Power Plant Subsidence

The site of the former Michoud power plant in New Orleans, La., pictured here on Aug. 1, 2016. Entergy New Orleans wants to build a new gas-fired power plant at the site.

Advocate staff photo by MATTHEW HINTON

In the face of opposition from some community groups, Entergy New Orleans this week offered a scaled-back alternative to its proposed new gas-fired power plant in New Orleans East, even while reaffirming its interest in building the larger facility.

Entergy has been seeking to build a $216 million, 226-megawatt natural gas-fired combustion turbine power plant at the site of the now-closed 1960s-era Michoud power plant on Old Gentilly Road.

Company officials have said the plant is needed to generate electricity during peak demand periods and when other facilities are damaged by storms.

But several factors led Entergy to "slow walk" the proposal, including opposition from nearby neighborhood leaders and mounting criticism that the utility would be better off investing in renewable power sources and should focus on reducing energy consumption through improved energy efficiency programs.

The company also recently issued new projections for how much power it expects to need over the next two decades, signaling that its demand would grow by about 3.4 percent less than previously expected during that time. What's more, the estimated cost of the 226-MW plant grew by $16 million, bringing the total price tag to about $232 million.

On Thursday, the company filed paperwork with the City Council reaffirming its desire to move forward with the original proposal, but it also offered another option: a 128-MW unit composed of gas-fired reciprocating engines that would cost about $210 million, according to Entergy's estimates.

The City Council regulates Entergy New Orleans and will have the final say. The company has requested a decision on how to move forward by October.

“Both the 128- and 226-megawatt options proposed have significant benefits for our customers that include providing a long-term resource capable of supporting reliable service and essential grid stability, and helping to support the introduction of renewables into our resource portfolio,” Entergy New Orleans President and CEO Charles Rice said in a statement.

One megawatt is enough electricity to power 1,000 homes.

Officials at Entergy New Orleans, which provides electricity to more than 198,000 customers in Orleans Parish, spent much of the last year defending the larger plant. They said the city would benefit from having electric generating capacity that can be started and ramped up quickly during peak demand periods or after a storm knocks other power sources off-line.

However, Entergy's push to build a new plant comes as environmentalists and others have increased pressure on U.S. power providers to invest in renewable resources.

Last year, Entergy flipped the switch on more than 4,200 solar panels in a once-empty plot of land near Chef Menteur Highway. Billed as the city's first large-scale effort to produce solar power, the pilot project can generate enough electricity to power about 160 homes.

The utility is working to add up to 100 megawatts of renewable energy resources, which could help fill the capacity gap if it moves forward with the smaller plant.

But in its filing Thursday, Entergy made clear that it still considers the larger plant to be its best bet in the long term. Despite the reduced demand projections, Entergy "has an overall capacity that needs to grow to approximately 248 megawatts and a peaking need of 342 megawatts on average throughout the 20-year planning horizon," the company said.

Depending on City Council approval, Entergy said, it could have the larger plant up-and-running by late 2020. It said the smaller plant could be ready a year earlier.

In a recent interview, Entergy Corp. CEO Leo Denault said he wasn't surprised by the community's pushback against the idea of building a new plant, but he said the decision is not simply a choice between building a new plant or installing rooftop solar panels and connecting them to the distribution grid.

Either new plant would emit less pollution and use far less groundwater than did its predecessor, Denault noted, and the city would benefit from having back-up generating capacity.

"We're at the end of the (transmission) line," he said. "There's no electricity coming from the Gulf of Mexico."

In testimony included with the filing, Rice described the smaller proposed plant as "a great choice to back up renewable generation" sources. Additionally, the smaller plant's design would allow it to be fired up even in the event of a loss of power on the grid.

"This could be a tremendous benefit if New Orleans is electrically 'islanded' from the rest of the interconnected transmission grid, as it was after Hurricane Gustav," in 2008, he said.

Lawyer Clint Vince, for decades the City Council's chief adviser on regulating Entergy New Orleans, said he'd have to take a hard look at the latest proposal before reaching a conclusion to present to the council. But he said he was encouraged that Entergy put forward an alternative option in which some of the city's concerns "have been addressed and not simply paid lip service to."

"One of our concerns has always been the need for fast-start generation within New Orleans," Vince said, ticking off a list of reasons: "One, to help with peaking; two, to help with reliability; three, to help to strengthen the transmission system and the support within Orleans Parish."

Vince described Entergy's hope for an October decision by the council as "probably unrealistic."

Not everyone saw Entergy's newest proposal as positive.

As Mayor Mitch Landrieu unveiled a plan Friday to cut New Orleans’ greenhouse gas emissions by half over the next dozen years, the head of one local environmental watchdog group said building either plant would be a step in the wrong direction.

Logan Burke, the executive director of the Alliance for Affordable Energy, said she would rather Entergy used the money to invest in energy-efficiency programs that could reduce the need for new generating capacity.

"We don't like that Entergy is asking us to take their word for this being the best option," she said.

Follow Richard Thompson on Twitter, @rthompsonMSY.