Entergy continuing to invest in transmission, CEO says

Entergy Chairman and CEO Leo Denault said on April 26 that the company continues to make progress in providing benefits to customers through transmission investments, noting that Entergy officially kicked off Entergy Louisiana’s Lake Charles Transmission Project with a wire-cutting ceremony in March.

He also said during the company’s 1Q16 earnings call that once completed, that $159 million project will support continued reliability and service to a rapidly growing area in the company’s service territory.

As noted on the company’s website, the project, located in the Lake Charles area of southwest Louisiana, involves the construction of the new Rhodes 500-kV switching station, east of the Nelson power plant; construction of about seven miles of new 500-kV line from the Rhodes switching station, south to a new Patton 500-kV bulk substation; installation of a new 500-230-kV, 1,200 MVA autotransformer at the bulk substation; and construction of about four miles of new 230-kV transmission line from the Patton substation to the existing Carlyss 230-kV substation.

The project, which is expected to be placed in service by the summer of 2018, also includes the construction of about 12 miles of new 230-kV transmission line from the Carlyss substation to the Solac substation, the company said.

Denault said that on the regulatory front, Entergy also made progress towards better aligning the timing of its investments with the needs of its customers, which will improve access to the capital needed to make the investments required to enhance the reliability and capability of Entergy’s system, as well as provide lower-cost and more environmentally friendly generation sources for the benefit of customers.

“This ultimately supports economic development in our service territory, which strengthens communities, creates jobs and brings more financial stability to the regions we support,” he said.

He also noted that in 1Q16, Entergy filed or concluded several major proceedings. For instance, the company received a final order on its Arkansas rate case and rate adjustments became effective in February, he said, adding that the company will make its first formula rate plan filing in July under the new framework using a future test year, which will bring more predictability and strength to Entergy Arkansas’ financial profile.

He said that Entergy Mississippi has also begun to use its new formula rate plan with forward-looking features, and made its first filing in March. A final order on that rate filing is expected before the end of 2Q16, with the resulting rate adjustments to become effective around mid-year.

In February, he said, an administrative law judge issued a proposal for decision with the Public Utility Commission of Texas on the company’s transmission cost recovery filing, and based on the proposal for decision, the company estimates “$10 million to $11 million annual recovery on transmission spend, incremental to base rates. Use of this rider, along with the distribution cost rider we’ve been using “, will bring us greater financial flexibility to support the needs of our customers in Texas.”

Looking forward, Denault said that the company continues to explore solutions that will meet its customers’ changing expectations in the evolving landscape of the utility industry.

“By introducing new technologies and renewable energy resources, we can build a grid that is cleaner, more resilient and affordable, and provides innovative opportunities in the way we interact and generate power for the benefit of all of our customers,” he said, adding that the company has three solar pilot programs underway in Mississippi, New Orleans and Arkansas.

Entergy Mississippi has completed three solar installations in three different locations, each capable of generating 500 kW, he said, adding that Entergy New Orleans has begun construction of the 1 MW solar generation project with state-of-the-art battery storage technology. Also, Entergy Arkansas has entered into a power purchase agreement to facilitate construction of an 81 MW solar generating facility that could be online by 2018, he said.

“These are the first steps towards assessing feasibility of utility-scale solar generation, a resource that provides one way to help meet our voluntary commitment to stabilize our carbon dioxide emissions and reduce our environmental footprint,” he said.

Entergy has also initiated three new requests for proposals (RFPs) for renewable generation sources to help meet long-term resource planning objectives in its service territory, he said. Those RFPs seek up to 200 MW of capacity for Louisiana, 100 MW for Arkansas and 20 MW for New Orleans, he said.

Furthermore, the company has created a commercial development and innovation team dedicated to evaluating and integrating other new technologies in its operating model. That team, he added, focuses on addressing customer needs and expectations through product and service innovation, technology deployment and alternative service models. Entergy will also research and develop the enabling technologies that enhance the distribution grid and provide higher service and reliability for all of its customers, Denault said.

Among other things, he said that Entergy is moving forward with the process to install advanced meters in its distribution system and will provide more information at its analyst day in June.

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Corina Rivera-Linares, chief analyst for TransmissionHub, has covered the U.S. power industry for the past 10 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics and education for weekly newspapers and national magazines. She can be reached at corinar@pennwell.com .

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