On Jan. 26, Entergy Louisiana held a grand opening for Ninemile 6, a $655 million power plant in Westwego. Built ahead of schedule and under budget, it’s the first new plant built for the state’s largest utility in almost 30 years.
As detailed in a feature from the new issue of 10/12 Industry Report, Entergy is touting the 560-megawatt unit as the most modern, energy-efficient and environmentally friendly plant in its arsenal. Phillip May, CEO of Entergy Louisiana and Entergy Gulf States, says it will save customers about $50 million this year versus what they likely would have spent on electricity from less efficient sources. While owned by Entergy Louisiana, Entergy Gulf States and Entergy New Orleans will buy 25% and 20% of its output respectively.
It’s a shiny new addition to Entergy’s aging fleet, and the company says it will help Louisiana meet the power needs of the burgeoning industrial expansion.
“Our rapidly growing economy is bringing thousands of new jobs and residents to our state, which is driving a large demand for energy,” May says.
But with some $100 billion or more worth of projects possibly on the way in south Louisiana, Ninemile 6 won’t be enough. Entergy expects to spend billions to build new plants, buy existing ones, and establish new infrastructure to meet the demand in the Lake Charles area and along the Mississippi River industrial corridor.
Ratepayers will be on the hook for all this, which is why regulators say they will make sure the utilities don’t build too much or too soon. While some stakeholders worry that residential and commercial customers will end up subsidizing investments made to serve heavy industry, May says rates should remain “relatively flat.”
In fact, he argues that, far from being a burden, the industrial expansion is a chance to fund improvements that most everyone agrees would have to be made eventually anyway. Not everyone buys into Entergy’s line of thinking, however.
“Entergy’s business and residential customers should be concerned because they’re footing the bill for these new power plants,” says Casey DeMoss of the New Orleans-based Alliance for Affordable Energy.
Growth of commercial and residential energy needs has been fairly flat, she says, and the Louisiana Public Service Commission recently approved a new program to further encourage energy conservation. Industrial customers pay about 4 cents per kilowatt hour, while residential customers pay more like 6 to 8 cents per kilowatt hour, DeMoss says. The “industrial renaissance” is a good thing, she adds, but all customers are being asked to pay for it.
Read the full feature. Send your comments to edtior@1012industryreport.com.
