The Electricity Conglomerate that Screwed Over New Orleans

[JPZenger]

Last week NPR had an interview with an official of Entergy New Orleans, the electric company for the New Orleans area, where they questioned how one division of a large profitable company could plead poverty. The restoration of electricity service is holding back rebuilding efforts in many parts of New Orleans. Entergy New Orleans is a wholly owned subsidiary of a much larger power company, Entergy Corp. Under Federal laws, Entergy Corp. is allowed to let its subsidiary fall apart, to preserve the large profits of the parent company.

Entergy New Orleans declared bankruptcy and says it doesn't have the money to repair the electricity systems. Entergy New Orleans is hoping for a huge Federal bailout.

As part of standard operating procedures, when there is a major disaster, power companies from other regions send crews to help make repairs. That happened after Katrina. However, on September 24th, Entergy sent all those crews home because they didn't have the money to pay them. They only have 100 employees who can repair electric systems.
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Here's excerpts from
http://pbrla.blogspot.com/2005/11/double-whammy-in-dark-new-orleans.html

"The parent company's stock price dropped only slightly when its New Orleans subsidiary took bankruptcy. The price has since recovered to near historic highs. Why the rebound? A month ago Entergy Corporation reported higher third quarter "consolidated earnings" of $1.64 per share, compared with $1.22 a share the year before.

Almost simultaneously, however, the parent corporation announced that henceforth it will be reporting its New Orleans subsidiary's earnings separately, as if it were entirely independent. By separately reporting the subsidiary's financials, the parent's financial skirts look cleaner than they really are.

This, even though the most recent consolidated balance sheet for the parent corporation shows it has over $28.5 billion in assets and only about $2 billion in short and longterm liabilities. The moment the subsidary needed help, however, Entergy cut it loose, pretended it didn't even know the beggar at the door, and packed it off to beg from Uncle Sam."

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Here's excerpts from a November 14th Los Angeles Times article:

http://www.latimes.com/news/nationworld/nation/la-na-electricity14nov14,1,1217990.story?coll=la-headlines-nation

"Entergy Corp., which owns utilities in four states, can't bail out its ailing New Orleans operation because its corporate financial structure restricts how money can be moved around within the company. The structure, known as "ring fencing," builds firewalls around subsidiaries to protect each from the cash needs of the others, preventing one utility's ratepayers from subsidizing those at another utility."

[DBoon]

1. Welcom to New Iraqeans

What, no power?

[OneBlueSky]

2. Entergy bought out a couple of power plants in the lower Hudson Valley . .

a few years back, one of which is in an adjacent community that is part of the local school district . . . because of their bankruptcy and ensuing litigation involving past property assessments, our school taxes this year are going up about 45% . . . on top of a 50% increase in utility bills, and a 7.8 increase in property taxes that support town government . . .

[Generic Other]

3. If the public bails them out the public ahould own the utility

Reclaim our damn country!

[JPZenger]

4. $963 Million Net Profits Last Year

Entergy had net profits last year of $963 million.

http://finance.yahoo.com/q/ks?s=ETR

[gulfcoastliberal]

5. SoCal Edison did the exact same thing after California deregulatiion

They actually moved all their money into the parent company and said they were bankrupt. PG&E also declared bankruptcy and then asked the judge to approve millions in executive bonuses. Deregulation of electricity is causing the grid to fall apart. They have zero interest in upkeep of things like transformers when they're not required to. A woman in San Francisco was recently seriously injured when an underground transformer blew up and is suing PG&E for not maintaining it. PG&E has had other transformers blow up recently as well. Enjoying the ride from industrialized nation to 3rd world backwater?

[Occulus]

6. I said it before, and I will say it again:

If corporations are going to be allowed to claim personhood under the law, then they must not be allowed to own other corporations, subsidiaries, or divisions. Period.

[1932]

7. I'm critical of the corporatocracy, but I don't see the logic in that.

[Occulus]

9. BEcause corporations "are" persons

and persons cannot own other persons.

That's slavery.

It's ironic, because the corporations of the time corporate personhood was introduced as a valid legal doctrine (Santa Clara cty. v. Southern Pacific Railroad Co.) argued that it was the passage of the Amendment freeing the slaved that also "freed" them from the shackles of the public.

edited to add: This was never argued before the SCOTUS presiding over that case; that court simply declared it so, and in the headnotes, not the body. The entire doctrine is false to begin with- the SCOTUS declaration that they would not hear argument for or against the personhood of the corporation because "we are of the opinion that (they have personhood)" (to paraphrase the declaration) never carried the force of a legal decision to begin with.

Corporations get things both ways: they're persons, but they can own other persons (child corporations, subsidiaries, and so forth). I cannot own a person.

Corporations can tear off their own arm and MAKE a new "person", which they then "own".

Basically, corporations get all the rights of citizenship- save voting- and NONE of the responsibilities. (One could argue, voting is both a right AND a responsibility, but that's beside the point.)

Corporations cannot be sent to jail themselves, yet they themselves can file suit. Corporations cannot be given the death penalty, even when the products they manufacture are known to kill natural persons.

Corporate personhood must end. Corporations should not have rights; they should have, being nonpersons, priveleges; else, they should be required to follow the law- and that means not owning other persons.

It's very simple logic, really.

[DoYouEverWonder]

8. Here where I live

the city owns the power company. Every local government should own their own utilities.