Entergy Services, Inc.

a 639 Loyola Avenue (70113)

PO. Box 61000 """"'—_— New Orleans. LA 70161-1000

gy Tel 504 576 6825

Fax 504 576 5579

Eadams4@entergy.com

Elizabeth L. Adams

Counsel

Legai Servsces__—,.Regu?£ry \ of

November 2, 2016

By Hand Delivery -

, Eve Kahao Gonzalez, Secretary

Li, Louisiana Public Service Commission

'

9"

Galvez Building, 12th Floor

602 North 5th Street

Baton Rouge, LA 70802

Re: Ex Parte: Application of Entergy Louisiana, LLC for Approval to Construct

Lake Charles Power Station, and for Cost Recovery (LPSC Docket No. U- )

Dear Ms. Gonzalez,

I have enclosed the original and three copies of a Public Redacted Version of the

Application of Entergy Louisiana, LLC (“ELL”) for Approval to Construct Lake Charles Power

Station, and for Cost Recovery. This ling includes the Direct Testimony and Exhibits of Phillip R. May, Joshua B. Thomas, Jonathan E. Long, Paul J. Girard, Ill, Charles W. Long, John P.

Hurstell, William C. John, Anthony P. Walz, Phong D. Nguyen, and Charles E. DeGeorge. Please retain the original for the record, two copies for your les, and return a date—stamped copy to our by-hand courier.

I have also enclosed three copies of the Highly Sensitive Protected Material (“HSPM”) Version of the referenced ling, which is being provided to you under seal pursuant to the

provisions of the LPSC General Order dated August 31, 1992, and Rules 12.1 and 26 of the

Commission’s Rules of Practices and Procedures. The condential materials included in the

ling consist of competitively sensitive market information, the disclosure of which presents an

unreasonable risk of harm to the Company and its customers, as well as participants in the

request for proposal process. Accordingly, it is critical that this information remain condential.

Please retain two copies for the Louisiana Public Service Commission Staff attorney and

research attorney and return a date—stamped copy to our by-hand courier.

Additionally, portions of Mr. C. Long’s testimony and exhibits are considered

Condential Energy Infrastructure Information (“CEII”) as dened by 18 C.F.R. § 388.113(c)(1). The sensitive nature of CEII requires additional protections and safeguards; therefore, the Company encloses an additional CEII version of the Direct Testimony of Mr. C.

Long and accompanying CEII exhibits CWL—2 and CWL-6. CEII disclosed in this docket is

Entergy Services, Inc.

a 639 Loyola Avenue (70113)

PO. Box 61000 """"'—_— New Orleans. LA 70161-1000

gy Tel 504 576 6825

Fax 504 576 5579

Eadams4@entergy.com

Elizabeth L. Adams

Counsel

Legai Servsces__—,.Regu?£ry \ of

November 2, 2016

By Hand Delivery -

, Eve Kahao Gonzalez, Secretary

Li, Louisiana Public Service Commission

'

9"

Galvez Building, 12th Floor

602 North 5th Street

Baton Rouge, LA 70802

Re: Ex Parte: Application of Entergy Louisiana, LLC for Approval to Construct

Lake Charles Power Station, and for Cost Recovery (LPSC Docket No. U- )

Dear Ms. Gonzalez,

I have enclosed the original and three copies of a Public Redacted Version of the

Application of Entergy Louisiana, LLC (“ELL”) for Approval to Construct Lake Charles Power

Station, and for Cost Recovery. This ling includes the Direct Testimony and Exhibits of Phillip R. May, Joshua B. Thomas, Jonathan E. Long, Paul J. Girard, Ill, Charles W. Long, John P.

Hurstell, William C. John, Anthony P. Walz, Phong D. Nguyen, and Charles E. DeGeorge. Please retain the original for the record, two copies for your les, and return a date—stamped copy to our by-hand courier.

I have also enclosed three copies of the Highly Sensitive Protected Material (“HSPM”) Version of the referenced ling, which is being provided to you under seal pursuant to the

provisions of the LPSC General Order dated August 31, 1992, and Rules 12.1 and 26 of the

Commission’s Rules of Practices and Procedures. The condential materials included in the

ling consist of competitively sensitive market information, the disclosure of which presents an

unreasonable risk of harm to the Company and its customers, as well as participants in the

request for proposal process. Accordingly, it is critical that this information remain condential.

Please retain two copies for the Louisiana Public Service Commission Staff attorney and

research attorney and return a date—stamped copy to our by-hand courier.

