Expert Witness Support for Entergy Texas Rate Case

Sierra Club
Project completed January 2023

Synapse provided expert witness support to the Sierra Club in the rate case for Entergy Texas. Our testimony and analysis focused on evaluating the utilization and economics of the company’s coal plants at Unit 6 of the Roy S. Nelson Generating Plant and Big Cajun 2 Unit 3. We evaluated the recent historical performance of these two coal plants and assessed how the plants are likely to perform going forward. We based our assessment on both the company’s own analysis, as well as our review of the risks of continued reliance on coal resources. We also reviewed steps the company has taken to secure replacement resources.

We found that that both Nelson Unit 6 and Big Cajun 2 Unit 3 have historically incurred costs in excess of their market energy and capacity values. These excess costs have been passed on to Entergy Texas’ ratepayers. Further, we found that Energy Texas’s own analysis shows that retiring the units in 2026 and 2026 respectively and replacing them, is less costly than investing the capital and maintenance costs required to maintain the units. We also found that Entergy Texas was not proactive in evaluating replacement resources for Nelson 6, despite knowing it would likely require substantial additional capital investments for environmental compliance to maintain the unit. Finally, we concluded that Entergy Texas did not take an active role in maintain and operating Big Cajun 2 Unit 3 or planning for its replacement.

We recommended that Entergy Texas commit to retire both units in the near term (2026 for Nelson 6 and 2025 for Big Cajun 2 Unit 3), and that the Commission limits spending at the plants only to what is required to maintain reliable operations through the retirement dates. We further recommend that the company consider short-term capacity market purchases, in the event that a large capital investment is required at either plant.