Entergy New Orleans expects that its upcoming bond backed by storm recovery fees will be between $88 million and $99 million, a company spokeswoman said by e-mail.
An outline of the deal, which securitizes payments ENO collects from electric customers for storm recovery expenses, were registered with the Securities and Exchange Commission earlier this month.
The deal is scheduled for June or July.
Doing an asset-backed translates to high cost savings for the utility.
“Securitization significantly reduces the impact of storm costs on customers by spreading the costs out over several years and allowing the costs to be financed at a lower interest rate than is offered by traditional utility financing,” the spokeswoman said.
Without a securitization, the utility might have to raise rates. The anticipated costs savings of this deal is $25.8 million on its storm reserve fund and $24.4 million on recovery costs incurred by Hurricane Isaac.
For additional info on the transaction and ENO’s finances, click here.