RPT-Entergy Texas seeks permit for gas-fired plant

Thu Mar 6, 2008 5:55pm EST

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HOUSTON, March 6 (Reuters) - Entergy Corp's (ETR.N) Texas utility seeks an air permit to build a new natural gas-fired power plant north of Houston.

Entergy Texas Inc, which has completed its plan to separate from Entergy Gulf States of Louisiana, filed for a permit for a 500-megawatt expansion at its Lewis Creek power station near Willis, according to the Texas Commission for Environmental Quality.

Entergy spokesman Dave Caplan said no decision has been made to build the new plant. The company wants to obtain a permit as an additional option as it works to select a power region under which Entergy could introduce competition to its 380,000 customers in Southeast Texas.

Lewis Creek is the site of two 35-year-old, gas-fired units operated by Entergy. The company may build two simple-cycle units at the site to produce 336 MW or a combined-cycle plant that could generate about 513 MW, Caplan said.

The Montgomery County area served by the Lewis Creek plant is one of the fastest-growing areas in Entergy Corp's four-state territory.

Over the last several years, Entergy Texas has been working unsuccessfully to comply with Texas legislation that opened a large part of the state's retail electric market to competition.

Texas regulators last October rejected Entergy's plan to connect to the state's primary power grid as too costly and of little benefit to other Texas consumers.

The commission ordered Entergy to take another look at how its Texas transmission network could be placed under the control of the Southwest Power Pool (SPP), a regional grid entity serving parts of Louisiana, Texas, Arkansas, Oklahoma, Kansas, Missouri and New Mexico.

Entergy's grid currently operates with an Independent Coordinator of Transmission located in the Southeastern Electric Reliability Council. Its system lacks the level of independent oversight Texas law requires to initiate competition, Texas regulators have ruled.

The SPP study is expected to take several months, Caplan said.

(Reporting by Eileen O'Grady; Editing by David Gregorio)

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