Feasibility of Montz project reconsidered

Published 12:00 am Wednesday, March 11, 2009

Louisiana Public Service Commissioner Lambert C. Boissiere plans to introduce a motion today at the Commission’s Business and Executive Session that would direct Entergy to review the feasibility of the Little Gypsy repowering project in Montz.

Boissiere wants Entergy to review the project’s viability based upon a number of factors including the recent decline in natural gas prices.

“Little Gypsy may not have the same positive impact for Louisiana ratepayers today as it did when presented to the LPSC in November 2007,” Boissiere said.

The motion will direct Entergy to review the repowering project based upon the most current data available. The motion will also direct Entergy to make a filing with the Commission and present their position based upon current information.

“I want Entergy to temporarily suspend the Little Gypsy repowering project and carefully review the feasibility of this project,” Boissiere said. “I want to know whether Entergy intends to move forward with this project based on the most current facts and projections.”

Environmental concerns, the unknown costs of carbon legislation and changes in the capital/financial markets are also factors in Boissiere’s desire to review the project’s viability. The little Gypsy conversion project, approved unanimously by the LPSC in November 2007, was intended to repower an existing natural gas generating unit by burning petroleum coke and coals. Initially, the project was estimated to cost approximately $1 billion, however, costs have escalated to approximately $1.76 billion. Entergy Louisiana is primarily reliant on natural gas to produce electricity. Currently, daily natural gas prices on the NYMEX HenryHub are approximately $4.25/MMBtu, which is a sharp dedine from the approximately $13.00/MMBtu seen in the summer of 2008.