BEFORE THE

COUNCIL OF THE CITY OF NEW ORLEANS

COMMENTS BY THE ALLIANCE FOR AFFORDABLE ENERGY

MAY 7, 2009

The Alliance for Affordable Energy (“Alliance”) thanks the City Council (“Council”) for

the opportunity to address this important issue. In the Alliance’s 23-year history, the Council has

never reviewed the efficiency and cost-effectiveness of how it employs its advisors’ services.

While the Alliance respects the diligence and dedication of the current Council advisors, frankly,

a review of this kind is imperative for the maintenance of good government practices.

The present bid before the Council comes from a team of nationally- and internationally-

renowned regulatory experts. Put simply, no matter the duration of the RFP process, the Council

would not receive a bid from a better-qualified team. Moreover, this bid by the Rand

Corporation (“Rand”) and the National Regulatory Research Institute (“NRRI”) is a steal at only

$129,000. Importantly, this value represents less than half a percent of the cost of the advisors’

five-year, $30 million contracts. The Alliance is confident that a study of this kind will generate

at least half a percentage point worth of savings.

This Council has more regulatory experience than any city council in recent memory.

You have had to wade through the largest natural disaster in U.S. history and the subsequent

bankruptcy of a major electric utility. You have tackled two rate cases. You have developed and

adopted a city-wide energy efficiency program. You have stood up to the threats of Entergy

Arkansas and Entergy Mississippi to withdraw from the Entergy System Agreement. Given

these accomplishments, the Alliance believes strongly that the current Council is the best-

qualified to pursue and review the findings of such a study.

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 Deferring this study until next year would be a disservice to the citizens of New Orleans.

These contracts come up for renewal in January 2010. There will not be another chance to

perform a review of this kind for at least five years subsequent. Next spring’s elections may

herald in an entirely new council that will then have to begin the arduous process of learning the

nuances of utility regulation and will not be in a position to perform this important task. The

citizens of New Orleans deserve to know that their tax dollars are well-spent, and they deserve

your expertise in making that determination.

You have the opportunity today to be an exemplar of good government practices, not only

to future city council members, but to leaders across the State. We ask you to please consider

seriously the implications of postponing this study and to act in the best interest of your

constituents. Again, we thank you for the opportunity to voice these concerns.

Respectfully,

Jesse S. George, JD
Legal Advisor
Alliance for Affordable Energy
1001 S. Broad St.
New Orleans, LA 70125
Phone: (504) 208-9761
Fax: (504) 208-9768