Entergy’s Cottonwood pause reinforces the need for rigorous review before approving a proposed $4.1 billion investment in two new gas plants

• What's new: EDF expert testimony finds Entergy has not demonstrated that its proposed $4.1 billion investment in two new gas plants is the lowest-cost, lowest-risk way to meet Louisiana's growing electricity demand.

• Why it matters: Entergy's decision to pause its proposed Cottonwood acquisition underscores why regulators should rigorously evaluate need, cost, risk and alternatives before approving major generation investments, particularly amid uncertainty about future electricity demand.

• What's next: EDF is urging the Louisiana Public Service Commission to require Entergy to compare all viable alternatives through a competitive all-source evaluation before deciding whether the proposed gas plants are the best investment for customers.

Environmental Defense Fund last week filed expert testimony urging the Louisiana Public Service Commission to require Entergy Louisiana to demonstrate that its proposed $4.1 billion investment in two new natural gas power plants is the lowest-cost, lowest-risk option for customers before approving the projects. Entergy's decision this week to pause proceedings for its proposed acquisition of the Cottonwood Generation Facility underscores why regulators should carefully evaluate major generation investments before committing customers to billions of dollars in new costs.

"When billions of customer dollars are at stake, the question isn't whether Louisiana will need more electricity. It's whether these gas plants are the best way to provide it," said Liz Russell, State Director, Louisiana at Environmental Defense Fund. "The Commission should require Entergy to make that case before approving a pair of new gas plants that could add almost $15 a month to the bills of Entergy Louisiana customers."

While the Cottonwood proceeding is separate from Entergy's applications to construct the proposed Waterford 6 and Westlake power stations, all three proposals are part of the utility's broader strategy for meeting projected electricity demand. The pause underscores why regulators should evaluate individual generation proposals in the context of systemwide resource needs and require a rigorous assessment of need, cost, risk and alternatives before approving major investments, particularly as uncertainty continues around industrial growth, data center development and long-term customer costs.

Prepared by energy planning expert Dr. Maria Roumpani, the testimony concludes that Entergy has not demonstrated the proposed Waterford 6 and Westlake gas plants are the lowest-cost, lowest-risk way to meet projected electricity demand. It recommends the Commission require Entergy to conduct a competitive all-source evaluation before approving the projects and identifies several concerns with the proposal, including:

• Demand forecasts that rely heavily on uncertain industrial growth projections.
• Limited evaluation of lower-cost alternatives, including energy efficiency, demand response, solar, battery storage, transmission improvements and industrial combined heat and power.
• Financial risks that could leave customers paying for generating capacity that ultimately isn't needed.

The testimony also recommends strengthening demand forecasts, evaluating transmission solutions and grid-enhancing technologies and assessing the risks to customers if projected industrial growth does not materialize.