Entergy customers in New Orleans and Algiers will notice a new line item on their power bills as Entergy begins charging ratepayers for the operation of a new 560-megawatt natural gas unit at its Ninemile Point plant in Westwego.
The charge will show up beginning this month on the West Bank and next month on the East Bank, company officials told the City Council’s Utility, Cable, Telecommunications and Technology Committee on Thursday.
The new plant, Entergy officials said, modernizes the company’s aging equipment and will make power less expensive to produce, ultimately reducing costs to Entergy customers.
Ninemile is owned by Entergy Louisiana. Entergy New Orleans and Entergy Gulf States Louisiana have agreed to purchase 20 percent and 25 percent, respectively, of the new unit’s output.
On an individual basis, Entergy New Orleans electricity customers using 1,000 kilowatt hours of power a month would pay an additional $4.06 per month. Entergy Louisiana customers in Algiers would pay an additional $2.18. The figures are based on an estimated first-year operating cost to the companies of $21.3 million in New Orleans and $915,300 in Algiers.
The charge will appear as a “Ninemile 6 Rider” in New Orleans and as a “Ninemile 6 Nonfuel Cost Recovery” in Algiers, Entergy officials said.
Despite the new charge, Entergy said, customers should expect an overall reduction in their bills this year, compared with 2014, because of a reduction in fuel costs. A New Orleans customer using 1,000 kilowatt hours of power a month would see his bill drop by $6.14 to $97.39. Meanwhile, bills in Algiers would drop by $1.44 to $88.24.
Entergy officials said fuel costs will be lower, in part, because of cost savings associated with the Ninemile plant.
The company, however, did not provide the council with an analysis of just how much of the cost reduction would be attributable to the new plant and how much would be the result of lower natural gas prices or other factors. At the council’s request, the company said it would provide that information within a few weeks.
Construction began three years ago on the Westwego power plant near the foot of the Huey P. Long Bridge. It began operating on Christmas Eve. The plant was originally budgeted at $721 million but is expected to end up costing $655 million.