Entergy first proposed the conversion back in July 2007, when it came first before the LPSC, an elected body of five officials who regulate utilities. Two days after the application was filed, the LPSC began receiving complaints (legally called interventions) from groups such as chemical and oil companies, WalMart, and a coalition of environmental groups including the Louisiana Alliance for Affordable Energy, the Sierra Club, Louisiana Environmental Action Network, and Gulf Restoration Network.

The objections: both consumer and business rate payers will be forced to pay in advance 1.5 billion dollars for a coal plant whose prospects are precarious. The technology is outdated and will release pollutants such as carbon in unsafe quantities. The subsequent approval of this conversion by the LPSC is irresponsible and imprudent. The expenses will be felt not only in your wallet, but also on your conscience.

“The number one thing that really disappointed us was the fact that the commissioners had made up their minds ahead of time,” said Leslie March, Chair of the Delta Chapter of the Sierra Club. March’s group, with others, intervened and presented a strong case for dismissal.

The main argument on behalf of rate payers concerns Entergy’s request to “recover construction-related financing costs” prior to the building of the plant. The application that passed on Thursday was step one; Entergy has the go-ahead to purchase parts needed to build the plant (totaling an estimated $225 million) before final approval to build in a year. For the second time in Louisiana’s history, this cost will be added to utility bills before the plant begins operation, because, according to the application to convert, it is unfair to expect stockholders to shoulder this cost. Consumers will be paying current utility bills from the natural gas plant in addition to a “fuel adjustment charge” for the plant.

Overall cost estimates for the plant have been in flux. When Entergy initially presented the proposal, the costs ran around $1 billion, but three months later they jumped to $1.5 billion. The shift occurred when Entergy chose the Shaw Group Inc. as the construction firm for the plant. During the hearing on Thursday, however, the LPSC stated there was still analysis to be done and a final cost wouldn’t be available until July.

John Atkeison, Director of Climate and Clean Energy Programs for the Alliance for Affordable Energy, attended the hearing and said, “No one is even claiming a benefit until 2025, and that’s if it even happens.” “The most optimistic figure was 2025. The Louisiana Energy User’s group was saying 2041.”

Rick Fabiani, a student attorney who worked on the case, said, “They’re facing a tradeoff between the volatility of natural gas prices and the cost of carbon from coal. In our view, and in many scenarios, the cost of carbon is higher.”

The Environment
In addition to financial concerns, environmental organizations have voiced worries. Carbon is the dirtiest of all fossil fuels, and the key gas which could tip the balance of global climate and send us on path toward violent weather patterns and rising sea levels.

Currently coal plants amount to thirty-five percent of all carbon emissions. Efforts to reduce greenhouse gases, such as changing fuel standards or planting trees are simply overwhelmed by the existence of coal fired plants. For example, if California’s legislation to reduce carbon dioxide emission from cars by twenty-five percent passed on all cars in 2009, the emissions from one medium sized coal plant running for only eight months would negate this entire effort. There is still no way to effectively sequester, or catch, the carbon that’s emitted. There is no such thing as clean coal.
“The decision is moving in exactly the wrong direction at the worst possible time,” said John Atkeison.

Nationally, pressure has been mounting on both business and government to reduce greenhouse gas emissions, specifically carbon. We face a new administration in the White House in the next year, and with that most analysts are predicting a carbon tax which will fundamentally increase costs from dirty energy sources, like coal plants.

Campaigns worldwide are calling for reductions of carbon dioxide levels and cleaner energy sources. “The rest of the county is making different decisions, even conservative states like Florida and Kansas,” said Leslie March. “But here in Louisiana, it’s business as usual.”

Into the Future
The approval of Entergy’s plant avoids the issue of volatile coal prices in the future. “There are many scenarios, most of which sink the ratepayers in this proposal,” said Corinne Van Dalen, instructor at the Tulane Environmental Law Clinic, which intervened on behalf of the Environmental Alliance.
There are over six bills currently in Congress which significantly limit carbon and other greenhouse gas emissions. One new bill on the floor would cut carbon by 80% by 2050, and some are even stricter than that. “It will be billions of dollars for polluters,” said Mary Nagle, student attorney with the Tulane Environmental Law Clinic. “Basically, rate payers will pay for the plant, even if Entergy doesn’t use it due to lack of political or economic viability.”

The threat is that if coal prices rise precipitously in the future due to carbon taxing, or if the political climate in Washington steps up and puts a moratorium on new coal plants, the conversion at Little Gypsy will come to a halt. Entergy’s decision to tax you ahead of time would appear to shift this financial risk from their stockholders.
“Look at their website,” said Atkeison. “Entergy claims to fight climate change, but in fact they’re doing the exact opposite.” Medium sized plants, like Little Gypsy, can emit up to eight million tons of carbon a year.

Aside from producing carbon, burning pet coke will produce huge amounts of sulfur, mercury and other toxic chemicals. The Louisiana Department of Environmental Quality has given the go ahead, but the EPA is still debating whether or not to give Entergy the permits it needs to build. The Sierra Club and others have intervened to try and halt this conversion.

With lawyers at the Law Clinic still undecided as to whether or not to appeal the decision, it appears that the EPA may be our last hope in stopping this conversion before it’s too late. If the EPA withholds permits, Entergy may have to halt the conversion.

Given the history of polluting power plants in Louisiana, Entergy and the LPSC should consider the damage of another plant spewing carbon, sulfur and other harmful chemicals into our atmosphere. Many chemicals associated with this plant have been linked to lung disease and other respiratory problems. These immediate health impacts will merely be compounded environmental woes if climate change continues as predicted. No one needs a reminder of how vulnerable Louisiana is in a situation with rising seas and frequent storms.

Power Play
“The only people who make money on these deals are contractors,” said Leslie March. The cards were stacked against Entergy on this case and yet the conversion passed unanimously. “The Commissioners are elected, but Entergy is the largest company in the state,” said student attorney Mary Nagle. “They wield a lot of power.”
Before the final decision was made, LPSC Chairman Jay Blossman told the Times-Picayune he fully favored the conversion. Lawyers immediately moved to remove him from the ruling; state law requires that members objectively oversee such proceedings. The motion failed and the politics of Louisiana continued in their shady ways. Instead of looking to the future in forward-thinking, responsible manner, Entergy Co. and the LPSC are resorting to the status quo, but it is a status quo that we can no longer afford.

Let’s count: suspicious up-front charges for plant construction, immediate health risks, environmental degradation and contribution to global warming which poses a detrimental risk to New Orleans, rate hikes in future, and crooked politics. The “business as usual” motto of Louisiana’s elite is failing its people. Any way you look at it, this plant reeks.