Entergy expands natural gas fleet down South; uprates Grand Gulf

Entergy (NYSE:ETR) is using both a power plant purchase and new construction to add new natural gas-fueled generation in Louisiana and Mississippi.

The company is in the process of buying the Hinds combined-cycle gas plant in Mississippi, and seeking approval for rate recovery. Entergy is also preparing to start construction on the Ninemile 6 natural gas unit near New Orleans, La.

The Mississippi Public Service Commission on Feb. 28 approved Entergy’s certificate of public convenience and necessity to buy the roughly 450-MW Hinds combined-cycle gas plant from KGen Power, a company spokesperson confirmed recently. But the Mississippi PSC must still approve Entergy’s request for rate recovery for the power plant.

A rate recovery decision should hopefully come in June, the spokesperson said. Entergy Mississippi announced its plans to buy the plant in Jackson, Miss., in 2011 for $206m. Entergy said the price is far less than the cost of building a similar plant.

Entergy plans to run Hinds as both a baseload and load-following generator, the spokesperson said. The Hinds plant has been in operation since spring 2001.

Meanwhile, the Shaw Group (NYSE:SHAW) said March 26 that it has received “full notice to proceed” with construction of a new 550-MW natural gas combined-cycle power plant for Entergy in Louisiana, near New Orleans.

The 550-MW Ninemile 6 plant is scheduled to begin commercial operation in early 2015. The new plant is being built for Entergy Louisiana and Entergy Gulf States Louisiana.

The Entergy companies got certification to build the unit March 21 from the Louisiana Public Service Commission, Entergy said in a March 26 news release. Entergy had filed its application with the Louisiana PSC in June 2011.

Entergy Louisiana will construct and own Ninemile unit 6 and retain 55% of the capacity and energy output of the unit, while Entergy Gulf States Louisiana and Entergy New Orleans will purchase 25% and 20%, respectively, of the capacity and energy of the unit via life-of-unit power purchase agreements.  

The cost to construct the unit is currently estimated at $721m. The new Ninemile 6 unit will replace Ninemile units 1 and 2, which were built in the 1950s, according to a company fact sheet. The Ninemile 6 project is expected to employ several hundred temporary construction workers and 17 permanent employees.

Grand Gulf nuclear uprate also underway

Shaw, which is Ninemile’s engineering, procurement and construction contractor, also supports Entergy with its nuclear assets. Shaw subsidiaries have provided engineering or maintenance services to nuclear power plants owned or purchased by Entergy since 1973. Shaw currently is providing extended power uprate plant modifications at Entergy’s Grand Gulf nuclear station in Port Gibson, Miss.

Grand Gulf is undergoing a 13% power uprate project that should bring the total generating output of the nuclear plant to 1,443 MW, Entergy has said. Grand Gulf is a boiling water reactor.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.