Entergy Texas eyes shorter-term options to satisfy demand after ending bid

Despite recently pulling out of an agreement to purchase part of an Arkansas power-station unit due to opposition from various stakeholders, Entergy Texas is still committed to meeting the growing electricity demands of the region.

The Beaumont-based electric power generation and distribution company is one of three Entergy Corp. subsidiaries who entered into a plan in December 2014 to acquire the four highly efficient combined-cycle natural gas-fired generating units, each rated at 495 megawatts, within the Union Power Station near El Dorado, Arkansas.

Both Entergy Texas and Entergy Arkansas were each set to buy one of the units, while Entergy Gulf States Louisiana, LLC, agreed to purchase two units. The UPS station would be sold for a total price of $948 million, or $237 million per unit, with the purchase expected to be completed by the end of 2015.

"Purchasing the unit was part of Entergy Texas’ overall focus on providing clean, reliable, low-cost service to its customers while supporting economic growth in the communities it serves," Entergy Texas Communications Manager Melanie Taylor told PowerNewsWire. "The purchase price of the unit was half what it would have cost to build a (combined-cycle gas turbine) of the same size. Entergy Texas saw the acquisition as an economical way to help modernize its generation fleet and meet increased demand."

As a requirement to finalize the purchase, Entergy Texas had to file a request for a Certificate of Convenience and Necessity from the Public Utility Commission of Texas (PUCT) and have it approved. Hearings were held in June, and additional testimony was filed in June and July.

"Through these hearings and testimony, the participating stakeholders indicated their opposition to the purchase of the unit," Taylor said. "Those stakeholders included representatives of some of the major customer groups, and Entergy Texas did not see a viable path forward for the acquisition. On July 17, Entergy Texas filed a joint motion, supported or not opposed by all stakeholders, to dismiss the CCN filing."

Based on the testimony filed, Taylor said Entergy Texas believes the participating stakeholders would prefer a strategy that focuses on additional generating resources sited in Texas and that in the meantime, the company should be taking advantage of other, shorter-term resource opportunities.

"While Entergy Texas is disappointed that the parties did not agree with its view of the value of the purchase, it remains committed to working with the PUCT and stakeholders as it develops strategies to meet its long-term resource needs in Texas," Taylor said. "Acquisition of the Union Power Station unit was part of a long-term resource plan for increasing power supply in Texas. Assuming the commission grants the motion to dismiss, Entergy Texas will utilize shorter-term alternatives to meet customers’ immediate needs, including the MISO energy and short-term capacity markets."

In June, Entergy Texas issued a Request for Proposal for additional long-term CCGT capacity from new or existing resources and shorter-term purchased capacity from existing resources in MISO South. The RFP includes a self-build proposal at the Entergy Texas Lewis Creek site.

Entergy Texas is expected to receive a decision on its motion to dismiss its bid on July 30.

Entergy New Orleans is set to acquire the Union Power Station unit that was originally going to be purchased by Entergy Texas.

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