Entergy strengthens grid

NEW ORLEANS, LOUISIANA - Entergy Louisiana LLC and Entergy Gulf States Louisiana LLC have invested more than $100 million in three transmission system upgrades that the state's largest utility says will give it more options to buy inexpensive power this summer and will make electrical service in the New Orleans area more resilient during storm season.

A robust transmission system gives a utility alternative pathways to transmit power if lines go down during a storm, and creates more capacity to buy electricity if other generators can produce power more cheaply than the utility.

Renae Conley, president and chief executive of the two Entergy utilities, which serve customers from the New Orleans suburbs to the Texas border, said her company is supportive of transmission investments and has been working on these projects for a while.

"It takes a lot of work and evaluation to make sure we select the best alternatives for our customers," she said.

Entergy has come under fire in recent months over the state of its transmission grid. After Hurricane Gustav, Gov. Bobby Jindal and others complained that customers sat in the dark for too long, and questioned whether the issue was the wind or the adequacy of Entergy's grid.

More recently, small municipal utilities, independent power producers and big industrial plants that use a lot of electricity have been so vociferous in their complaint that Entergy's system for managing transmission doesn't facilitate enough investment in the grid that the Federal Energy Regulatory Commission has scheduled a meeting later this month in Charleston, S.C., for everyone to air their grievances.

Entergy says that Gustav was a particularly bad storm because so many areas of the state endured high winds, and the path of the storm went right up the spine of the state's transmission system, crumpling its towers. The company says that expanding transmission into the New Orleans area can be challenging, because lakes Pontchartrain and Maurepas limit the routes for reaching the state's most populous region, and the soggy terrain of south Louisiana makes it tough to build concrete transmission towers, which are stronger than metal but sink in the swamps.

The two main upgrades in the Amite South region, utility-speak for the area from the Louisiana-Mississippi border to the Gulf of Mexico, will help transport more power to New Orleans. The $62.4 million upgrades, which have been in the works since 2004 but were interrupted by Katrina, increase the import capacity of transmission system into the New Orleans area by 350 megawatts, or enough electricity to power about 52,000 homes in the summer. The total transmission capacity into the area now stands at 2,800 megawatts.

Louisiana Public Service Commission Chairman Lambert Boissiere, who was on hand for Thursday's announcement at a Kenner transmission building, lauded Entergy for making investments that could shorten the time for restoring power after twin storms like Katrina and Rita in 2005, and Gustav and Ike in 2008.

"In both of those storm events, we saw significant outages and long periods of restoration," said Boissiere, who represents New Orleans. "Perhaps not as many people would have been out if we had an improved transmission system."

Public Service Commissioner Eric Skrmetta, who lives in Metairie and maintains offices in Metairie and Mandeville, said that citizens will benefit from Entergy's investments because if the utility is able to buy power more cheaply than it can produce it from companies that have newer, more efficient plants, it will lower the fuel adjustment charges on people's bills. "The good news is, we can search out the best price and the best source of power," Skrmetta said.

The third upgrade, in Plaquemines Parish, replaces a transmission line that was destroyed in Katrina, moves it to a place where it will be easily accessible for repairs, and increases its capacity.

Public officials said the $39.7 million investment should be an important sign of confidence to Plaquemines Parish home and business owners, and should help serve the local energy industry, which increased its capacity when it rebuilt.

"This isn't an announcement about repairing something. It's an announcement about modernizing something, upgrading something," said Jefferson Parish President Aaron Broussard. "It brings great hope to the entire region."

In keeping with modern standards, the Plaquemines Parish project was built to withstand 150 mph winds, and the Amite South projects were built to 140 mph strength.

The Louisiana Energy Users Group, an association of 17 large industrial electricity customers, has been a strong proponent of a stronger transmission system in Louisiana, because it believes that a robust grid is an effective hedge against the rising cost of building new power plants, uncertain environmental regulations and volatile fuel prices.

"This is definitely a step in the right direction," said Brenda Harris, chairwoman of LEUG and director of power at Occidental Energy Ventures Corp. in Houston, which has several plants in the New Orleans area.



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