Powering Morgan City -- Matte: New power plant to provide price stability, power reliability
MORGAN CITY — The new Louisiana Energy and Power Authority combined-cycle gas turbine power plant slated to come to Morgan City by September 2015 would provide more stability in prices for customers, and the plant will have the capability to start without any electricity, said former Morgan City mayor and current LEPA board member Tim Matte.
The new plant that will run on natural gas and run much more efficiently than the Joseph Cefalu Steam Plant making the communities involved in the project less susceptible to the “wild swings” in prices in the previous years, Matte said.
Matte does not expect the new LEPA plant to necessarily increase or decrease the price Morgan City residents pay for utility bills.
Power costs are fairly inexpensive today though, Matte said. “They’re probably as cheap today as they’ve been for the last several years,” Matte said. Utility rates always vary based on fuel costs, he added.
The new plant will have a combined-cycle combustion turbine generator with “black start capability,” which means it does not need electricity to start, Matte said. That is a major issue the Joseph Cefalu Steam Plant has faced as it requires electricity to start the generators, he said. The new generator could be started by simply pressing a button on a computer screen, he said.
The new plant’s reliability is another benefit to the city, Matte said.
The location of the new plant in Morgan City is primarily to try to resolve some transmission issues with getting low-cost power resources to the area, including communities such as Houma, Matte said.
The fuel costs to run the new plant will be significantly cheaper than the Joseph Cefalu Steam Plant, Matte said. The existing plant is paid for, so there is no debt service unlike on the new power plant, he said. “But on the other hand, you have twice the fuel costs,” Matte said.
When natural gas prices hit $4.83 per million metric British thermal units, “we believe this resource will be cheaper than what our utility costs are today,” Matte said.
The natural gas source for the new plant, while negotiations are still in the works, will probably come from a new natural gas line that would be created under the Intracoastal Waterway, Matte said.
The communities involved in the new power plant project include Morgan City, Plaquemine, Rayne, Vidalia, Houma and Jonesville. As of May 21, all of those communities had been approved by their councils to participate in the project, Matte said.
Those communities will begin borrowing money this year to generate funds to build the roughly $120 million plant. Morgan City’s share of the debt associated with the plant is about $18 million, Matte said.
What will happen with the Joseph Cefalu Steam Plant is yet to be determined, Matte said. With the capacity of the combined cities involved in the new plant project, the plant would have to include a reserve of power in case of emergency, Matte said.
“We do believe that it’ll have a life for some time moving forward,” Matte said. “But it may never be called on.”
Morgan City will acquire a 10-megawatt share of the proposed 64-megawatt plant, Matte said. The peak load for the city during summer approaches 45 megawatts, he said.
The city owns 20 megawatts in LEPA’s Rodemacher plant in Boyce that Morgan City can rely on to provide another power source along with the Joseph Cefalu Steam Plant and power purchases through the market, Matte said.
By having the new power plant in Morgan City, it could make other resources available to be tapped that had previously failed due to transmission issues. “It’s possible that we’ll find actually cheaper resources than this new plant, but we could only find it because we have this plant available and on line,” Matte said.