The Louisiana Public Service Commission (LPSC), in an order dated Jan. 6, adopted a proposed uncontested stipulated settlement filed last December involving Entergy Gulf States Louisiana’s proposed Lake Charles Transmission Project.
The settlement was entered into by LPSC staff, Entergy Gulf States Louisiana – which, since the application in the docket was filed, has combined into one company, Entergy Louisiana – the Louisiana Energy Users Group and the Midcontinent ISO (MISO). Cleco Power, Occidental Chemical and the NRG (NYSE:NRG) Companies did not object, the LPSC added.
The order, which was decided at the LPSC’s Dec. 16, 2015, business and executive session, resolves all issues regarding Entergy Louisiana’s June 2015 application for certification of the Lake Charles project in accordance with the LPSC’s Oct. 10 2013 general order in Docket No. R-26018 (the transmission certification order).
The transmission certification order, the LPSC said, lays the groundwork of the commission to exercise its jurisdiction over the certification and siting of certain transmission facilities in Louisiana to achieve the regulatory goal of promoting safe, reliable utility service at the lowest reasonable rates. That order requires the LPSC approval of certain major transmission facilities with a cost of construction projected to exceed $20m.
The LPSC added that Entergy Louisiana’s application sought a ruling that the portfolio of transmission projects, referred to collectively as the Lake Charles Transmission Project, should be certified and that it serves the public convenience and necessity.
The Lake Charles project has an anticipated in-service date of June 2018, the LPSC added, noting that Entergy Louisiana in its application provided an estimated cost to build the project of $187m. Through discovery, the company provided an updated construction cost estimate of $159m, the LPSC said, noting that the projects will be funded from the company’s operating funds.
The LPSC said that no commission approval of the Lake Charles project is required under the commission’s 2013 transmission certification order, and thus, LPSC approval of the project is not intended to modify the requirements or exemptions set forth in that transmission certification order.
However, the requested relief is granted because the Lake Charles project is needed for reliability purposes, is a cost-effective solution to the reliability needs, is in the public interest and in the interests of Entergy’s ratepayers, the LPSC said.
The portfolio of projects is designed to provide the injection of a new 500-kV transmission source into the Lake Charles area, where Entergy Louisiana is projecting load growth of more than 800 MW by 2019. The LPSC added that those projects consist of:
- The Nelson to Hartburg 500-kV Transmission Line – Entergy Louisiana will extend Line 520 for about 500 feet to cut into and out of the new Rhodes 500-kV switchyard
- The Rhodes Component – The company will build a new three-breaker switchyard at the point of connection to the existing Nelson to Hartburg 500-kV transmission line. The new switchyard, known as the Rhodes switchyard, will contain three nodes for the 500-kV transmission line terminations. As part of that component, about seven miles of new single-circuit, 500-kV transmission line will be built from the Rhodes switchyard to the Patton substation
- The Patton Component – The company will build a new bulk transmission substation, to be named Patton, that will contain a new 1,200 MVA, 500/230-kV autotransformer bank, which substation will be accessible to the 230-kV, 138-kV and 69-kV transmission lines in the area in order to accommodate potential future expansions. The Patton substation will be located near Interstate 10 in Sulphur, La. As part of this component, four miles of new single-circuit, 230-kV transmission line will be built from the Patton substation to the Carlyss substation
- The Carlyss and Solac substations – The company will expand the existing 230-kV yard at the Carlyss substation to a breaker-and-a-half electrical arrangement, which will create line nodes for the Carlyss to Big Lake 230-kV transmission line and the Patton to Carlyss 230-kV transmission line. The substation will be modified to receive the new transmission line by adding a new bus tie breaker and other structures necessary to receive the new Carlyss to Solac 230-kV transmission line. In addition, the Solac 230-kV substation will be expanded by adding the needed breakers, switches and structural steel necessary to receive the new line from Carlyss
- The Carlyss to Solac 230-kV Tranmission Line – The company will build about 12 miles of new single-circuit, 230-kV transmission line from the Carlyss substation to the existing Solac substation
- The company will be required to complete several transmission line re-routes as part of the Lake Charles project. Those lines consist of 69-kV and 230-kV at various locations around the different substation and transmission line routes
Noting that Entergy Louisiana integrated into MISO in December 2013, the LPSC said that the Lake Charles project is part of the MISO Transmission Expansion Plan (MTEP) 15 process, but was submitted as an out-of-cycle project that was approved by the MISO Board last April.
Of the settlement, the LPSC said that its terms include:
- The construction of the portfolio of projects will serve the public convenience and necessity, is in the public interest, and therefore the LPSC should make a finding that undertaking construction thereof serve the public convenience and necessity, and meets the conditions of certification in the LPSC’s transmission certification order
- The prudently incurred costs associated with the Lake Charles projects are eligible for recovery through the normal course of ratemaking. Assuming the formula rate plan (FRP) continues in current form and the LPSC has not ordered otherwise, the Lake Charles project costs will be included in calculating the total FRP, and any rate effects will result from the overall FRP calculation
- Due to the magnitude of the expected investment associated with the Lake Charles project, within 60 days of the project being placed in service, the company is required to file a post-construction report into the record of the proceeding
- The LPSC approval should in no manner serve as a determination of the prudence of the Lake Charles project’s final costs
Entergy Louisiana is a subsidiary of Entergy (NYSE:ETR).