Entergy (ETR) To Build 994MW Natural Gas Plant In Louisiana

Entergy Corporation's (NYSE:ETR) subsidiary, Entergy Louisiana, announced that Louisiana Public Service Commission has approved its plan to construct the Lake Charles Power Station.

Details of the Plant

Entergy wants to build a combined-cycle power plant in Westlake, LA, with a capacity of 994 megawatt. This natural gas-fired plant is in line with Entergy Louisiana's plan to generate clean, efficient energy which will strengthen the state’s economic growth and will add to the savings of its customers.

The total cost of the project is expected to be around $872 million. This will include transmission and other project-related costs and contingency. The company wants to start the construction by Aug 1, 2017 and the plant is expected to go live by June 2020.

Expected Benefits from the Project

Over the anticipated 30-year life this high efficient plant is expected to save an expenditure amounting $1.3–$2 billion for customers. With the construction of this plant, the company will be able to avoid about $600 million of transmission projects which would have been necessary to maintain reliability in the Lake Charles region.

This plant is projected to create over 1200 direct and indirect jobs a year throughout the states. The company will employ 30 workers after the completion of the project.

Among all other positive impacts, it will bring down the greenhouse emission by almost 40% once it becomes operational.

Trump’s Policies and Their Impact on Clean Energy

During his electoral campaign, President Trump promised to revive the dying coal industry. His recent decisions to walk out of the Paris Climate Agreement and repeal the clean power plan have boosted lagging coal companies which were on the verge of bankruptcy. This in turn is expected to keep fossil fuel-based electricity plants afloat longer than expected and hurt companies with a focus on alternative energy sources, at least in the near term.

However, his decision did not entirely discourage the major utility companies to shift their focus from lower emission sources. Irrespective of any stringent environmental regulations, companies like Xcel Energy Inc. (NYSE:XEL) , Duke Energy Corporation (NYSE:DUK) , Dominion Resources, Inc. (NYSE:D) etc., are still focused on reducing carbon emission. These companies are willing to invest substantial amount in the subsequent years to generate cleaner energy through natural gas and other renewable sources.

As a result of continued investments, these companies will not only contribute to a cleaner future but will also be prepared for any change in environmental regulations from the future governments.

Price Movement

Shares of Entergy have gained 2.1% in the last three months outperforming the Zacks categorized Utility-Electric Power industry's gain of 0.1%.

This is mainly because of the company's focus on disciplined investment in growth projects along with its pollution control measures and cost-containment efforts.

Zacks Rank

Entergy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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