Air Pollution Control Equipment Services, Nuclear

Entergy Blends A Dedication To Energy With A Dedication To Customers

Issue 7 and Volume 117.

Entergy's Hot Spring power plant is one of its natural-gas fired power generation plants.
Entergy’s Hot Spring power plant is one of its natural-gas fired power generation plants.

By Justin Martino, associate editor

Entergy may have started with burning sawdust to generate power, but since then the company has grown to build a diverse foundation of power-generating projects.

Entergy began in 1913 when Harvey Couch, president of Arkansas Power Co., made a handshake agreement with H.H. Foster, president of the Arkansas Land and Lumber Company, to generate power from sawdust from Foster’s lumber company. Arkansas Power Co., which provided power for two Arkansas towns, started with two 550 kW generators and 22 miles of transmission lines.

One hundred years later, the company has 30,000 MW of generating capacity, revenues of more than $10 billion and is one of the leading nuclear generators in the U.S.

Building a diverse power generation portfolio

Entergy, which is based out of New Orleans, provides power for around 2.8 million customers in four states and operates more than 40 power plants in the U.S. The company’s power generators run off of a variety of fuel and include coal-fired, natural gas-fired, hydroelectric and nuclear generators.

Having that level of fuel diversity helps Entergy keep its prices as low as possible for its utility customers, said Jeff Richardson, Entergy’s Director of Major Projects – Nuclear.

“When you have spikes in natural gas prices or coal or oil or uranium prices, we have enough fuel diversity to shield our customers from those kinds of volatile actions in the commodities markets,” Richardson said.

In addition, having a diverse fuel mix allows Entergy to help control its emissions. Entergy’s nuclear reactors can help offset emissions from other power generating sources, such as coal-fired power plants.

Richardson noted that nuclear power is not only a cost-effective and less-volatile source of energy, but it also provides a near-zero emissions source of power generation.

“From that perspective, we think nuclear has very strategic advantages in the long term in a world that’s more and more concerned with the multi-pollutant requirements and concerns about climate change and CO2 and those kinds of things,” he said.

On the fossil fuel side of power generation for Entergy, Entergy Vice President – Fossil Generation Etienne Senac said the company is currently working more with natural gas than coal, although the company still has three coal-fired power plants with five total units. Senac said that while coal is still being used globally, uncertainty about regulations in the U.S. as well as costs have pushed the U.S. toward using more natural-gas fired power plants.

“We’re kind of all being funneled in the gas technologies at the present time because people just don’t see where the future of coal is going to be in the United States,” he said.

Ninemile Station

Entergy’s most current large project follows the trend of using natural gas rather than coal for power generation. The company is building a combined cycle gas turbine unit, Ninemile 6, located at its current Ninemile Point plant in Westwego, La. that will provide 550 MW of power capacity.

The Hot Spring plant is located in Arkansas, which is one of four states that Entergy serves.
The Hot Spring plant is located in Arkansas, which is one of four states that Entergy serves.

The unit, which will cost $721 million to construct, will be one of the most efficient gas-fired units in Entergy’s fleet as well as in the state, according to the company. It will replace Ninemile units 1 and 2, which first came online in the early 1950s and have been deactivated.

The company said the unit will have significantly lower emissions than the units that were deactivated and will be one of the cleanest gas-fired generating units in the U.S.

The unit will use GE 7FA.04 combustion turbine generators and a Toshiba TCDF 33.5″ steam turbine generator. The heat recovery steam generator is a model manufactured by Vogt.

Entergy is using subsidiaries of CB&I as engineering, procurement and construction contractors.

“We’re pretty happy that we’re back to building some generation,” Senac said.

Building Ninemile 6 is part of Entergy’s plan to continue to change its sources of power generation in order to continue to provide efficient, reliable and lower-cost electricity to its customers. Besides building the unit, the company is also planning to acquire combined cycle gas turbine units for sale when the purchase is economical and would meet reliability needs. The company also intends to enter into long-term agreements with suppliers of efficient, lower-cost power.

Entergy's current project, a new combined cycle natural gas-fired unit, will be located at its current Ninemile Point plant.
Entergy’s current project, a new combined cycle natural gas-fired unit, will be located at its current Ninemile Point plant.

