Entergy Louisiana’s $261 million plan to buy a 361-megawatt plant to be built in Washington Parish has been approved by state regulators.

Officials said the approval is an endorsement of another element of its plan to modernize its fleet of power plants. 

The agreement unanimously approved by the Louisiana Public Service Commission calls for Entergy Louisiana to buy a natural gas-fired peaking unit following its construction by a subsidiary of Calpine Corp. The total cost of the transaction, which is expected to close in the second quarter of 2021, is about $261 million.

Peaking units are reserve generating capacity that run to fill the gap when customer demand exceeds normal peak capacity.

Entergy Louisiana LLC provides electric service to more than 1 million customers and natural gas service to about 93,000 customers in the greater Baton Rouge area. With operations in southern, central and northeastern Louisiana, the company is a subsidiary of Entergy Corp.

The Washington Parish Energy Center will be constructed just west of Bogalusa on the site of a generation project Calpine put on permanent hold in 2006. Calpine will demolish the unneeded remnants of that project and build the natural gas-fired peaking unit. The unit will consist of two combustion turbines. 

“We view this project as a sound investment to meet our customers’ future power needs in Louisiana,” Phillip May, president and CEO of Entergy Louisiana, said.

The company currently depends upon older, less efficient gas-fired plants to help meet peak demand, but startup times make them less effective as peaking resources, Entergy said. Modern combustion turbines like the two planned at Washington Parish are specifically designed to start and ramp up quickly to meet the energy needs of customers, the company said.