Entergy Louisiana is recommending a delay of at least three years in plans to convert a power generator in southeastern Louisiana to burn a refinery byproduct — considered a much-cheaper fuel until natural gas prices took a sharp fall. The Public Service Commission approved the project at the Little Gypsy plant in St. Charles Parish in November 2007. Entergy planned to convert an old generator at the plant from gas to petroleum coke. But lower natural gas prices, questions about new federal energy policy and overall economic uncertainty led the PSC last month to order the unit of New Orleans-based Entergy Corp. to reconsider the project and deliver a report to the commission next week.
In a filing with the PSC today, the utility company says it wants to cancel long-term contracts and put the project on extended hold.
“A longer-term delay will allow ELL to determine whether the project, in fact, represents the lowest reasonable cost alternative available to diversify ELL’s fuel mix to protect customers from volatile natural gas prices,” the filing says.
Entergy Louisiana said it estimates money spent on the project, along with contract cancellation costs, would be about $300 million, subject to negotiations with vendors. Entergy indicated it would attempt to recover those costs from its customers. The PSC would have to review any claim.
“We said from the start that this was a bad idea and we are glad that it seems that Entergy and the LPSC may agree. In three years we expect the project to look even less attractive,” says John Atkeison, with the Alliance for Affordable Energy, which opposed the conversion.