Additionally, portions of Mr. C. Long’s testimony and exhibits are considered

Condential Energy Infrastructure Information (“CEII”) as dened by 18 C.F.R. § 388.113(c)(1). The sensitive nature of CEII requires additional protections and safeguards; therefore, the Company encloses an additional CEII version of the Direct Testimony of Mr. C.

Long and accompanying CEII exhibits CWL—2 and CWL-6. CEII disclosed in this docket is

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Ms. Gonzalez

Louisiana Public Service Commission

November 2. 2016

Page 2

provided pursuant to, and shall be exempt from public disclosure pursuant to, 18 C.F.R. § 388.ll3(c)(l), the Commission’s General Order dated August 31, 1992, and Rule 12.1 of the Rules of Practice and Procedure of the Louisiana Public Service Commission. Please retain a

CEII Version for the record and return a date—stamped copy to our by—hand courier. An additional copy of the C Ell Version is enclosed and marked for the Administrative Law Judge.

Additional copies of the HSPM of this ling will be provided to the appropriate representatives of the Louisiana Public Service Commission Staff and made available to

intervenors once a suitable HSPM Agreement has been executed by the parties. Similarly, CEII

copies will be made available to individuals once a suitable C Ell Agreement has been executed.

Please note that the Company requests in its Application the Commission implement procedures to facilitate a decision on a timeframe consistent with its General Order dates

September 20, 1983, including shortening the intervention period to fteen days. Additionally, the Company request that notice of this matter be published in the Commission’s November 4, 2016 Official Bulletin.

If you have any questions, please do not hesitate to call me. Thank you for your courtesy and assistance with this matter.

Respectfully submitted,

Qda/mo Elizabeth L. Adams

ela

Enclosures

cc: Commissioners (public version only) Melanie Verzwyvelt (public version only) Melissa Watson (public version only) Paul Zimmering (public version only) Deborah Barta (public version only)

Ms. Gonzalez

Louisiana Public Service Commission

November 2. 2016

Page 2

provided pursuant to, and shall be exempt from public disclosure pursuant to, 18 C.F.R. § 388.ll3(c)(l), the Commission’s General Order dated August 31, 1992, and Rule 12.1 of the Rules of Practice and Procedure of the Louisiana Public Service Commission. Please retain a

CEII Version for the record and return a date—stamped copy to our by—hand courier. An additional copy of the C Ell Version is enclosed and marked for the Administrative Law Judge.

Additional copies of the HSPM of this ling will be provided to the appropriate representatives of the Louisiana Public Service Commission Staff and made available to

intervenors once a suitable HSPM Agreement has been executed by the parties. Similarly, CEII

copies will be made available to individuals once a suitable C Ell Agreement has been executed.

Please note that the Company requests in its Application the Commission implement procedures to facilitate a decision on a timeframe consistent with its General Order dates

September 20, 1983, including shortening the intervention period to fteen days. Additionally, the Company request that notice of this matter be published in the Commission’s November 4, 2016 Official Bulletin.

If you have any questions, please do not hesitate to call me. Thank you for your courtesy and assistance with this matter.

Respectfully submitted,

Qda/mo Elizabeth L. Adams

ela

Enclosures

cc: Commissioners (public version only) Melanie Verzwyvelt (public version only) Melissa Watson (public version only) Paul Zimmering (public version only) Deborah Barta (public version only)

BEFORE THE

zeta

LOUISIANA PUBLIC SERVICE COMMISSION

IN RE: APPLICATION OF ENTERGY

LOUISIANA, LLC FOR APPROVAL TO

CON STRUCT LAKE CHARLES POWER

STATION, AND FOR COST RECOVERY

DOCKET NO. U-

APPLICATION OF ENTERGY LOUISIANA, LLC

FOR APPROVAL TO CONSTRUCT THE

LAKE CHARLES POWER STATION, AND FOR COST RECOVERY

Entergy Louisiana, LLC (“ELL” or the “Company")' respectfully submits this

Application seeking approval and certication of construction of the Lake Charles Power Station

(the “Project” or “LCPS”), a nominally-sized 994-megawatt (“MW”) combined-cycle gas

turbine (“CCGT”) facility in Westlake, Louisiana. This Application, led in accordance with the

Louisiana Public Service Commission’s (“Commission”) General Order dated September 20,

1983 (the “1983 General Order”),2 requests certication that the public convenience and

necessity would be served by construction and deployment of LCPS. In addition to certication

under the 1983 General Order, the Company respectfully requests, among other relief, a nding

that the Project complies with the Commission’s Market-Based Mechanisms General Order

(“MBM Order”),3 ndings relating to appropriate cost recovery, and the development of a

ELL is a limited liability company duly authorized and qualied to do and doing business in the State of

Louisiana, created and organized for the purposes, among others, of manufacturing, generating, transmitting, distributing, and selling electricity for power, lighting, heating, and other such uses. ELL also engages in the local

distribution of natural gas to residential, commercial, municipal, and other customers in East Baton Rouge Parish.

