Gustav slams Entergy's Louisiana power grid

HOUSTON (Reuters) - Entergy Corp (ETR.N), Louisiana's largest utility, on Tuesday said 70 percent of its 1.1 million customers were without power a day after Hurricane Gustav slammed into the Gulf Coast, rivaled only by 2005's Hurricane Katrina in its destruction.

Entergy warned of "extremely severe damage" to its transmission grid, and said 13 of 14 key transmission lines carrying power to New Orleans were out of service.

"The damage is not as severe as Katrina in New Orleans," said Dennis Dawsey, Entergy's vice president of distribution. "In Baton Rouge, we saw significant damage."

The New Orleans-based utility has not estimated the potential cost for rebuilding its grid. But repairing the swath of twisted power lines left by hurricanes Katrina and Rita in 2005 cost the investor-owned utility about $1 billion.

Gustav, which came ashore 70 miles west of New Orleans on Monday, wreaked havoc on Entergy's power grid, cutting power to 850,000 of Entergy's 1.1 million customers at its peak.

In comparison, Katrina knocked out Entergy's entire power grid. After Katrina, Entergy approached the Bush administration seeking $500 million in federal funds to rebuild its system. It eventually revised that request down to $350 million, which the White House rejected as an inappropriate federal bailout.

Entergy is a key power supplier to U.S. energy installations like refineries and natural gas processing plants. Five of 12 refineries in the state have no access to power due to grid damage.

Baton Rouge is the state's capital and home to the second-largest refinery in the nation, operated by Exxon Mobil Corp, with capacity of 504,000 barrels per day.

Due to extensive damage to at least 13 high-voltage power lines, company officials offered no timetable for power restoration. Repairs could take weeks in some areas, they said.

Restoring electricity to homes and businesses will require a delicate balancing act. The utility must match transmission capacity and generation capacity or risk triggering a widespread blackout due to power imbalances, Dawsey said.

While Gustav's impact on the state was less severe than devastation left by Katrina's flooding, its damage to Entergy's grid was worse, particularly in the Baton Rouge area, said Renae Conley, president of two Entergy utility units serving Louisiana.

As many as 1.4 million homes and businesses state-wide were without power immediately after the storm, said Louisiana Gov. Bobby Jindal.

Significant damage was reported at Entergy's Willow Glen substation between Baton Rouge and New Orleans, Dawsey said.

Three 500-kilovolt lines and six 230-kv lines at the substation were knocked out of service.

With just one remaining high-voltage line linking Baton Rouge to New Orleans, Entergy was forced to drop New Orleans into a "power island," meaning it is no longer connected to the system and is being served only by three nearby power plants.

"We are attempting to tie the 230-kv systems together in order to stabilize the Baton Rouge area before adding load," said Dawsey.

Entergy said more than 9,000 workers were en route to help with repairs. Some service can be restored in areas where it is safe to do so, but assessment of damage to the system and work on the transmission system is the company's top priority.

(Editing by Chris Baltimore and Christian Wiessner)