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22.2.19

Luddites lose finally on N.O. gas peaker

The New Orleans City Council turned back the Luddites and ensured reliable electric power in the Crescent City.

After nearly a year of going round and round with drama, the Council passed on revisiting a vote to authorize Entergy New Orleans to build a 128 MW gas generator. The city has relied solely on outside power by transmission line for almost three years, and last year the Council approved of this unit and Entergy charging customers for it, but upon discovering the utility had employed unusual lobbying tactics to help win approval, some special interests agitated to redo the process.

The $210 million “peaker” unit Entergy intended for two purposes. First, on days where demand exceeded what outside transmission could bring in, this unit has a quick start capacity that can ameliorate almost instantly capacity issues. Second, in the event of a natural disaster with downed lines and other problems, the unit’s quick starting in short order could supply emergency power for an extended period of time.


Special interests initially focused on renewable power, which, although falling in price comparatively faster than petroleum-based options even as natural gas remains the cleanest and most affordable of the bunch, still can’t compete with (particularly the kind of generation Entergy proposed) gas, especially given New Orleans’ climatic conditions, and don’t have the same reliability or quick start capabilities. So, they switched their strategy and wanted as an alternative battery storage; in essence, the utility could collect power in batteries on days where the grid has excess capacity and then have it available at other times when demand exceeded external sources or in case of emergency.

They even had a consulting firm biased in favor of renewable energy prepare a report alleging that project would have roughly equivalent costs over the long terms as the gas peaker. Of course, some debatable assumptions made in the report, such as the future price of gas, the future cost of capital, and minimal battery degradation (which actually occurs at one to two percent per year, meaning in a decade an array would have lost 25 MW of capacity), boosted the case for batteries instead of the peaker in perhaps unrealistic ways.

But even if that scheme would work, one simple fact disqualifies the battery option: these deplete in four hours. That possibly might get the city by on days of peak demand, although a run of too many hot days might overwhelm it, but it just won’t work in case of disaster. After a major storm, power in urban areas typically takes at least two weeks for restoration to at least three-quarters of households. And all those recent historical instances – and, yes, New Orleans with Hurricanes Katrina and Rita took the longest – had power generation occurring in the area, not solely transmitted by long lines into it as is the case now in New Orleans.

So, the battery plan was no real solution at all. Still, the Luddites took it hard when the Council didn’t reconsider the vote, although it took a pound of flesh from Entergy in the form of a $5 million “fine” (Entergy prefers to term it a “gift”) for its lobbying practices (which don’t break any laws or regulations) that members said would be used on behalf of New Orleans East, where the facility will be.

In the final analysis, the Council wisely rebuffed selfish special interests who, to satisfy their own psychological peculiarities driving their need to impose their ideology on society, would have burdened ratepayers, but especially the poor, financially and made everybody suffer reduced reliability in accepting these ideologues’ pie-in-the-sky demands. Even when a slew of liberal policy-makers are the deciders, it’s funny how leftist pipe dreams often lose out to reality.

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