2

LPSC General Order dated September 20, 1983 (In re: In the Matter of the Expansion of Utility Power

Plant; Proposed Certification of New Plant by the LPSC), as amended by General Order (Corrected) in Docket No.

R-305 I 7 (In re: Possible modifications to the September 20, I983 General Order to allow (1) for more expeditious certifications of limited—term resource procurements and (2) an exception for annual and seasonal liquidated damages block energy purchases) dated May 27, 2009.

3

General Order, Docket No. R-26172 Subdocket A, In re: Development of Market-Based Mechanisms to

Evaluate Proposals to Construct or Acquire Generating Capacity to Meeting Native Load, Supplements the

September 20, 1983 General Order, dated February 16, 2004 (as amended by General Order, Docket No. R-26172

BEFORE THE

zeta

LOUISIANA PUBLIC SERVICE COMMISSION

IN RE: APPLICATION OF ENTERGY

LOUISIANA, LLC FOR APPROVAL TO

CON STRUCT LAKE CHARLES POWER

STATION, AND FOR COST RECOVERY

DOCKET NO. U-

APPLICATION OF ENTERGY LOUISIANA, LLC

FOR APPROVAL TO CONSTRUCT THE

LAKE CHARLES POWER STATION, AND FOR COST RECOVERY

Entergy Louisiana, LLC (“ELL” or the “Company")' respectfully submits this

Application seeking approval and certication of construction of the Lake Charles Power Station

(the “Project” or “LCPS”), a nominally-sized 994-megawatt (“MW”) combined-cycle gas

turbine (“CCGT”) facility in Westlake, Louisiana. This Application, led in accordance with the

Louisiana Public Service Commission’s (“Commission”) General Order dated September 20,

1983 (the “1983 General Order”),2 requests certication that the public convenience and

necessity would be served by construction and deployment of LCPS. In addition to certication

under the 1983 General Order, the Company respectfully requests, among other relief, a nding

that the Project complies with the Commission’s Market-Based Mechanisms General Order

(“MBM Order”),3 ndings relating to appropriate cost recovery, and the development of a

ELL is a limited liability company duly authorized and qualied to do and doing business in the State of

Louisiana, created and organized for the purposes, among others, of manufacturing, generating, transmitting, distributing, and selling electricity for power, lighting, heating, and other such uses. ELL also engages in the local

distribution of natural gas to residential, commercial, municipal, and other customers in East Baton Rouge Parish.

2

LPSC General Order dated September 20, 1983 (In re: In the Matter of the Expansion of Utility Power

Plant; Proposed Certification of New Plant by the LPSC), as amended by General Order (Corrected) in Docket No.

R-305 I 7 (In re: Possible modifications to the September 20, I983 General Order to allow (1) for more expeditious certifications of limited—term resource procurements and (2) an exception for annual and seasonal liquidated damages block energy purchases) dated May 27, 2009.

3

General Order, Docket No. R-26172 Subdocket A, In re: Development of Market-Based Mechanisms to

Evaluate Proposals to Construct or Acquire Generating Capacity to Meeting Native Load, Supplements the

September 20, 1983 General Order, dated February 16, 2004 (as amended by General Order, Docket No. R-26172

schedule and procedures to permit this Application to be considered on a timely basis, as

follows:

INTRODUCTION

As discussed herein and in the accompanying testimony, the Company has a substantial

overall long-term need for base load and core load-following generation capacity.4 This need

persists notwithstanding the completion of the Ninemile 6 CCGT facility, the acquisition of

Union Power Station Power Blocks 3 and 4, and the anticipated construction of the proposed St.

Charles Power Station. As discussed below, without the future capacity additions reected in

ELL’s supply plan, the Company would have a projected capacity decit of over 2,400 MW in

2020. Assuming all of the other planned additions are made, without LCPS, ELL’s capacity

decit could nevertheless grow to more than 900 MW by 2020 and almost 1,900 MW by 2028.5

The Company’s need for signicant amounts of long-term capacity will continue to increase

throughout the next decade primarily due to load growth and unit deactivations.

Il.

