The Entergy (NYSE:ETR) subsidiary serving New Orleans has filed an application with New Orleans City Council to develop a $216m natural gas generation project at its existing Michoud site in an industrial area on the eastern edge of the city.
If approved, the 226-MW New Orleans Power Station is expected to be operational in the second half of 2019, Entergy New Orleans said in a June 20 news release. The utility would build a combustion turbine (CT) after retiring several fossil units this year.
Entergy New Orleans is seeking council approval of its request by Jan. 31, 2017.
The June 1, 2016, deactivations of the 1960s-era Michoud Units 2 and 3, which were driven by economic decisions based on maintenance and operational issues, resulted in the loss of approximately 781 MW of local generating capacity.
While the acquisition of the Union Power Station Unit 1 near El Dorado, Arkansas, and the purchased power agreement with Entergy Louisiana’s Ninemile 6 generating unit in Westwego help offset a substantial portion of New Orleans’ overall need, the company still has a need for capacity, including a substantial need for peaking and reserve resources, Entergy said in a fact sheet. As a result, Entergy New Orleans has a need for overall capacity as well as a need for local peaking and reserve capacity resources here in Orleans Parish.
A combustion turbine unit is used to supply power during peak demand periods when electricity use is high, and also can aid in the restoration process following a hurricane by providing a local source of generation. CT units start quickly and while they are mainly used short-term to meet temporary energy needs, they also are capable of operating for extended periods of time, Entergy noted.
In 2008, for example, Hurricane Gustav caused severe damage to the transmission lines serving the New Orleans metropolitan area, creating a situation where the city essentially became an island and no longer was connected to the rest of the electrical grid. While many transmission system and reliability upgrades have been made since Hurricane Gustav, the proposed plant will aid in getting the city back up and running faster.
“Through the council’s integrated resource plan – or IRP – process, we take future power demand into account as well as all feasible existing and potential resources available to safely, reliably and affordably serve our customers,” said Charles Rice, president and CEO of Entergy New Orleans. “Building the New Orleans Power Station will improve power supply conditions in the city and, along with our other resources, will allow us to serve New Orleans during periods of peak demand and unplanned events.”
Entergy New Orleans filed its IRP report with the council on Feb. 1, 2016. The plan’s preferred portfolio reflects a balanced and reasonable way to meet customers’ needs over the next two decades. The IRP process is ongoing and the council is expected to consider Entergy New Orleans’ IRP later this year.
In February 2016, Entergy New Orleans broke ground on the city’s first utility-scale solar project. The 1-MW project will pilot the integration of utility-scale solar generation and state-of-the-art battery-storage technology while simultaneously establishing a benchmark for utility-scale solar generation performance in the metro New Orleans area.
And in March 2016, crews completed the second of a two-phase technological upgrade to New Orleans’ electric power transmission system – a $30m capital investment to enhance. The upgrade was required by the Midcontinent Independent System Operator prior to the June 1 deactivation of Michoud units 2 and 3.