[StBernard] Entergy Sues Uncle Sam for $69 Million

[Westley Annis]

Entergy Sues Uncle Sam for $69 Million
By SABRINA CANFIELD 
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     NEW ORLEANS (CN) - Entergy says the Army Corps of Engineers' negligence
in building levees cost it $69 million in the aftermath of Hurricane Katrina
and forced it into bankruptcy. 
     Entergy and its subsidiaries say their substantial assets in the New
Orleans area were flooded by Hurricane Katrina's massive storm surge that
was funneled through the Mississippi River Gulf Outlet (MRGO) and other
Corps of Engineers-maintained waterways. It says its assets were damaged,
lost or destroyed. 
     The utility company says the disaster facilitated by the Corps of
Engineers' shoddy planning and maintenance forced a hike in utility rates
for Entergy to continue to deliver services to customers in Orleans, St.
Bernard and Plaquemines Parishes. 
     Hartford Steam Boiler Inspection and Insurance Co., Entergy's insurer,
has paid $69.5 million for a portion of the losses of assets owned by the
Entergy Companies.
     After Hurricane Katrina, the greater New Orleans area suffered massive
flooding caused not by the natural forces of the storm, but by the faulty
design, construction and maintenance of waterways, levees and floodwalls for
which the Army Corps of Engineers was responsible, according to the federal
complaint.
     In the fall of 2009, U.S. District Stanwood R. Duval Jr. found that the
MRGO was flawed in two fundamental aspects. First, the Corps failed to take
into account the waterway's inherent, known capacity to funnel rapidly
accelerated, hurricane-driven storm surges, increasing the force and height
of a storm surge in populated areas.
     Second, the Corps failed to take into account the destruction of
wetlands it knew would be caused by construction of the MRGO, and the
consequent salt water intrusion into wetlands, thereby erasing a natural
buffer against storm surge and exacerbating the funnel effect of the MRGO's
faulty design. 
     On Aug. 29, 2005, a tidal surge from Hurricane Katrina rushed from the
Gulf of Mexico through the MRGO and collided where it meets the Gulf
Intracoastal Waterway with another storm surge from Lake Borgne, flooding
New Orleans East, portions of Gentilly, the Ninth Ward, Plaquemines and St.
Bernard Parishes. 
     East of New Orleans, as Lake Borgne crested with the storm surge, the
manmade structures funneled and poured salt water into the marshes and
wetlands of South Louisiana. In addition to the homes and businesses that
were inundated with the waters, many elements of the area's critical utility
infrastructure were damaged and destroyed: the natural gas pipelines that
served New Orleans were infiltrated and filled with salt water; electric
transmission and distribution facilities in Gentilly, New Orleans East, the
Ninth Ward, St. Bernard and Plaquemines Parishes were flooded and in some
cases washed away; and numerous other utility assets were decimated. As a
result, Entergy says, residents of these areas were left without utility
services for a long time, and have faced higher utility rates due to the
unprecedented need for repairs and restoration as well as the diminished
population of ratepayers among whom the utilities' operating costs must be
shared. 
     Entergy seeks economic and compensatory damages under to the Federal
Torts Claims Act to recover for damages to its fixed assets, past and future
business opportunity, and operating income s. 
     The energy company is represented by Wendy Robinson with Gordon, Arata
& McCollam.