Legal & Regulatory

Hydro Plant Saved by Commission-Approved Agreement

Entergy Louisiana, Cleco Power, and Southwestern Electric Power Co. (SWEPCO) have secured a power sales agreement (PSA) to buy power generated by the 80-MW Toledo Bend hydroelectric plant—but only for five years. 

The Louisiana Public Service Commission (LPSC) on October 26 approved the PSA, providing new life, albeit briefly, for the 1963-licensed Toledo Bend project, which is owned by the Sabine River authorities of Louisiana and Texas. It allows Entergy Louisiana to purchase up to 43 MW (54%) of the plant’s capacity, while the remainder (23% each) will be purchased by Louisiana utility Cleco and American Electric Power subsidiary SWEPCO. 

The authorities entered into a 50-year agreement in 1964 (effective in 1968) with Gulf States Utility Co,, Central Louisiana Electric Co., Inc., and Louisiana Power and Light Co. (predecessors of the Energy Lousiana and Cleco) for sale of power generated by the hydroelectric facility. But in April 2015, the parties notified the authorities that they “did not wish for it to be automatically renewed under then-current terms,” and the agreement expired on April 30, 2018. 

However, according to documents submitted to the LPSC, before the agreement expired, the authorities approached Entergy Louisiana and Cleco, and “ultimately proposed and negotiated” a proposed PSA. SWEPCO, too, was contacted and asked to participate in the PSA “for the benefit of residents in the region.” In the meantime, the utilities have been buying power from the authorities under an interim agreement.

In August, the LPSC directed the utilities to submit a request for its consideration of the proposed PSA within a week so the commission staff could facilitate an “expedited proceeding,” effectively allowing it to be considered outside of the administrative hearings division process, and allowing for the period of interventions to be shortened to no more than 10 days. The utilities’ proposal stressed that the PSA served the “pubic convenience and necessity and is in the public interest, and is therefore prudent.” 

The PSA, which has now been approved by the LPSC, expires in May 2023. While the actual power purchase terms and values are confidential, the PSA allows the applicants to buy 80 MW of “must-take, must-take, unit-contingent energy from the Toledo Bend hydroelectric  facility, along with as-available capacity, capacity-related benefits, and environmental attributes,” an Entergy document says. The agreement takes into account a 50-MW capacity threshold specified in a 2004 LPSC market-based mechanism general order.  

The approved PSA will mean that Toledo Bend will remain a “valuable part of our renewable energy portfolio,” said Phillip May, president and CEO of Entergy Louisiana. May noted that Entergy Louisiana, which serves more than a million electric customers in southern, central, and northeastern Louisiana, has 180 MW of renewable resources, which also include run-of-river hydro, biomass, and waste heat recovery. The Entergy Corp. subsidiary also owns the Waterford 3 and River Bend nuclear units. 

The project is located on the Sabine River on the Texas-Louisiana border in Panola, Shelby, Sabine, and Newton Counties in Texas and DeSoto, Sabine, and Vernon Parishes in Louisiana. It occupies 3,797 acres of federal land within the Sabine National Forest and Indian Mounds Wilderness area and 200,300 acres, which is owned in fee by the authorities. It features include a reservoir, a dam, saddle dikes, a powerhouse with associated intake and tailrace channels, a spillway and associated spillway channel, and a 138-kV transmission line. 

—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)


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