‘Backed into a corner,’ Texas regulators consider cost caps for Entergy gas plants

AI generated summary

The Public Utility Commission of Texas is evaluating the imposition of cost caps on Entergy's proposal to construct two gas-fired power plants with a total capacity of approximately 1.2 GW. The commission's concerns stem from Entergy's failure to adequately explore alternative options and demonstrate the cost-effectiveness of the projects, which are projected to cost around $2.4 billion. PUCT Chair Thomas Gleeson highlighted the need for conditions on the approval process, suggesting a potential capital cost cap of $1.8 billion that Entergy could seek recovery on, given the lack of consideration for lower-cost alternatives.

As electricity demand in Texas continues to rise, Entergy Texas anticipates a significant increase in peak load, necessitating additional capacity. While the utility argues that the proposed plants are competitively priced and will yield substantial net benefits, concerns have been raised regarding the selection process for these gas plants. Critics argue that Entergy did not conduct a request for proposals (RFP) to explore other options, although Texas law does not mandate such a process. The commission plans to revisit the gas plants' proposal in its upcoming meeting, with discussions around the potential for cost caps still ongoing.