Much of New Orleans Is Still in the Dark From Katrina

About 5:30 p.m., when lights blink on in the French Quarter and central business district, darkness falls like a blanket over the eastern half of this city.

Homeowners leave in a column of trucks and cars, hoping to reach their temporary housing before nightfall. The last signs of life disappear.

Behind the hopeful language about rebuilding lies a dispiriting statistic: Forty percent of the homes in New Orleans, most of them lying east of the Industrial Canal, do not have electricity. Some are in neighborhoods that were damaged beyond repair by Hurricane Katrina. But in other areas, residents say, rebuilding could start immediately if basic services were turned on.

At a town hall meeting Wednesday, residents of eastern New Orleans lined up with harsh words for the utility company that powers the city.

“Entergy needs to be placed on the carpet here,” said homeowner Dennis Scott. “I know you have financial problems, but whatever happened to contingency planning? We’re talking about a Fortune 500 company here.... Entergy, you need to be -- I hate to say it -- shot.”

Entergy New Orleans filed for bankruptcy protection Sept. 23, and its chief executive has said the company needs $450 million in federal assistance to survive in the face of restoration costs and the sudden drop in revenue.

On Oct. 18, Dan Packer, Entergy New Orleans’ president and chief executive, told the local business publication New Orleans CityBusiness that restoration efforts were “ahead of the game,” with 55% of its customers able to access electricity.

Since, progress has slowed.

The company had to send away repair crews from outside New Orleans because it could no longer afford to pay them. It has 400 employees, of whom 100 are trained to do the repair work.

And because crews began work in some of the most heavily damaged areas of the city, it took longer to see results, said Rod West, regional manager for the company’s electrical distribution operations.

Power should be available to customers in the eastern part of the city by January, West said.

The cost of restoring power to New Orleans could amount to as much as 68% of Entergy New Orleans’ net assets, said Amy Stallings, a company spokeswoman. Only 24% of its customer base has returned to the city and is using electrical service.

The company would not be functioning at all without a $200-million loan from its parent company, Entergy Corp., West said.

“Without that money, Entergy New Orleans would not be able to be here,” West said. “We’re talking about the survival of a corporate entity and the role the entity plays in the rebuilding process.”

Clint Vince, who advises the New Orleans City Council on energy matters, said the situation cried out “for getting some federal help.”

Vince said he had urged Entergy Corp., the parent company, to extend more loans to its subsidiary. He fears that costs will be passed on to residents, many of whom are in dire financial straits.

“We need to move fast,” Vince said. “The city is in financial collapse.”

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.

Speeding the pace of restoring electrical service has become one of the highest priorities for City Council members, Vince said, adding that he believes Entergy is working hard to fix the problem.

“What I want to see is how many men they have working in the restoration over the next two weeks,” he said. “I think Entergy knows that the [City Council] will hold their feet to the fire. This is an essential service that people need.”

Left in limbo are residents of Lakeview, Gentilly, the Lower 9th Ward and much of New Orleans East.

Restoration of power is only one hurdle for homeowners, many of whom are waiting to hear about levee protection, insurance coverage, schools, water and sewer systems before they commit to rebuilding.

An understaffed Department of Safety and Permits is swamped with requests for city permits, which are necessary before Entergy can restore power to a home.

But with almost half the city dark, homeowners such as David Parker have focused their ire on Entergy. Parker, 47, lives in a New Orleans East subdivision where there is no timetable for restoring power.

Parker, a nurse, rushed back to his three-bedroom home the first week in October, as soon as the water receded, and got to work.

It took contractors a day to cover his roof with waterproof tarps and two days to strip away the drywall, plaster and insulation. Bare 2-by-4s stand ready to be pressure-washed, dehumidified and treated with antimicrobial paint.

They’ve been that way for a month -- something Parker remembers with bitterness when he sees lights glittering in the French Quarter.

The mayor, Parker said, “put all the resources downtown. He powered up the strip joints and bars.”

Gail Miller, who lives a few miles from Parker, knows the feeling. A retired New Orleans police officer, she is practically the only permanent inhabitant of Lake Forest Estates, a neighborhood of stately homes priced at $400,000 and higher.

Miller, 60, was optimistic when she returned to the neighborhood to discover that most of the damage to her home was “cosmetic.”

She and her husband gutted their home and moved into the second floor, lighted at night with pools of generator-powered light. At night, they grill steaks and look up at a starry sky.

Almost all of Miller’s neighbors have come home to gut their houses, she said. But she fears that with every week that passes in uncertainty, more of them will decide to settle permanently in other cities.

“We’re in a quagmire right here,” she said. “We are probably losing a lot of people. The longer this stays unanswered, the worse it’s going to be.”