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Insights > 40 in 4: The Southeast Texas energy challenge... and the solution
40 in 4: The Southeast Texas energy challenge... and the solution
06/19/2024
The old saying goes “everything is bigger in Texas.” The saying is true when it comes to the surge in the demand for power, too. Because of extraordinary growth throughout the state, specifically in Southeast Texas, we need more electricity, and we need it fast. Southeast Texas is in a great position to create thousands of new and better jobs and boost economic development, but our success relies heavily on sufficient power.
Entergy Texas has already taken significant steps to support the rising power demand. In 2021, we opened a 993-megawatt natural gas plant in Montgomery County and acquired a 150-megawatt solar facility in Polk County. Our Orange County Advanced Power Station, a 1,215-megawatt natural gas plant under construction in Bridge City, is set to open in 2026. But guess what? That’s still not enough.
We expect our customer base to grow significantly over the next few years, which requires an additional 1,600 megawatts of generation capacity by 2028. To put that in perspective, 1,600 megawatts represent approximately 40% of Entergy Texas' current generation capacity. This means there’s a need for a 40% increase in just four short years. Our answer to this time-sensitive challenge is a six-step plan we call the Southeast Texas Energy Plan or the STEP Ahead plan. To keep up with the growth of our area, we realize that Entergy Texas must stay a STEP Ahead in planning for our customers’ future power needs.
Everything we do always starts with how our actions impact the customer, which is why Step 1 of our plan focuses on keeping rates affordable. Our rates have consistently been below the national and state averages, and our goal is to maintain that position during the buildout of the STEP Ahead plan.
Step 2 is about speed. To hit the 40% increase in generation capacity by 2028, we have to start NOW. You can’t build a power plant overnight, so it's essential that we act quickly. Utilities around the globe are making similar investments. In order for Texas to remain competitive and avoid supply chain constraints, we need to stay in the front of the line for key materials and workers.
Step 3 is about making sure we have dispatchable, 24/7 power for reliability. In early June, we filed an application with the Public Utility Commission of Texas to seek approval of two state-of-the-art natural gas power plants named Legend and Lone Star. The design of these plants will enable carbon capture and hydrogen technology to help meet customer sustainability goals and position Entergy Texas to comply with current and potential changes to federal regulatory requirements. This approach shows we’re not just planning to build, we’re planning to build smart.
Step 4 recognizes that we also need to ensure renewable generation is included in this new power portfolio. We are proposing two new solar power plants with a combined output of 311 megawatts. The industries Southeast Texas recruits for job creation are now requiring solar and other forms of renewable power generation for siting new investments, and a wider variety of generation sources protects our customers from price volatility in just one source.
Step 5 acknowledges how important it is to build transmission “highway” lines necessary to transport power more directly and quickly to the fast-growing areas of Southeast Texas. Our plan calls for upgrading existing transmission infrastructure and installing new transmission lines to improve reliability and route power where it needs to go. While most Texans are connected to the Electric Reliability Council of Texas (ERCOT) power grid, Entergy Texas operates under the Midcontinent Independent System Operator (MISO) power grid. This allows us to draw power from out-of-state, when necessary, which benefits our customers.
Step 6 acknowledges that Southeast Texas is seeing an increasing number of severe storms. We developed a multi-year resiliency plan to reduce restoration costs and the duration of weather-related outages. Details will be announced in our filing with the PUCT in the coming days, but part of the plan includes leveraging utility grants from the recently passed Texas Energy Fund to make the necessary resiliency investments affordable. In the end, we know customers will get the most from the new generation and transmission investments as we harden the rest of our power grid to withstand extreme weather events.
So, as you can tell, these next four years are crucial. This challenge is about more than just keeping the lights on. It's about supporting our growing population and industries, creating new and better jobs, and dealing with the extreme weather that seems to hit us more often each year. If we don’t act quickly, we could face additional challenges like frequent blackouts, higher energy costs, and even economic downturns. By supporting investments to build more generation, diversify our generation portfolio and strengthen the grid, we can ensure that Southeast Texas has the power it needs to thrive. Together, we can build a brighter energy future for our communities.
But we can’t wait. The time to act is now.
