By Edward Klump, E&E News reporter
Despite withering criticism and lingering questions, Entergy New Orleans is in position to secure city support for a natural-gas-fueled generation project as soon as next month.
That reality is coming into focus after a committee of the New Orleans City Council voted 4 to 1 this week to send the proposal to the full council, which has seven voting members. The committee backed a resolution that says a version of the plan is in the public interest. It also gives Entergy a full chance to recover "prudently" incurred costs from the project.
The $210 million proposal, sometimes known as the RICE plant, calls for a 128-megawatt project with reciprocating internal combustion engines. It's the smaller of two ideas pitched by Entergy, which also suggested a 226-MW plan featuring a combustion turbine. Neither approach is acceptable to critics in part because of the reliance each has on natural gas. The matter is expected to be considered during a March 8 meeting of the City Council.
As the committee prepared for a vote Wednesday, Councilmember Stacy Head said she agreed with much of the criticism leveled against Entergy and the City Council. She said more probably could have been done to look at alternatives but that Entergy's system needs to meet a certain standard. The committee decided to heed the advice of council advisers in advancing the smaller option.
"Right now, we have a reliability problem that must be addressed," Head said during the meeting, adding, "And our experts tell us that the only current solution is the 128-megawatt RICE plant."
The controversy is another example of the debates happening around the country over everything from fossil fuels and renewables to batteries and energy efficiency. A prominent opponent of Entergy's plan was unmoved by Wednesday's vote, vowing that council members will hear from constituents in the coming weeks.
"The people of New Orleans are finally waking up to the fact that Entergy has used a system to always get what they want, whether it is in the public interest or not," Logan Atkinson Burke, executive director of the New Orleans-based Alliance for Affordable Energy, said yesterday in an interview. "And I am certain that in the next two weeks, what we will see is residents of this city asking their council to wake up to the same fact."
The process dates to June 2016, when Entergy filed an application with New Orleans seeking approval for a new power plant. It took two units offline at the Michoud plant site in an area known as New Orleans East that same year, removing about 781 MW of capacity that also relied on natural gas.
The idea of putting new generation at the same site hasn't progressed smoothly despite being pitched in the hometown of Entergy Corp., the parent of Entergy New Orleans. The company put an initial application on hold last year before eventually presenting two options to the city. Entergy showed an openness to both projects, even if it preferred the bigger one.
The company's stance is that local generation is needed, and the company has indicated a desire for new peaking generation. Entergy has no large, operational power station in New Orleans, and it relies on transmission lines to bring electricity into the city. The company has said the 128-MW option could be available in January 2020.
Entergy New Orleans declined to comment to E&E News yesterday when asked about the committee's vote.
Seeking 'the right solution'
A number of factors continue to float around the process, including that only two of the City Council's seven current members will remain once winners of last year's elections take office in early May. One of the departing members, LaToya Cantrell, is set to become mayor.
Entergy New Orleans also has talked in the past of interest in seeing up to 100 MW of renewables in its generation mix, though much of that may not be located in New Orleans because of space limitations.
Burke of the Alliance for Affordable Energy previously suggested requiring Entergy to have a competitive solicitation to get a sense of least-cost options to fill needs. She said demand response and batteries could be faster and more cost-effective than a peaking plant. A transmission solution also could play a role, in her view.
In a news release after Wednesday's committee vote, Councilmember Jason Williams said the goal was "to make sure that we were matching the right solution to the existing problem in the best interests of our residents and businesses."
Williams is chairman of the committee that voted on the matter this week. His office said he will continue to meet with community members and stakeholders until there's a final vote to examine whether any viable alternatives would be suitable.
The meeting Wednesday was used to discuss some of the points covered in the docket. Even that wasn't without controversy, though, because a number of supporters of the project made it into the meeting room while some opponents didn't in light of space concerns.
Councilmember Jared Brossett alluded to his own questions about the reliability of Entergy New Orleans' distribution system in a statement this week, saying that situation is being addressed in other dockets. The generation decision, he said, was about the potential for "cascading blackouts triggered by reliability issues with the transmission system." He said the record supports the need for the RICE project.
Advisers to the council have suggested a typical residential bill could see an increase of about $6.43 a month under the RICE plan, depending on what factors are involved. Uncertainty remains, and the possible effect on bills could be larger.
Burke said she doesn't want the 128-MW plan to get the City Council's support for future cost recovery. But if the project does move ahead, she said potential conditions could include limits on the impact on customers' bills and making Entergy liable if the plant site floods. The proposed location for the project saw flooding in the past, though Entergy has said the area has seen improvements to make it less vulnerable.
"The only way to approve this plant in the public interest is to do so under conditions that protect people who will pay for it," Burke said. "And that is protect their health, protect their pocketbook, protect their city."
Councilmember Susan Guidry, the lone opposing vote on the committee, questioned during the Wednesday meeting why New Orleans would look "to add a polluting plant instead of just charging forward with all speed on renewables and demand-side management."
Besides examining gas options, Guidry said the burden should be on Entergy to show "everything that could be done with clean energy to solve our problems" as well as with upgrading transmission and distribution lines. She backed the idea of looking at conditions if the project is supported by the council.
In a statement, Councilmember James Gray called the issue complicated.
"We spent a lot of time and energy hoping we got it right, and I think we did," he said.
Twitter: @edward_klump Email: firstname.lastname@example.org
Original article: EE News