Power plant moving on schedule

A new natural gas power plant set for construction in Morgan City will increase the generating capacity for more reliable power to residents of Houma, Morgan City and four other cities in Louisiana.

Construction is slated to begin in April for the plant equipped with a combustion turbine generator, heat-recovery steam generator, steam turbine generator and generation step-up transformers.

The plant will produce 64 megawatts of electricity and Houma’s contribution of $49 million to the project warrants the city 25 megawatts of the plant’s capacity. The city of Houma powers about 13,500 customers.

Other cities associated with the Louisiana Energy and Power Authority such as Jonesville, Plaquemine, Rayne and Vidalia have also contributed to constructions costs totaling $120 million.

Tom Bourg, utilities director for Terrebonne Parish, said the combustion turbine works similar to a jet engine and there is “not much difference from a jet on a plane.”

The large amount of exhaust from the engine is put into a steam boiler, which creates more power.

As natural gas prices continue to fluctuate, Bourg said the new plant gives everyone involved “insurance” against high gas prices.

“As gas prices go up, the efficiency of the plant is more and more valuable,” Bourg said.

He mentioned natural gas prices after Hurricane Katrina spiked from $3.50 to $16, an expense that was passed on to consumers.

“Based on what we know about the market and the anticipated cost of production, we expect that it will be very economical and that it will likely run the majority of the time except for scheduled maintenance,” he said of the new plant.

Although Houma has an entitlement of 25 megawatts, how much energy the city receives from the plant is based upon how much it operates – a decision left up to the Midcontinent Independent System Operator.

MISO, a regional transmission organization, prevents market power abuse and delivers power across North America.

Bourg said before Houma joined MISO system on Dec. 18, 2013, the city’s electricity was approximately 50 percent from the Rodemacher Power Station in Lena, La., 35 percent from market supply and 15 percent from the Houma Generating Station.

Now, MISO determines the timeframe which generators operate under their jurisdiction, based upon economic dispatch to meet the system load at the lowest possible cost to all of the generation owners.

“We don’t decide which units run and where our energy comes from,” Bourg said. “And we don’t go to market to get quotes from people for energy supply. There is one energy supplier, MISO.”

Houma is in an area where there are severe transmission constraints and when the load is high, there is inadequate transmission capacity to move power through the region.

As the Houma Generating Station approaches 50 years old, it comes with a high operating cost and efficiency rate of about 48 percent, Bourg said. But when there are high load periods, MISO calls for the Houma plant to operate.

He said the advantage of the new market structure with MISO is everyone pays the same price and the highest operating cost is the price every operator gets paid per unit.

“Everyone pays the same price under MISO,” he said. “It is the most economic supply for everybody.”

Terrebonne Parish President Michel Claudet said as Houma continues to grow there is the definite need for additional electric resources.

“Our facilities are well-kept but they don’t provide enough electricity,” Claudet said. “We also see other generating facilities that are getting older and need to be replaced in the future.”

He added the project is also important to help import lower power costs for residents.

Morgan City Mayor Frank “Boo” Grazzaffi said the city currently operates on a steam generated plant that is old and outdated, which prompted their involvement in the project.

“With the possibility to stabilize our rates for years to come, the city felt it was in our best interest to be part of this project with LEPA,” Grazzaffi said.

Morgan City will receive 10 megawatts of the plant’s 64 megawatt capability for their almost $20 million input for construct. Construction of the new plant will take place on Youngs Road in Morgan City behind the current steam plant.

“The steam plant will continue to operate but I’m assuming, over time, there will be discussions to discontinue it,” he said. “To have a state of the art facility right here in our backyard, we’re fortunate.”

As far as the Houma Generating Plant’s existence, Bourg said that is an evaluation and discussion that continues.

“It costs an excess of $2 million per year in operation and maintenance to keep that plant operable,” he said. “It’s a substantial expense but at this point we still need it.”

Bourg and Claudet mentioned the possibility of installing a new combustion turbine plant in Houma as the utilities department gets more experience with the new market structure and economic feasibility of the new plant.

“Our consultants have recommended such an installation and we continue to evaluate it,” Bourg said.