The consultants who advise the New Orleans City Council on regulating Entergy New Orleans on Friday urged the council to approve a controversial proposal by the utility to build a $210 million power plant in New Orleans East, rejecting criticisms of the plan as misguided and untenable.
Representatives from the international law firm Dentons US, the Legend Consulting Group of Denver and the local law firm Wilkerson and Associates swung their support behind the plan for a $210 million, 128-megawatt plant — smaller than Entergy first proposed — during opening arguments in a week-long evidentiary hearing on the proposal.
The advisers rejected the utility's first proposal, for a $232 million, 226-megawatt gas-fired combustion turbine plant, along with arguments on the other side that Entergy could forgo building a plant entirely by using a combination of solar power and so-called “demand-side management” strategies to meet the city's long-term electricity needs.
“By definition, transmission (from other areas) does not produce electricity, nor does demand-side management,” said Clint Vince of Dentons, who has been the council's chief utility adviser for more than three decades.
“This community needs reliable, all-weather local generation for storm contingencies, and also to back up renewable energy at times when the sun is not shining and the wind is not blowing,” he said.
The hearing is one of several steps in a process that will conclude with a final council decision on Entergy’s proposal to build a new power plant at the site of its now-closed, 1960s-era power plant on Old Gentilly Road in the Michoud neighborhood. That vote is expected by February at the earliest.
The council normally goes along with its consultants' recommendations, but in this case opposition to building a new plant is strong.
While Friday was not the first time that the council’s advisers had stressed the need for a local electricity generation source in New Orleans, it was their strongest public dismissal thus far of arguments that Entergy should forget about a new plant and instead invest heavily in renewable power sources while doubling down on strategies to curb the demand for electricity.
Those arguments have long been pitched by groups such as the Sierra Club, the Alliance for Affordable Energy and the Deep South Center for Environmental Justice.
The “demand-side” approach those groups urge could require Entergy to curb electricity transmission during times of peak demand to big users who don’t need it, easing the demand on the system as a whole.
Batteries might also store the power that renewable energy provides on sunny or windy days, meaning it could be used later when weather conditions aren’t ideal.
Combining those strategies with purchases of power from outside sources is a cheaper and greener option than building a gas-fired power plant in the city, those groups say. They also argue that building a new plant in Michoud would have adverse health impacts on nearby residents.
“Technologies like solar, battery storage and demand response programs are not only replacing proposed fossil fuel plants, they are leading to the closing of fossil fuel plants across the world,” said Susan Stevens Miller, who represented the Alliance for Affordable Energy and LA350. “This is the path that the City Council should choose.”
The council agreed Thursday to hire a firm to explore the potential value of such “demand-side” strategies in New Orleans, though it was unclear if that work will be completed before the council makes a decision on the plant.
Entergy’s own analysis has found such methods, by themselves, would not meet the city's need for electric power.
A 2015 study Entergy commissioned found that demand-side approaches would create only minimal savings — suggesting that costs would outweigh the benefits. That study concluded that demand-side programs did not negate the need for a new plant.
Brian Guillot, Entergy’s counsel, on Friday emphasized the company’s commitment to solar and other renewable power sources. The company has committed to integrating up to 100 megawatts of renewable energy resources into its electricity grid, amounting to 10 percent of its generating capacity.
Though the utility has advocated for the larger, 226-megawatt option, Guillot pointed to the smaller plant’s “black-start” capability of providing power to a large portion of the city, even if Entergy’s entire grid goes dark.
He said the plant’s critics had done no sound analysis to back up their claims that batteries, solar power and demand-side strategies can meet the city's need for reliable power.
“They don’t know things like the amounts that would be needed of these resources, the costs, the time that these resources would be needed, or the likelihood of success,” Guillot said. “That is not a gamble that this company is willing to take on reliability in this city.”
Ultimately, Vince and the council's other consultants agreed, saying that the environmental advocates’ claims deriding the 128-megawatt plant option “do not withstand serious scrutiny.”
“To sum up, the council advisers urge the council to reject the 226-megawatt (combustion turbine) plant because it’s too big,” Vince said. “We urge approval of the much smaller 128-megawatt plant, because it is a more reasonable size. And we urge the council to reject the ‘all-our-eggs-in-one basket’ transmission strategy because it’s high-risk and potentially perilous to New Orleans citizens.”
Both Entergy and the environmental advocates are expected to call witnesses to bolster their arguments over the next week.