Power plant in New Orleans gets the green light over concerns about transmission reliability

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Entergy’s bid to build a new power plant in eastern New Orleans cleared a major hurdle Wednesday afternoon when a city council committee voted 4-1 in favor of the smaller of two plants offered by the company.

The decision ultimately came down to councilmembers’ conclusion that the plant will guard against a specific transmission reliability risk that leaves the city open to “cascading blackouts and outages,” as Entergy New Orleans put it.

“In the past two years, I don’t believe there has been any real consideration of alternatives to meet the reliability need,” Councilwoman Stacy Head said.

“However, right now we have a reliability problem that must be addressed,” she said. “And our experts tell us that our only current solution is the 128 megawatt power plant.”

She voted for the plant. Also voting yes were councilmembers James Gray II (who represents the district where the plant would be built), Jared Brossett and Jason Williams. Councilwoman Susan Guidry cast the only no vote.

“They drag their feet or literally don’t do what we require until it gets to a point where we have no choice but to give in,” she said. “This is what we have here.”

The committee followed the advice of the city’s utility consultants and rejected a 226 megawatt, $232 million power plant that Entergy preferred. The smaller unit will cost $210 million.

The natural gas-powered “peaking plant” would run for only 10 to 15 percent of the year when demand is highest, usually on the hottest days of the year.

Entergy New Orleans customers would pay the cost of building, operating and maintaining the plant — plus an 11 percent profit — on their monthly bills for 30 years.

“I already have a 30-year mortgage; I don’t want another one,” said a woman who described herself as a small business owner.

New Orleans has an abnormally high number of power outages for a city its size, according to Forest Bradley-Wright of the Alliance for Affordable Energy. During Wednesday’s meeting, 4,900 customers near the Jefferson Parish line lost power because of a downed distribution line.

Many people brought up those outages at the meeting as a reason they support the new plant. But the plant will not alleviate everyday outages, those caused by problems with the power lines that crisscross the city.

Instead, Entergy says having a power plant within the city would guard against a specific type of failure on its large transmission lines, one in which two equipment failures occur at the same time during a period of intense demand.

That’s never happened to the city before. Even the city’s consultants, who recommended building the smaller plant, said the probability of that failure is low.

“If we’ve learned anything at all from the disastrous failure of the Sewerage and Water Board last year, it’s that inaction is problematic,” Williams said.

Ideally, he said, he would have liked to see  all possible options, but “our charge today is to look at the evidence before us and make a decision on the merits.”

Opponents say there are other, cheaper options that would eliminate that risk rather than a new plant.

By Entergy’s own estimation, it could fix the problem with $57 million in transmission upgrades, a fraction of the cost of the plant.

But the city’s consultants cautioned against that option, saying those transmission upgrades could be more expensive than Entergy expects and they would take eight to 10 years to complete.

That solution was never truly an option for the city council committee because Entergy didn’t do the in-depth analysis needed for consideration.

Reliability wasn’t actually Entergy’s primary reason to build the plant when it first asked for permission in 2016. In that application, the company said it wouldn’t be able to handle peak demand without the plant.

But when the company recalculated its projections last year, expected future demand fell significantly.

The company withdrew its application and resubmitted it, offering a smaller plant as an option and emphasizing transmission reliability.

Making their closing statements in opposition to the plant today were the Alliance for Affordable Energy, 350 New Orleans, The Deep South Center for Environmental Justice, the Sierra Club, and two organizations representing the renewable energy industry.

“A reasonable person would conclude that they chose to not conduct the transmission solution analysis because they anticipated that the results would potentially undermine or defeat the narrow set of choices they have sought to put before the council,” said Logan Atkinson Burke, executive director of the Alliance for Affordable Energy.

She said the plant “serves their own corporate financial interest but squanders the limited dollars our city has to pay for electric grid modernization, [the Sewerage and Water Board], street repair and the resilience investments we sorely need in our city.”

Guidry agreed. “We’re looking at a very limited pot of money that we’re pulling out of ratepayers’ pockets,” she said. “To add a polluting plant instead of charging forward with all speed to renewables, energy efficiency, and demand-side management — I just can’t go there.”

By the time the hearing started, the auditorium on the 11th floor of the Pan American Life Center had reached capacity. A few dozen people, many of whom were opponents wearing “No gas plant” shirts, were locked out.

People in the room could hear them knocking on the doors and chanting “People in! Suits out!” Some were allowed in after about 40 minutes. The meeting ended up lasting about seven hours.

The matter will go the full city council on March 8 for final approval.

This story was updated after publication. (Feb. 21, 2018)

Correction: This story originally misidentified the Sewerage and Water Board of New Orleans. (Feb. 21, 2018)

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