Entergy has apparently walked away from negotiations to purchase substitute natural gas from a new gasification project in Lake Charles that could save Louisiana energy customers $400 million over 30 years. Lake Charles Cogeneration is a $2 billion project at the Port of Lake Charles to gasify petroleum coke to deliver 42 billion cubic feet of substitute natural gas to the Henry Hub annually.
The project was designed to provide a hedge against volatile natural gas prices in a state that is heavily dependent upon it for electric utilities. However, in a letter to Louisiana Public Service Chairman Lambert Boissiere III, Lake Charles Cogeneration Vice President Donald Maley writes that “little progress” has been made with Entergy on a proposed contract, and that in October, Entergy terminated all discussions about the long-term purchase of substitute natural gas.
In a statement to Daily Report today, Entergy spokesman Philip Allison says the company expressed serious concerns about the project—and doubts about the projected financial savings—after two years of negotiations. “Entergy Services Inc. attempted numerous times to explain to Lake Charles Cogeneration the need to address certain key operational and pricing elements in any contract,” Allison says.
Wednesday, the PSC will consider a request from Lake Charles Cogeneration to investigate the benefits of its project. To read Lake Charles Cogeneration’s letter to the PSC, click here. To read Entergy’s statement to Daily Report, click here.—Penny Brown Font