Louisiana senators seek 50% OCS royalty share for Katrina relief

Washington (Platts)--22Sep2005

As part of a $250-bil Hurricane Katrina federal aid package that will be
introduced in the Senate Thursday afternoon, both of Louisiana's senators are
calling for the state to receive 50% of revenues from federal leasing for
Outer Continental Shelf oil and gas drilling off its coast. 
     Republican senator David Vitter and Democratic senator Mary Landrieu said
the increased revenue share would put the state on the same footing as states
with interior lands drilling and would provide a key component of relief. 
     Leasing royalty share would be "absolutely vital" to Louisiana's
recovery, Vitter said, adding that the amount could range between $3- and
$4-bil annually. The money would be used to restore coastal areas and critical
infrastructure, Landrieu said, adding that the tie-in is that Louisiana
provides energy security to the nation and needs help rebuilding.
     Landrieu said of Katrina's aftermath that this is "not a local problem,"
or a state problem. It is a "national tragedy and it needs an unprecedented
national response."

LOUISIANA AID BILL SEEKS FACILITY, REVENUE RECOVERY FOR IOUS
     
     The federal aid package includes an "electric utility relief" provision
geared to financially compensate electric utilities and gas-distribution
companies in Louisiana for direct losses related to rebuilding, repairing and
restoring transmission and generation facilities and services.
     The package also has a provision to compensate utility and gas companies
for "the loss of a significant part of a customer base for a sustained period
of time," according to a synopsis of the bill from Sen Landrieu's office.
     The senators could not specify a dollar amount for electric utility
relief but acknowledged that such relief for investor-owned utilities is
"unprecedented."
     "Over 1-mil people were displaced," Landrieu said, adding that if the
assistance is not provided for energy company losses "people in Louisiana will
be triple-penalized if Entergy [Corp] needs to pick up the tab for the
region." 
     The bill was described by Landrieu's staff as akin to "assistance
provided to airlines after Sept 11." A Landrieu aide also said the legislation
would change federal law to allow IOUs to apply for the same post-disaster
federal assistance currently allowed for electric cooperatives and municipal
utilities.   
                         ---Katharine Fraser, katharine_fraser@platts.com 
                         ---Cathy Cash, cathy_cash@platts.com

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