Entergy has also recently completed several major projects for its nuclear power generation, including a steam generator replacement at its Waterford 3 unit in Killona, La., and a power uprate at its Grand Gulf Nuclear Station in Port Gibson, Miss.

Although no projects on the scale of the Grand Gulf uprate or Waterford’s steam generator replacement are planned at any of its stations currently, Richardson said Entergy spends millions of dollars each year at each of its nuclear sites for capital upgrades. Those upgrades may involve adding automation, upgrading computer and mechanical systems or adding facilities for employees at the stations.

Ninemile Unit 6 will cost around $721 mn to build and will provide 550 MW of energy.
Ninemile Unit 6 will cost around $721 mn to build and will provide 550 MW of energy.

Entergy works with multiple companies for its capital upgrades at nuclear sites, including Westinghouse Electric; GE Hitachi, a consortium between the two companies that focuses on nuclear operations; Areva; and Siemens.

Richardson also said the company continues to look for ways to expand Entergy’s business in areas where it makes sense to the company, including providing license renewal services to other utilities and contracting for operations at nuclear power plants owned by other companies.

Dealing with uncertainty in expansion

As Entergy continues with its long-term plans and goals, looking at regulation and potential changes in the market will be important to making decisions that will help the company continue its success, Senac said. Although natural gas may appear to be the best fuel to be using right now, changes in the market could raise prices and make another fuel more desirable.

“You always have to keep your options open and think about diversification, where it makes sense, because certainly, as we’ve seen historically, you’ve got potential for a lot of volatility in the price of fuels,” he said.

Senac noted that as more coal units are being shut down, and some companies consider closing down nuclear units, more power plants in the U.S. will likely switch to using natural gas for power generation, increasing the demand. In addition, the U.S. Environmental Protection Agency is researching potential environmental damage caused by hydraulic fracturing, a method used to obtain natural gas, which could lead to more regulations in the future.

“The whole natural gas industry could be impacted by that, and you could see a price rise in natural gas due to demand and environmental regulation,” he said.

Environmental regulation plays a large role in the future of the company’s coal-fired power generation as well. Federal regulations regarding emissions are forcing many U.S. coal-fired power plants to either shut down or make major investments in emissions control technology.

Senac said there are no regulatory mandates that would require any of the company’s five coal-fired units to install scrubbers at this time, but the company continues to monitor all regulations that come out. Based on final rules being made by the EPA, the company will make decisions on capital improvements to its current energy fleet.

Four of the company’s coal-fired units are in Arkansas, which is currently putting together a state implementation plan for EPA regulations.

“A lot depends on how that turns out,” Senac said.

If the company will be required to install scrubbers on its coal-fired units, Senac said it will look at the economics of the regulations, along with the cost of fuel, and make a decision on how to proceed based on those factors.

“We think probably in the next two or three years we’ll get a little bit of clarity and more certainty on some of the regulations,” he said.

“I think it’s difficult for the industry because there is a lot of uncertainty surrounding the regulations and the standards. A lot of these things we see, we anticipate that regulations are going to come out and next thing you know, things get held up in the court system, they get overturned and vacated. When you’re looking at billions of dollars worth of capital investment and infrastructure, the uncertainty really is a big, big detriment to that. You just don’t have many people today that want to step out and build sizable coal units in the United States because there’s just so much uncertainty.”

A commitment to the environment

Despite the uncertainty around regulations for energy companies, Entergy has worked on ways to reduce emissions to help reduce the impact of global climate change. The company was the first U.S. utility to voluntarily commit to stabilize its greenhouse gas emissions, and J. Wayne Leonard, who retired as chairman and chief executive officer of Entergy on Jan. 31, has advocated for a per-ton fee on carbon emissions.

“You start to find yourself posing the question of ‘After I die, what?’, and then it really starts to dawn on you that the real question is, ‘Before I die, what?'” Leonard said in a speech to members of the National Wildlife Federation while accepting an award for Entergy’s environmental programs last November.

“I can think of no time in history when the planet is in as much peril as it is today,” he said. “We were not supposed to be facing the possibility of mass extinctions in anybody’s lifetime … but here we are.”

Senac said one of Leonard’s issues, and an issue likely to continue to be looked at by current chairman and CEO Leo Denault, is how to encourage investments in technology that can reduce emissions and be used globally. Senac said it will be key for manufacturers to produce viable technology that can be used on a commercial scale and also makes enough economic sense that other countries will choose to invest in it as well.