ELL also needs base load and core load-following resources to satisfy a projected energy

deficiency, without which resources customers will be exposed to market energy prices without

the benet of offsetting energy margins that can be obtained by LCPS. Specically, without its

Subdocket B, dated November 3, 2006, and further amended by the April 26, 2007 General Order, and the

amendments approved by the Commission at its October I5, 2008 Business and Executive Meeting and now in

General Order, Docket No. R-26172, Subdocket C dated October 29, 2008).

4

Generating resources that employ CCGT technology, such as LCPS, are technologically and economically suited both for base load and load-following roles at current long-term forecasts for natural gas prices and carbon

dioxide (“CO2”) cost.

5

It follows that the Company’s capacity needs will be even greater if, for example, the St. Charles Power

Station is not constructed and placed in service in 2019.

schedule and procedures to permit this Application to be considered on a timely basis, as

follows:

INTRODUCTION

As discussed herein and in the accompanying testimony, the Company has a substantial

overall long-term need for base load and core load-following generation capacity.4 This need

persists notwithstanding the completion of the Ninemile 6 CCGT facility, the acquisition of

Union Power Station Power Blocks 3 and 4, and the anticipated construction of the proposed St.

Charles Power Station. As discussed below, without the future capacity additions reected in

ELL’s supply plan, the Company would have a projected capacity decit of over 2,400 MW in

2020. Assuming all of the other planned additions are made, without LCPS, ELL’s capacity

decit could nevertheless grow to more than 900 MW by 2020 and almost 1,900 MW by 2028.5

The Company’s need for signicant amounts of long-term capacity will continue to increase

throughout the next decade primarily due to load growth and unit deactivations.

Il.

ELL also needs base load and core load-following resources to satisfy a projected energy

deficiency, without which resources customers will be exposed to market energy prices without

the benet of offsetting energy margins that can be obtained by LCPS. Specically, without its

Subdocket B, dated November 3, 2006, and further amended by the April 26, 2007 General Order, and the

amendments approved by the Commission at its October I5, 2008 Business and Executive Meeting and now in

General Order, Docket No. R-26172, Subdocket C dated October 29, 2008).

4

Generating resources that employ CCGT technology, such as LCPS, are technologically and economically suited both for base load and load-following roles at current long-term forecasts for natural gas prices and carbon

dioxide (“CO2”) cost.

5

It follows that the Company’s capacity needs will be even greater if, for example, the St. Charles Power

Station is not constructed and placed in service in 2019.

supply plan additions, ELL projects that by 2020 it will have a need for approximately 2,500

MW of base load and core load-following generation. Based on its commercially-proven low

heat rate, LCPS is projected to operate at a high capacity factor, which means that the unit is

expected to produce a significant amount of energy margins to offset purchases from the

Midcontinent Independent System Operator, Inc. (“MISO”) market.

III.

Through this Application, the application in Docket No. U-33770 (St. Charles Power

Station), and other resource negotiations discussed below and in the accompanying testimony,

ELL is taking the necessary steps to implement its supply plan and satisfy its obligation to be

prepared to reliably and efficiently serve all load that materializes in its service area. LCPS is

the second of two large, developmental additions that the Company currently has planned to

bridge what otherwise would be a substantial resource deficit.

IV.

In addition to helping the Company meet its overall long-term need for capacity and

energy, LCPS would address specific supply conditions and planning objectives in the West of

the Atchafalaya Basin (“WOTAB”) planning region. WOTAB is a transmission planning area

generally west of the Baton Rouge, Louisiana metropolitan area, to the western-most portion of

Entergy Texas, Inc.’s (“ETI”) service territory.6 As discussed in the testimonies of several ELL

witnesses, new generation is needed in WOTAB to maintain reliability in the region as load

growth continues, the existing generation eet ages, and unit deactivations become more

probable and imminent. Furthermore, as noted in several proceedings at the Commission, a new

6 For the purposes ofthis docket, WOTAB will refer to Louisiana portion of the region, which runs roughly

from west of Baton Rouge, Louisiana, to the Texas state line and from just north of the Gulf of Mexico to the

northern edge of ELL’s service area in southwest Louisiana.

supply plan additions, ELL projects that by 2020 it will have a need for approximately 2,500

MW of base load and core load-following generation. Based on its commercially-proven low

heat rate, LCPS is projected to operate at a high capacity factor, which means that the unit is

expected to produce a significant amount of energy margins to offset purchases from the

Midcontinent Independent System Operator, Inc. (“MISO”) market.

III.

