States Utilities) has made it clear that they want to continue investing in fossil infrastructure,” Burke said, noting that there is a consensus among climate experts: “We need to end the production and use of fossil fuels as soon as possible.”
Burke added: “We know we cannot turn off fossil gas supplies tomorrow. But if we do not start planning to reduce investment today, consumers will be left with a heavy bill.”
Will gas prices rise?
The alliance has Transcript They opposed the sale on behalf of the utility’s 109,000 customers to the New Orleans City Council, which is the regulator for Entergy New Orleans.
On Wednesday, the PSC did not discuss many of the issues raised by the Alliance in New Orleans, such as the “The risk of significant and unreasonable cost increases for customers, reduced efficiency because there will now be two utilities operating where there was previously only one, and additional costs of regulating those two utilities.
In his report recommending approval, staff referred to Bernhard’s promise not to raise tariffs for 15 months after the completion of the takeover, which is expected to be completed in mid-2025.
Commissioner Davante Lewis, whose district covers parts of Entergy Louisiana’s gas system, has received $10,500 from Bernhard. Lewis said when he received the donations last year, he assumed Bernhard, a former chairman of the Louisiana Democratic Party, was supporting a Democrat. The company had not yet announced the deal to buy Entergy Louisiana’s gas system.
Lewis voted for the takeover, but urged Bernhard’s representatives to reaffirm the company’s commitment to retain Entergy’s gas employees – and not to raise prices.
Lewis said he voted for the deal because no one had publicly raised issues similar to those in New Orleans, such as continued investment in a fossil fuel system. A dissenting vote based on concerns that were not addressed in the PSC could be seen as “arbitrary and capricious” and could lead to litigation, Lewis said.
“Although my goal is a clean future, at this point I cannot prohibit anyone from having a gas stove,” he added.
The sale of Entergy Louisiana, approved Wednesday, still must be approved by the Baton Rouge Metropolitan Council, which will happen after New Orleans votes on the sale of the Entergy New Orleans system.
Bernhard representative Ryan King told the commission that the New Orleans City Council is also expected to begin the sale before the end of the year.
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Headlights is a nonprofit newsroom that investigates the powerful interests that hinder climate action.
