With the flip of a ceremonial switch — a gesture that was repeated a few times for good measure — Entergy officials on Monday unveiled the company’s newest power generator: a $665 million natural-gas-burning facility in Westwego that uses about a third less fuel than older models and is expected to save customers in Louisiana tens of millions of dollars a year on their electricity bills.
Situated in the shadow of the Huey P. Long Bridge, the Ninemile Point plant is owned by Entergy Louisiana. Two sister companies, Entergy New Orleans and Entergy Gulf States Louisiana, will purchase 20 percent and 25 percent, respectively, of the plant’s output.
Some Entergy customers in the area may already be familiar with the 560-megawatt plant, at least in name: Starting this month, New Orleans and Algiers residents will see a new charge on their power bills as the utility begins charging ratepayers for operating it.
On an individual basis, a typical Entergy New Orleans customer using 1,000 kilowatt hours of power a month will pay an additional $4.06 per month; Entergy Louisiana customers in Algiers will pay an extra $2.18.
Despite this, Entergy has said that customers can expect an overall reduction in their 2015 bills because of lower fuel costs. Overall, a New Orleans customer using that same 1,000 kilowatt hours of power a month will see an average bill fall by $6.14. In Algiers, it’s expected to drop by $1.44.
One megawatt is enough electricity to power 1,000 homes.
The new unit, which began operating last month, is touted for its efficiency. It uses two sources of energy — combustion and steam turbines — to convert fuel to electricity.
It works like this: Air is pulled through an evaporative cooling system into two gas combustion turbines before being compressed and ignited, turning generators to create electricity. Exhaust heat from the gas turbines is captured and used to create steam that drives a traditional steam turbine generator, which produces additional electricity, increasing the unit’s efficiency and output.
The remaining exhaust is directed through pollution control systems and out the unit’s 195-foot-tall stacks.
Even as it ran at full capacity Monday, little could be seen escaping from the plant’s towering exhaust system.
According to Entergy, construction on the new unit was completed ahead of schedule and about $66 million under budget.
It’s projected to reduce fuel costs for Entergy customers across Louisiana by $50 million in 2015 and $69 million in 2016.
As Louisiana prepares for its largest period of industrial growth — driven by more than $80 billion in announced projects, largely in southwest Louisiana — officials who spoke at Monday’s ceremony frequently noted that more power sources will be necessary in the coming years as the new projects come online.
“They come with a fairly hefty power appetite, and so this will provide a significant portion of that, but it’s far from adequate,” Phillip May, president and CEO of Entergy Louisiana and Entergy Gulf States Louisiana, said in an interview. “This is really more of a first step in a multistep plan to address those needs.”
Down the line, May said, Entergy may build another power unit at its Little Gypsy plant in St. Charles Parish as well as another unit in the Lake Charles area, where much of the new industrial growth is centered.
Entergy Gulf States Louisiana has already announced plans to build a $187 million power transmission facility in the Lake Charles area. That project includes two new substations, expanding a third substation and adding about 25 miles of high-voltage transmission lines. It’s one of the largest transmission projects in Entergy’s history.
In the meantime, May said, Ninemile’s new unit is a step in the right direction.
“This plant is highly efficient. It’ll help keep rates low for decades to come,” he said.
Follow Richard Thompson on Twitter, @rthompsonMSY.