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Ike Restoration Focus Narrows: Now It's All About Houston

More than 3.5 million electric customers in eight states who lost power during Hurricane Ike's rampage two weeks ago have had power restored, and an army of repair crews are now focusing their efforts on three adjacent Houston-area counties where there were still 454,650 outages at the end of the week.

There were still 410,157 Ike-related outages in Texas as the work week came to a close, including 350,619 in Harris County, which includes Houston, and a total of 34,184 in adjacent Brazoria and Galveston counties, according to the Public Utility Commission of Texas (PUC). The number of reported outages in the three-county area was down about 45,000 since Thursday.

CenterPoint Energy reported 391,203 outages in Texas on Friday morning, down approximately 60,000 since Thursday, and had restored power to more than 1.7 million customers since Ike hit the Gulf Coast. Texas-New Mexico Power Co. still had 8,763 outages in the state, according to the Department of Energy (DOE).

Entergy said on Thursday that it had restored power to all of its customers in Texas, Louisiana and Arkansas who lost power due to Hurricane Ike except about 7,300 customers in areas of the Texas coast where there was extensive flooding, including Taylor Landing, Sabine Pass and Bolivar Peninsula.

"We are at work on a plan to rebuild our electric infrastructure in those areas where customers' facilities were so damaged they are unable to receive power," said Entergy Texas CEO Joe Domino. "We are committed to delivering the power to help our customers rebuild their communities and their lives."

On Thursday the PUC approved an emergency order prohibiting service disconnections, waiving deposit requirements for new service and prohibiting higher fees for non-business day, same-day service reconnections and priority move-in requests through Oct. 10. The order was passed to help electric customers affected by Hurricane Ike, the PUC said. CenterPoint Energy customers in the Houston-Galveston area, Entergy Texas customers in Galveston, Jefferson, Chambers and Orange counties, and other electric customers who live in areas covered by the Federal Emergency Management Agency disaster declaration were covered by the order.

Galveston County began allowing residents back into some of its hardest hit areas, including Port Bolivar, on a limited basis beginning Friday. In addition to the debris left behind by the hurricane, "there are countless snakes, alligators and other wildlife risks in the area," according to an information sheet the county distributed to area residents. Entergy said some of its customers are still living in Port Bolivar and others are planning to rebuild, but it will take about four weeks for the company to provide a temporary power source to the area and reconstruction of a power line could take "several months."

Houston television station KHOU reported a 10-mile traffic backup on the one major highway leading into Galveston when authorities began letting people back into that city early Wednesday morning.

Ike slammed into the Texas coast at Galveston as a Category Two hurricane on Sept. 13, bringing with it torrential rain, a storm surge in excess of 20 feet and maximum sustained winds of 110 mph (see NGI, Sept. 22). Hurricane force winds were reported across the Ohio Valley and tropical storm force winds whipped through portions of the Northeast before the storm dissipated and moved north into Canada. Ike knocked out power to approximately 3.9 million electric customers in eight states.

Last Tuesday Texas Lt. Gov. David Dewhurst, testifying before the Senate Ad Hoc Subcommittee on Disaster Recovery in Washington, DC, said the preliminary economic impact from Hurricane Ike is $11.5 billion in direct costs to the state and a total economic impact of approximately $27.5-35 billion. Hurricane Ike "was one of the worst natural disasters in Texas history," he said.

Gov. Rick Perry said Ike displaced more than 1.2 million Texans.

"We hope that many of those costs will be covered by the federal government, but experience tells us that Texans suffered untold millions of dollars in damages that will not be eligible for federal reimbursement," Perry said.

In a filing with the Securities and Exchange Commission (SEC), CenterPoint said its total cost for restoration is estimated at $350-500 million, "but that estimate is preliminary at this time and costs ultimately incurred could vary from that estimate. [CenterPoint] will defer uninsured costs related to the storm restoration and believes it is entitled to recover prudently incurred storm costs in accordance with applicable regulatory and legal principles." The company expects to seek passage of legislation to allow securitization of storm restoration costs similar to special legislation passed by the Texas legislature, which permitted Entergy Gulf States to recover similar costs after Hurricane Rita in 2005, according to the SEC filing. "Alternately, [CenterPoint] has the right to seek recovery under traditional rate making principles," the company said. In the meantime, CenterPoint plans to fund the storm restoration effort from cash on hand and bank credit facilities.

Entergy's 936 MW River Bend nuclear plant in St. Francisville, LA, which was taken out of service Sept. 1 to help keep the electricity transmission grid in balance due to reduced demand in the face of Ike's predecessor, Hurricane Gustav, and had remained shut down pending repairs to siding on its turbine building, returned to service last Tuesday morning.

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