Occidental Chemical on June 3 filed a post-hearing brief with the Louisiana Public Service Commission criticizing the fact that Entergy (NYSE: ETR) subsidiaries opted for the self-build, 980-MW St. Charles power project over Occidental’s offer to sell power out of an existing plant in Louisiana.
Occidental (OxyChem) said in its June 3 brief that briefs from Entergy Louisiana LLC (ELL) and PSC staff “are rife with suppositions and accusations, but contain little evidence to support ELL’s application. ELL continues to opportunistically Vacillate between claiming that St. Charles CCGT is needed to meet an overall, system-wide need and then claiming that it is needed to meet a specific need within Amite South. At this stage of the proceeding, however, it has become abundantly clear that ELL has not proven and cannot justify the St. Charles CCGT on a purported Amite South need.
“While ELL continues to claim a non-specific, general need in Amite South, it is uncontroverted that ELL has conducted no studies or analysis that establish a reliability need in Amite South. It is uncontroverted that ELL cannot tell the Commission how many megawatts it supposedly needs to solve purported local issues in Amite South, and having failed to make that case, ELL cannot say whether the St. Charles CCGT will solve this alleged, undefined problem. ELL also cannot say whether transmission could partially or entirely resolve any purported Amite South needs. When pressed on these issues, ELL continually pivots back to its alleged system-wide need to divert the Commission’s attention from ELL’s inability to prove an Amite South need. The Commission should not be fooled by these tactics.
“ELL’s failure to prove a local reliability need for the St. Charles CCGT in Amite South issue is fatal to its case. Despite its inability to identify a local reliability need in Amite South, ELL designed an RFP solely to solicit a new resource to be located in Amite South. Even if ELL could prove that it has a system-wide need, which OxyChem disputes, ELL cannot establish that the resource selected in the Amite South RFP meets the requirements of the 1983 General Order and the MBMO Order. The exclusion of entire categories of resources, including expiring PPAs, which ELL admits could satisfy a system-wide need, is incurable. No reasonable utility would ever restrict an RFP for a system-wide need in the manner that ELL restricted the Amite South RFP. ELL’s head of planning, Mr. Walz, admits this. Moreover, ELL itself designed a subsequent RFP (the WOTAB RFP) in a much less restrictive manner, providing further proof that even ELL knows that the Amite South RFP was improper to address a system-wide need. It would be the height of imprudence for a utility to purposelly exclude resources that can satisfy a system-wide need, if addressing such a need is the goal of the utility’s RFP.
“Putting aside ELL’s failure to justify the St. Charles CCGT based on local needs in Amite South, ELL has also failed to prove a system-wide need that would justify the project. ELL’s claim that it will need twice the amount of the St. Charles CCGT’s capacity by 2020 is patently false and is supported only by ELL’s manipulation of undisputed facts. In short, ELL (and by extension the LPSC Staff) have failed to show that the St. Charles CCGT can clear the very first hurdle in resource certification under the Commission’s orders and regulations: proving that the facility is needed by 2019. Accordingly, the Commission should reject ELL’s application.
“ELL and Staff inappropriately attack OxyChem’s motives in this case, and ask this Tribunal to ignore reality and overlook numerous issues underlying ELL’s improper presentation of its system-wide resource need. They ask this Tribunal to ignore the inconsistent treatment of the OxyChem and Carville Purchased Power Agreements (‘PPAS’) in ELL’s planning analyses, the ever-declining load growth projections, the many hundreds of megawatts (‘MW’) of capacity being sought under a system-wide need through the less-restrictive Request for Proposals (‘RFP’) for the West of the Atchafalaya Basin (‘WOTAB’) region, and ELL’s deactivation decisions that are currently subject to a prudence review. Each of these issues independently undermine ELL’s claimed system-wide need, and each merits independent investigation. As discussed in further detail below, if no changes are made to ELL’s analysis except to use ELL’s most recent load forecast and assume the current PPAs are extended, then ELL has shown nothing more than a temporary need in a single year before 2026, which can easily be satised much more cheaply with a short-term market purchase. After all the appropriate adjustments are made to ELL’s inappropriate and self-serving resource presentation, ELL shows no system-wide need before 2027. ELL’s presentation is simply insuffcient to justify spending $868 million for a new power plant.”
Occidental later added: “The PPAs, including OxyChem’s PPA, remain a viable option for ELL. Despite ELL’s claims that OxyChem’s December 2014 ‘offer’ to renew and/or extend the PPA was too high, ELL’s witnesses stated that ELL made no counter-offer to OxyChem. ELL has done nothing to explore extension since. ELL’s refusal to deal with OxyChem renders its entire need analysis dubious and result-oriented.”
Entergy’s proposed St. Charles Power Station (SCPS) is a 980-MW (nominal) combined-cycle gas turbine (CCGT) facility to be built in St. Charles Parish, Louisiana.
Occidental has a CCGT cogeneration facility at its Taft chemical plant in St. Charles Parish and sells certain energy and capacity from that facility to ELL under a long-term power purchase agreement (PPA) that will expire in 2018. In this docket, Occidental has asked the commission to dismiss ELL’s application and order it to re-issue the 2014 Amite South RFP or, alternatively, to allow Occidental to displace 500 MW of the capacity that ELL proposes to add by constructing the SCPS.
Said Entergy Louisiana in its own June 3 brief: “The evidentiary record in this proceeding has demonstrated, and the initial round of post-hearing briefs has confirmed, that certifying SCPS is not a close call.
“The opposing intervenors — Occidental Chemical Corporation (‘Oxy’), Calpine Corporation’s (‘Calpine’), and the Louisiana Energy Users Group (‘LEUG’) (collectively, the ‘Opposing Intervenors’) — continue to advocate a wait-and-see approach to resource planning that is irresponsible, imprudent, and plainly motivated by the economic self-interests of Calpine and Oxy, a leading member of LEUG. As Staff notes, the positions of Oxy and Calpine in this matter reflect their desire to ‘make some money off of their facilities.’
“The record is clear in this proceeding that ELL has a substantial overall need for capacity. In fact, under every load and capability forecast (hereinafter sometimes referred to as ‘ELL’s need analysis’) presented in this case, including the version with the lowest peak load, ELL has demonstrated an overall long-term capacity deficit by Planning Year 2019 and beyond that exceeds twice the capacity of SCPS.’ As ELL and Staff have shown, in conducting its need analysis, the Company has employed reasonable resource planning assumptions betting its obligation to reliably serve customers at the lowest reasonable cost. By contrast, the Opposing Intervenors make numerous changes to ELL’s need analysis based on the following unsupported and highly questionable assumptions designed to downplay the need for SCPS and bolster the likelihood of capacity purchases from their own resources.”
Calpine has offered to sell to Entergy an unfinished, gas-fired power plant in Lousiana to replace at least part of the capacity represented by the St. Charles project.