There was an Oct. 6 status conference at the Louisiana Public Service Commission about an Aug. 25 application from three Entergy Corp. (NYSE: ETR) subsidiaries for approval of the 980-MW St. Charles Energy Center, with the administrative law judge handling the case issuing an order the next day laying out the case review schedule.
The schedule includes:
- Jan. 21, 2016 – PSC staff and intervenors’ direct testimony is due;
- March 21, 2016 – deadline for dispositive motions;
- April 13, 2016 – pre-hearing briefs are due; and
- April 18-22, 2016 – hearing (may last less time if needed).
Notable is that the application was filed on Aug. 25. The commission on Sept. 14 approved the business combination of Entergy Louisiana LLC and Entergy Gulf States Louisiana LLC. As part of the business combination, Entergy Louisiana LLC transferred the rights to its name to Entergy Louisiana Power LLC (ELP), and ELP assumed the name Entergy Louisiana LLC. Filing the Aug. 5 application were Entergy Louisiana LLC, Entergy Gulf States Louisiana LLC and Entergy Louisiana Power LLC.
They are seeking commission approval to construct the St. Charles Power Station (SCPS), which is a combined cycle gas turbine (CCGT) resource with a nominal capacity of 980 MW. The project is designed with two Mitsubishi Hitachi Power Systems (MHPS) 501 GAC combustion turbines, two Nooter Eriksen heat recovery steam generators (HRSGS) with duct firing, one Toshiba steam turbine generator in a 2×1 CCGT configuration, and other balance of plant equipment, including a cooling tower for closed-cycle cooling operations.
Amite South region has a particular need for new capacity
Phillip R. May, President and Chief Executive Officer of Entergy Louisiana LLC and Entergy Gulf States Louisiana LLC, said in supporting testimony that the facility will be located in St. Charles Parish, Louisiana. “As they work to modernize their electric infrastructure, the Companies have signicant long-term supply needs for base-load and core-load-following generation capacity,” May noted. “Considering environmental regulations and current long-terrn forecasts for natural gas prices, CCGT generating resources such as SCPS are technologically and economically well-suited for those supply roles. Indeed, as I discuss further below, SCPS will pay for itself in supply—cost savings in less than ten years, saving customers over $1.4 billion (on a net present value basis) during the expected life of the plant.”
May said the Entergy companies have a specific need for new generation in the supplyconstrained Amite South planning region — where SCPS will be constructed — to maintain and improve reliability in the region as the existing generation eet ages and unit deactivations become more probable. SCPS was competitively selected in a commission and independently monitored request for proposal (RFP) process that addressed the supply needs of Amite South, and SCPS had the lowest acquisition cost of all the proposals submitted in the RFP, May wrote. I
If the companies receive the approvals requested from the Louisiana PSC, and there are no unanticipated project delays related to the procurement of all of the necessary permits, materials, and supplies, the project is expected to enter service in the first half of 2019.
Amite South refers to a portion of Southeast Louisiana that is south of the Amite Substation and runs generally from east of the Baton Rouge, Louisiana, metropolitan area to the Mississippi state line and south to the Gulf of Mexico. The Amite South region contains concentrated loads represented by the greater New Orleans area and the petrochemical industry located along the Mississippi River. The unique geographical position of Amite South makes this region heavily dependent on both the transmission tie lines from the northwest (the Baton Rouge area) and from the north (the area north of Lake Pontchartrain) as well as generation facilities in Amite South, some of which have long start-up times, to serve the electrical load located in Amite South.
The Downstream of Gypsy (DSG) sub-region refers to the southeast portion of Amite South and generally extends down-river of ELL’s Little Gypsy Station and encompasses all of Entergy Louisiana’s and Entergy New Orleans’ service footprint to the south of Lake Pontchartrain, up to the Mississippi state border, and bounded by the Gulf of Mexico to the south.
New generation is needed in Amite South to maintain reliability as the existing generation eet ages and ultimately deactivates. Excluding Entergy Louisiana’s new Ninemile Point Unit 6, the MW-weighted average age of the fossil units in Amite South is 41 years. Based on projected in-region load growth, unit retirements, and purchased power agreement (PPA) expirations, it may be necessary to add new generation every five years, depending on the size of the capacity addition, in order to continue meeting reliability needs within Amite South.
SCPS will be located in St. Charles Parish in Montz, Louisiana. The proposed project site consists of 20 acres adjacent to and northwest of Entergy Louisiana’s existing Little Gypsy units..
May said the Entergy companies selected Chicago Bridge & Iron Inc. (CB&I) to provide engineering, procurement, and construction (EPC) services for the project. The project will be constructed by CB&I under a fixed-price form of EPC contract, similar to what was successfully used for Ninemile 6. The EPC contract requires substantial completion of the project 34 months after a final notice to proceed is issued by the companies, provided the notice is issued on or before Aug. 1, 2016.
One Littie Gypsy unit shut; three Michoud and Ninemile units to shut in 2016
Charles E. DeGeorge, employed by Entergy Services Inc. as Manager, Generation Planning and Models for System Planning and Operations, noted in companion testimony that roughly one-half of the capacity in the companies’ current combined resource portfolio is from legacy gas generation, which has been in-service for 40-60 years. While the companies have made and will continue to make economic investments to maintain these generators, many of these generators are assumed to reach the end of their ecoomic useful lives and deactivate during the planning horizon. These unit deactivations are a signicant driver of the companies’ need for additional generation regardless of any assumed load growth.
Projected load plus planning reserve margin needs exceed the companies’ supply resources, which indicates a need to add capacity. Under the 12% planning reserve margin, the companies will need approximately 1.9 GW of capacity by year 2020 and approximately 9.5 GW of capacity by 2034. However, although the companies’ net capacity position is a decit of 1.9 GW by 2020, the companies are short roughly 4.7 GW of base load capacity by 2020.
DeGeorge noted that Little Gypsy Unit 1 experienced a forced outage and upon further assessment, it was determined that repair and continued operation of this unit would not be economic. Therefore the unit was retired effective June 1, 2015. “As generating units age, and particularly in situations of continued high utilization, it is reasonable to expect that greater amounts of capital and operations and maintenance (‘O&M’) will be required to maintain reliable operations,” he added. “The planning process routinely assesses the economic viability of existing generating units as conditions change and new information becomes available. For example, recent assessments concluded that the expected cost and risk of continuing to operate Michoud Unit 2, Michoud Unit 3, and Ninemile Unit 3 exceeded the expected benefit; therefore, the decision was made to deactivate these units effective June 1, 2016.”