The New Orleans City Council has joined two other utility regulators to file a complaint against utility company Entergy Corp. over its management of the Grand Gulf Nuclear Station in Mississippi. According to a press release from City Councilwoman Helena Moreno, the complainants allege that the nuclear power plant’s frequent outages have cost customers in Louisiana, Arkansas and Mississippi more than $1 billion. The complainants are seeking a refund.
The press release alleges that Entergy New Orleans customers alone paid $71.1 million in additional costs between 2016 and 2020 due to frequent maintenance issues and outages at Grand Gulf.
“Grand Gulf is the single largest energy resource for the city of New Orleans, and we need it to be operating safely, at full capacity, and at a reasonable cost,” Moreno said in the press release. “We are asking FERC to help us get that plant running efficiently again as well as seeking refunds to make it right by our people.”
The complaint was filed with the Federal Energy Regulatory Commission, or FERC, which regulates interstate electricity systems. The other two plaintiffs in the suit are the Louisiana and Arkansas Public Service Commissions, which are responsible for state-level utility regulation.
The issue stems from how Entergy has managed its Grand Gulf Nuclear Station in Port Gibson, Mississippi. The nuclear reactor at Grand Gulf is the biggest in the country, but as The Lens reported in 2019, it has also had persistent issues with reliability.
“We are investing in our Grand Gulf facility to position it for many years of safe, secure and reliable operations,” an Entergy spokesperson said in a statement. “In 2020, we invested in significant upgrades, replacing the plant’s turbine control system to extend the life and efficiency of the facility. In late 2020, the plant experienced operational issues related to that upgrade, including unplanned shutdowns and time spent off the grid. We’ve worked to identify the related issues, implemented a maintenance outage and conducted additional training for our team. The team operated Grand Gulf at 100 percent power throughout the recent unprecedented winter storms, providing much needed carbon-free electricity to customers.”
Nuclear power plants generally run for most of the year, providing a large, consistent “base load” of electricity for the region. Between 2016 and 2018, on average, nuclear power plants in the US produced roughly 92 percent of their maximum generating capacity. But over that same time period, Grand Gulf produced only 55.5 percent of its capacity.
Reliability at Grand Gulf improved in 2019, but then major issues returned last year. Those problems were part of the reason that New Orleans customers saw huge bill hikes in January, according to a presentation from the council’s utility advisers last month.
When Grand Gulf is down, Entergy New Orleans, along with the rest of Entergy’s subsidiaries, have to buy replacement power to compensate.
“When Grand Gulf experiences an outage and is not producing power, Entergy must acquire replacement energy to serve customers,” Wednesday’s press release said. “In this scenario, Entergy customers are paying both for the high fixed costs associated with the operation of Grand Gulf and the additional energy purchased to replace what Grand Gulf failed to provide.”
The electricity produced by Grand Gulf is split up between Entergy’s subsidiary companies, including Entergy New Orleans, Entergy Louisiana and Entergy Arkansas. Entergy New Orleans has had an agreement to purchase 17 percent of the plant’s electricity since it started operating in 1985.