Editor’s note: This story has been updated to clarify information provided by Energy on the benefit to customers over the life of the unit.
Nearly 399,000 former Entergy Gulf States Louisiana customers who are now being serviced under the Entergy Louisiana umbrella—including many in the Capital Region—will see their electric bills rise as they help to pay off their portion of a $948 million purchase of an Arkansas-based Union Power Station.
Entergy Louisiana, Entergy Arkansas, and Entergy New Orleans closed on the purchase of the 1,980 megawatt power station last Thursday. Mike Burns, Entergy spokesman, says Entergy Gulf States Louisiana originally entered into the agreement to purchase the power station, but the subsidiary merged with Entergy Louisiana.
Burns explains that a typical residential customer using 1,000 kilowatt hours per month will see an increase of roughly $6.94 per month, which will be offset by fuel savings of $2.64, he says.
Entergy customers—formerly Gulf State Utilities customers living in the area spanning Livingston Parish and going west along both sides of Interstate 10 to the Texas border—will see the higher rates beginning this month, Entergy officials say.
Over time, the company expects the cost of the plant to customers to decrease as it ages and depreciates; meanwhile, fuel savings are likely to increase as the cost of natural gas increases.
Burns says over the life of the unit, there will be a benefit of approximately $240 million.
Entergy officials tout the purchase as significant and beneficial to customers. Phillip May, president and CEO of Entergy Louisiana, says the power station will help modernize Entergy’s aging generating fleet, provide for clean energy resources and efficiency, and help meet the growing demand for power.
“It effectively reduces the risk that customers will be exposed to spikes in power prices,” says May.
Entergy Louisiana purchased the power station along with subsidiaries Entergy Arkansas Inc. and Entergy New Orleans from Entegra TC LLC. Entergy Arkansas and Entergy New Orleans each acquired one unit of the station and Entergy Louisiana acquired two units, the release says. Entergy announced the transaction late Friday.
Entergy describes the Union Power Station “as a highly-efficient, natural gas-fired generating facility.” The plant has four-combined-cycle gas-fired generating units, each rated at 495 megawatts.
—Alexandria Burris
