Attempting to better accommodate the burgeoning Gulf Coast powerdemand, Entergy Corp. spent $1.9 billion to purchase 24 GE 7FAadvanced technology gas turbines and four steam turbines from GE,Entergy said yesterday. Delivery is scheduled through 2004. Theagreement includes turnkey installation of the 1,000 MW Freestonepower plant project and long-term service agreements (LTSAs) thatcover all scheduled maintenance for a period of 16 years followingthe start- up of each turbine.
Entergy, which currently distributes the 30,000 MW of power itgenerates to about 2.5 million customers in Louisiana, Texas,Mississippi and Arkansas, also said the purchases will supportcurrent and future projects by the company’s development arm,Entergy Power Group (EPG), create jobs and increase reliability.
“We had rolling power outages in our service territory lastJuly. The development opportunities that will surface because ofthis purchase will go a long way to solve problems like that,” saidCarol Clawson, an Entergy spokesman.
The production commitment from GE to Entergy comes as scores ofnew merchant power plants are being planned in the U.S. over thenext five years and deregulation drives demand for gas turbines toan all-time high. Donald Hintz, Entergy’s president, said thecompany plans on developing 15,000 MW “over the next several years”to help meet that demand.
“This is an important strategic investment in combustionturbines that provides us with a competitive advantage in siting,permitting and completing future generation projects,” said Hintz”This purchase is part of our long range plan to assure there issufficient power for our customers in the future, and willstrengthen our position in North America’s evolving competitivewholesale energy supply business.”
Entergy said 16 turbines will be used in projects in and aroundits existing service territory. In combined cycle operations, thiscould add as much as 4,000 MW of additional capacity to the area.The New Orleans, LA-based company said that is enough electricityto supply 1.5 million homes.
Four of the gas turbines are targeted for use at the Freestoneplant project located near Fairfield, TX. Announced earlier thisyear, the project is now in the late stages of the developmentprocess. EPG expects the permitting process to be complete byyear-end. GE was awarded the contract for turnkey installationwhile contract negotiations for fuel are expected to be completewithin the next 45 days. Entergy expects to begin construction inearly 2000 and have the plant in operation by mid-year 2002.
Entergy said a small portion of its cash reserves is committedto turbine acquisition until specific projects are identified andthen financed. Once project financing is in place, Entergy will bereimbursed in full for each specific turbine used in the project.
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