He warned, however, that it is also important to not get too far ahead of what is required because of potential cost recovery issues with regulatory commissions but added the company is taking steps to reduce emissions on current units as well as retiring older, less efficient units to cut down on emissions. Entergy’s nuclear fleet also helps in reducing emissions created from power generation.

Entergy was named in the 2012/2013 Dow Jones Sustainability North America and World Indices and the 2012 Carbon Disclosure Leadership Index. It was one of only two U.S. companies in the electric utility industry selected to the Dow Jones Sustainability World Index. Being named to the indices marked the 11th consecutive year the Dow Jones Sustainability Index has included Entergy on either the world or North America index. In addition, Entergy has been named to the Carbon Disclosure Leadership Index eight of the past nine years.

“I think as a company we have done a very good job trying to reduce our total emissions,” Senac said.


Entergy’s dedication to helping improve quality of life isn’t limited to just its emissions, however. The company works to help its customers and is active in giving to charities, including endowing a $5 million charitable fund in Leonard’s name when he retired from the company. The charitable fund was endowed through shareholder-funded donations to the Entergy Charitable Foundation.

During Leonard’s tenure as CEO, which began in 1999, Entergy has donated more than $50 million to charitable initiatives and advocacy efforts that successfully helped move low-income residents toward self-sufficiency, including $16.5 million in grants in 2011 to improve the quality of life in the areas where it operates. Among them were campaigns to improve early childhood education programs and financial support of a matched-savings program that has helped 19,000 people and created an economic impact of $69 million over the last 10 years.

“I think that we are a very caring company that is truly concerned about our customer base,” Senac said.

He added the company’s service territory includes areas with some of the highest poverty rates in the U.S., and the company is very passionate about doing everything it can to provide reliable service and the lowest possible rates for its customers. Having low rates not only helps its residential customers, but it also helps keep costs down for the company’s industrial base, which helps spur economic growth in the area.

Senac said it is also important to provide reliable service for Entergy’s customers.

“I think we have excellent reliability performance, especially in the area we serve where we have some of the greatest fluctuations of power on a daily basis,” he said, noting that the southern U.S. can have large energy peaks in the summer because of the air conditioning loads and other similar factors.

Another part of providing the best possible services to Entergy’s customers is an ability to respond quickly to major storm events, which can include everything from hurricanes to ice storms in Entergy’s service area. Senac said the company has a long history of handling storms and is recognized across the industry for its ability to do so.

“It really is what I would consider one of our core competencies,” he said. “Where we live, we’re kind of under the constant threat all across the summer of having storms.”

still growing

As Entergy continues to work best to serve its customers, the company will continue to go through improvements and upgrades.

“I do believe that our entire industry is at a critical juncture,” Senac said, adding that a lot of utilities are hitting the same century mark as Entergy and that there is a lot of infrastructure in the utility industry that requires upgrading.

Entergy has worked to make upgrades in its infrastructure and changes to benefit its customers, and recently has proposed some changes with its transmission business. It has received all necessary approvals from regulators in Arkansas, Louisiana, New Orleans, Mississippi and Texas to join the Midcontinent Independent Transmission System Operator, which is planned for December 2013. Customer savings are projected to reach approximately $1.4 billion in the first decade of MISO membership, according to Entergy.

In addition, Entergy and ITC Holdings Corp. filed a joint application with the Federal Energy Regulatory Commission for approval to spin off and merge Entergy’s transmission assets into a subsidiary of ITC. The move, announced in December 2011, would allow for “greater capacity for investment, singular focus and excellence in operations,” according to Theo Bunting, Entergy’s group president of utility operations. The companies hope to receive all regulatory approvals and complete the transaction in 2013.

For a company that began with a handshake agreement and two sawdust-operated power generators 100 years ago, growth and change is not a new concept. Senac said there has been rapid technological change in the past 25 years, and he expects Entergy to take advantage of that change to better serve its customers.

“If you just think about advancements in technology, communications, the medical arena, just the growth and demand for energy across the globe … I think it’s going to be continuous,” he said. “I think you’ll see phenomenal change in the next quarter of a century.”

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