$1.7 billion Entergy project hits another snag

Environmental lawsuit, report that says customer’s bills would be higher,

Entergy’s Little Gypsy facility in Montz.

Entergy’s plan to build a new electricity generator fueled by petroleum coke at its Little Gypsy facility in Montz hit another snag in February after a joint report by the Alliance for Affordable Energy and the Sierra Club said that plans to convert the plant would leave customers with higher bills.

In addition, the Tulane Environmental Law Clinic has filed suit against Entergy challenging the project.

“We cannot comment on any aspects of the Little Gypsy project due to litigation,” Entergy spokesman Doug Rhodes said. “We look forward to addressing these matters in the near future.”

The report from the Sierra Club and the Alliance for Affordable Energy, which was released to the Louisiana Public Service Commission, said that the bills would rise because of new carbon regulations expected from the Obama administration. The report was written by economist James Metzger, who argued that investing in energy efficiency and renewable energy would be preferable to converting the Little Gypsy plant. The groups called on the PSC to withdraw its approval of the plant’s conversion project, which was originally issued in November of 2007.

Entergy announced the plan to build a generating unit at the Little Gypsy power plant back on April 4 of 2007. The generating unit would run on petroleum coke and coal as opposed to natural gas, which has seen a sharp increase in price over the years, but dropped in price over the past two months. At the time, the project was to cost $1 billion and would create 500 construction jobs in the short term and 35 plant jobs in the long term. Entergy officials said that the completed project would save Louisiana customers $4 billion in monthly billings over the next 30 years.

Since then, the price tag of the project has jumped by $700 million.

A year after the project was announced, the Sierra Club notified Entergy of its intent to sue the company under the Clean Air Act for exceeding the maximum allowance for mercury, lead and arsenic emissions. On June 30, 2008, the Sierra Club filed a lawsuit in state court challenging the PSC’s approval of Entergy’s plan to refit the Little Gypsy plant.

Environmental groups are opposed to the project because they say it will generate more emissions than the burning of natural gas and because they believe the cost of carbon taxes will erase any financial benefit for consumers.

The EPA let a deadline pass on Feb. 6 for objecting to Entergy’s application for construction permits for the repowering of Little Gypsy. The EPA forwarded the application to the Louisiana Department of Environmental Quality.

The EPA should make a decision about the project soon.