Dive Brief:
- Despite recent additions to its portfolio, Entergy will need to construct new power plants to meet growing Louisiana demand, likely meaning higher rates for customers, The Advocate reports.
- Last week Entergy Louisiana LLC added a new power plant to its fleet with the completion of the 560-MW Ninemile 6 combined-cycle gas turbine unit in Westwego, La.
- And earlier this month Entergy signed an agreement to acquire the 1,980-MW gas-fired Union Power Station near El Dorado, Ark.
Dive Insight:
As Louisiana's need for power grows, fueled by industry growth backed by cheap natural gas and low utility rates, Entergy is looking to bolster its generating fleet. The company recently announced it would acquire a plant in Arkansas and has added a facility in Westwego, La., and The Advocate reports Entergy is looking to bring in power from elsewhere as well.
“All that will help, but ultimately we’re going to need to build new generation,” Phillip R. May, the head of Entergy’s Louisiana operations, told The Advocate. “It has to be new steel in the ground to meet all of this new load. … We’re on the front end of a pretty steep curve in growth.”
As for the recent additions, under the asset purchase agreement Entergy Arkansas and Entergy Texas have each agreed to acquire one unit at the Union Power Station and Entergy Gulf States Louisiana has agreed to acquire two units. Entergy New Orleans will receive 20% of the output from the Entergy Gulf States Louisiana units via an at-cost purchase power agreement, subject to City Council of New Orleans approval.
The Ninemile 6 plant, built over the course of three years and completed ahead of schedule, was designed to meet the state's growing industrial demand.
“Our rapidly growing economy is bringing thousands of new jobs and residents to our state, which is driving a large demand for energy,” May said. “Adding Ninemile 6 to our portfolio gives us an opportunity to meet that new need, while satisfying our customers’ expectations of safe, reliable and affordable energy."
