The updated capital plan for 2016-2018 for Entergy Corp. reflects capital plan refinements and includes specific investments in gas-fired capacity, said Entergy in its Aug. 4 quarterly Form 10-Q report.
The financial report said these investments include: the purchase of the Union Power Station in Arkansas in March 2016; construction of the St. Charles Power Station and the New Orleans Power Station; the self-build option at Entergy Louisiana’s Nelson site selected in a request for proposal (RFP); and the self-build option at Entergy Texas’s Lewis Creek site selected in another RFP.
In August 2015, Entergy Louisiana filed with the Louisiana PSC an application for certification of the St. Charles Power Station, a nominal 980 MW combined-cycle unit, on land adjacent to the existing Little Gypsy plant in St. Charles Parish, Louisiana. It is currently estimated to cost $869 million to construct, including transmission interconnection and other related costs.
An evidentiary hearing was held in April 2016 and, in July 2016 an administrative law judge issued a final recommendation that the LPSC certify project construction as being in the public interest. Subject to timely regulatory approval by the LPSC and receipt of other permits and approvals, construction will commence, and commercial operation is estimated to occur in 2019.
Pending receipt of these approvals, Entergy Louisiana continues pre-construction design and procurement activities, primarily focused on procuring long lead time items to preserve the project schedule.
In June 2016, Entergy New Orleans filed an application with the city council seeking a public interest determination and authorization to construct the New Orleans Power Station, a 226 MW advanced combustion turbine in New Orleans, Louisiana, at the site of the existing Michoud generating facility, which facility was deactivated effective May 31, 2016. The current estimated cost of the New Orleans Power Station is $216 million. Entergy New Orleans is seeking a procedural schedule that will provide a council decision within a timeframe that would support a commercial operation date in late 2019.
The Form 10-Q does not describe the Nelson and Lewis Creek projects outside of mentioning them in general. Descriptions of these projects from the RFPs are:
“-Nelson would be a combined-cycle gas turbine facility that would be built at Entergy’s Nelson site in Westlake, Louisiana. It will not have dual-fuel capability and will be sized at no less than 650 MW (summer conditions, at full load, including duct-firing) and no more than 1,000 MW (summer conditions, at full load, including duct firing).
“-Lewis Creek is a CCGT facility that would be built at the Lewis Creek site in Willis, Texas. It will not have dual-fuel capability and will be sized at no less than 800 MW (summer conditions, at full load, including duct firing) and no more than 1,000 MW (summer conditions, at full load, including duct-firing).
In October 2015, the Louisiana PSC approved a settlement authorizing the purchase of Power Blocks 3 and 4 of the Union Power Station. In March 2016, Entergy Louisiana acquired Power Blocks 3 and 4 for an aggregate purchase price of about $474 million and implemented rates to collect the estimated first-year revenue requirement with the first billing cycle of March 2016.
As a term of the LPSC-approved settlement authorizing the purchase of Power Blocks 3 and 4 of the Union Power Station, Entergy Louisiana agreed to make a filing with the LPSC to review its decisions to deactivate Ninemile 3 and Willow Glen 2 and 4 and its decision to retire Little Gypsy 1.
In January 2016, Entergy Louisiana made its compliance filing with the LPSC. Entergy Louisiana, LPSC staff, and intervenors participated in a technical conference in March 2016 where Entergy Louisiana presented information on its deactivation/retirement decisions for these four units in addition to information on the current deactivation decisions for the ten-year planning horizon.
Parties have requested further proceedings on the prudence of Entergy Louisiana’s decision to deactivate Willow Glen 2 and 4. This matter is pending before a judge, and a hearing has been scheduled in March 2017 to determine, under applicable law, whether Willow Glen 2 and 4 units should be returned to service.
In November 2015, the New Orleans City Council authorized expansion of the terms of the purchased power and capacity acquisition cost recovery rider to recover the non-fuel purchased power expense from Ninemile 6, the revenue requirement associated with the purchase of Power Block 1 of the Union Power Station, and a credit to customers beginning June 2016 in recognition of the decrease in other operation and maintenance expenses that would result with the deactivation of Michoud Units 2 and 3. In March 2016, Entergy New Orleans purchased Power Block 1 of the Union Power Station for about $237 million and initiated recovery of these costs in customer bills.
In March 2016, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans purchased the Union Power Station, a 1,980 MW (summer rating) facility located near El Dorado, Arkansas, from Union Power Partners LP. The Union Power Station consists of four natural gas-fired, combined-cycle gas turbine power blocks, each rated at 495 MW (summer rating).
Entergy Louisiana purchased two of the power blocks and a 50 percent undivided ownership interest in certain assets related to the facility, and Entergy Arkansas and Entergy New Orleans each purchased one power block and a 25 percent undivided ownership interest in such related assets. The aggregate purchase price for the Union Power Station was around $949 million (about $237 million for each power block and associated assets).