Power Plant Subsidence

Entergy's former Michoud power plant on Old Gentilly Road in New Orleans East, pictured here on Aug. 1, 2016.

Advocate file photo by MATTHEW HINTON

After nearly two years of debate, a New Orleans City Council committee is expected to vote Wednesday on a controversial plan to build a new power plant in New Orleans East, a proposal that has exposed sharp divisions of thought about the future of energy generation in New Orleans.

The council’s Utility Committee must decide whether the city should authorize Entergy New Orleans to replace the decades-old Michoud Power Plant shuttered last year with a gas-fired, sleeker replacement on Old Gentilly Road, as the company has proposed.

Staunchly opposed to that idea are many community organizers, who say Entergy should instead use a combination of solar and battery power, so-called “demand-side” management approaches, and transmission line upgrades to meet residents' needs during times when demand for electricity peaks.

Helping the council come to its decision are its longtime utility regulation consultants, who back a proposal put forth by Entergy for a $210 million, 128-megawatt plant. The utility also has proposed a larger $232 million, 226-megawatt plant, but the advisers say the smaller version would support the kind of renewable generation some advocates want and could quickly restore power to the city after a major storm.

Although the council typically goes along with its advisers' suggestions, opposition to both Entergy proposals is particularly strong, and it comes at a time when Mayor Mitch Landrieu’s administration has tried to position the city as environmentally conscious and less reliant on natural gas and other fossil fuels.

Either proposed new plant would be used for both peak and reserve capacity during times of big demand, such as the summer. The plant also would restore a local source of electricity generation to New Orleans; at present, Entergy buys most of its power on the open market outside of the city and transmits it across long lines.

The council's consultants have praised the smaller proposal's "black-start" capability, a technology that would allow it to start up and power homes even when the rest of Entergy's grid goes dark, such as after a hurricane. 

Council members’ thoughts, by and large, are a mystery, although Councilwoman Susan Guidry has told the online news outlet The Lens that she thinks a vote should be delayed until the council fully understands the risks and can explore alternatives. A leading neighborhood group in her district, the Mid-City Neighborhood Organization, opposes the plant.  

Other council members refused to discuss the matter ahead of Wednesday’s meeting.

Meanwhile, Entergy’s critics have consistently sounded off in recent weeks, casting the utility as a profit-obsessed dinosaur in the world of energy generation.

Entergy has dismissed modern “demand-side” approaches, which could require it to withhold electricity during peak times to big users who don’t need it, according to officials with the Alliance for Affordable Energy, the Deep South Center for Environmental Justice and the Sierra Club. That would ease demand on the entire system.

The critics claim the utility also is not interested in battery storage technologies, which could store solar energy for use later, when the sun is not shining.

Combining those techniques with transmission upgrades and purchasing power from outside sources would be a better deal for New Orleans residents, the opponents say.

"Essentially, (Entergy) wants New Orleans to remain mired in the past, to build yet another fossil-fueled power plant that is unnecessary, will cost New Orleans ratepayers millions of dollars, will subject residents to increased levels of air pollution, and contribute to climate change," the three groups wrote in a recent briefing to the council.

In an interview Wednesday, Entergy officials said the utility can't expand its renewable sources fast enough to meet peak demands at this time.

So far, Entergy has a 1 megawatt solar plant on Downman Road and plans to introduce 100 megawatts of renewables to its portfolio later on, CEO Charles Rice and counsel Brian Guillot said. It has already implemented demand-side strategies, they said.

“The problem is, they want to depend on drastic increases of these (renewable energy) resources,” Guillot said. “They want that rate to increase by 500 percent to take care of (the need for electricity), and that’s not going to happen any time soon.” 

Rice added that such increases would be costly and burdensome to many residents who live at or below the poverty line. Asked if the costs could decrease with time, Rice conceded that technology could improve.

“But the reality is we cannot afford to wait until those prices go down, because we have a need right now,” he said.

Representatives from the council's consultants — the international law firm Dentons US, Legends Consulting Ltd. of Denver and the local law firm Wilkerson and Associates, who have advised the council on legal and technical energy issues for decades — have said Entergy has not proven that its larger proposed plant is justified, but neither have environmental groups proven that the alternatives they propose are viable.

Customers “are presently at risk of significant electrical outages of potentially long duration, and such risk will persist until some form of reliable, fast-start generation is obtained locally,” the consultants wrote in a recent filing with the council.

The advisers take issue with how much Entergy proposes to charge ratepayers for the new plant, something community groups also have criticized. Entergy has said the average residential customer’s bill would rise by $7.19 a month if the smaller plant is built, and by $5.61 a month if the larger one is built.

The advisers say the monthly bill would rise by just under $7 a month if either plant was built and no other strategies were implemented, with the larger plant costing $6.79 and the smaller one costing $6.43.

If the Utility Committee votes on the issue Wednesday, the full council could take it up Thursday; the council rarely bucks its committee’s recommendations.

The committee will meet at 10 a.m. Wednesday in the Pan American Life Center, 601 Poydras St.

Follow Jessica Williams on Twitter, @jwilliamsNOLA​.