Through this Application, the application in Docket No. U-33770 (St. Charles Power

Station), and other resource negotiations discussed below and in the accompanying testimony,

ELL is taking the necessary steps to implement its supply plan and satisfy its obligation to be

prepared to reliably and efficiently serve all load that materializes in its service area. LCPS is

the second of two large, developmental additions that the Company currently has planned to

bridge what otherwise would be a substantial resource deficit.

IV.

In addition to helping the Company meet its overall long-term need for capacity and

energy, LCPS would address specific supply conditions and planning objectives in the West of

the Atchafalaya Basin (“WOTAB”) planning region. WOTAB is a transmission planning area

generally west of the Baton Rouge, Louisiana metropolitan area, to the western-most portion of

Entergy Texas, Inc.’s (“ETI”) service territory.6 As discussed in the testimonies of several ELL

witnesses, new generation is needed in WOTAB to maintain reliability in the region as load

growth continues, the existing generation eet ages, and unit deactivations become more

probable and imminent. Furthermore, as noted in several proceedings at the Commission, a new

6 For the purposes ofthis docket, WOTAB will refer to Louisiana portion of the region, which runs roughly

from west of Baton Rouge, Louisiana, to the Texas state line and from just north of the Gulf of Mexico to the

northern edge of ELL’s service area in southwest Louisiana.

CCGT in the Lake Charles area has for years been part of ELL’s Integrated Resource Plan for

meeting the planning needs and objectives of the WOTAB region. ELL’s most recent Integrated

Resource Plan, led in August 2015, was the product of a dynamic, ongoing process that

considers both generation and transmission options to meet customer needs. Indeed, if LCPS

were eliminated from ELL’s supply plan and not constructed, the Company would need to make

a considerable transmission investment in the near term in order to maintain reliability and North

American Electric Reliability Council (“NERC”) compliance in WOTAB. As explained below

and in the accompanying testimony, such a course of action would be a far less economic,

effective, and enduring means of meeting ELL’s obligations to reliably serve customers and

would not be in customers’ best interests.

V.

To address both its overall need for long-terrn capacity and energy, as well as the need

for local generation in WOTAB, on September 29, 2015, Entergy Services, Inc. (“ESI”),7 as

agent for ELL, issued a 2015 Request for Proposals (“RFP”) for Long-Term Developmental and

Existing Capacity and Energy Resources (the “2015 ELL RFP”). LCPS, a self-build proposal

developed by the Self-Build Commercial Team of ESI on ELL’s behalf, was submitted into and

market tested in the 2015 ELL RFP.8 LCPS and a PPA for capacity from an existing CCGT

facility (Proposal 8538) were competitively selected in the Commission- and independently-

monitored RFP process. The market test determined that LCPS provides the best economics of

all the proposals submitted in the 2015 ELL RFP under all sensitivities evaluated.

7

ES] is an affiliate of the Entergy Operating Companies (“EOCS”) and provides engineering, planning,

accounting, technical, and regulatory—support services to each of the EOCs. The five current EOCs are ELL,

Entergy Arkansas, lnc., Entergy Mississippi, lnc., Entergy New Orleans, Inc, and ETI.

8

As ELL witnesses Anthony Walz and Jonathan Long discuss in their testimonies, ESI established a detailed

process for segregating the personnel responsible for developing the LCPS self-build option from those responsible for the evaluation ofthe bids in the 2015 ELL RFP.

CCGT in the Lake Charles area has for years been part of ELL’s Integrated Resource Plan for

meeting the planning needs and objectives of the WOTAB region. ELL’s most recent Integrated

Resource Plan, led in August 2015, was the product of a dynamic, ongoing process that

considers both generation and transmission options to meet customer needs. Indeed, if LCPS

were eliminated from ELL’s supply plan and not constructed, the Company would need to make

a considerable transmission investment in the near term in order to maintain reliability and North

American Electric Reliability Council (“NERC”) compliance in WOTAB. As explained below

and in the accompanying testimony, such a course of action would be a far less economic,

effective, and enduring means of meeting ELL’s obligations to reliably serve customers and

would not be in customers’ best interests.

V.

To address both its overall need for long-terrn capacity and energy, as well as the need

for local generation in WOTAB, on September 29, 2015, Entergy Services, Inc. (“ESI”),7 as

agent for ELL, issued a 2015 Request for Proposals (“RFP”) for Long-Term Developmental and

Existing Capacity and Energy Resources (the “2015 ELL RFP”). LCPS, a self-build proposal

developed by the Self-Build Commercial Team of ESI on ELL’s behalf, was submitted into and

market tested in the 2015 ELL RFP.8 LCPS and a PPA for capacity from an existing CCGT

facility (Proposal 8538) were competitively selected in the Commission- and independently-

monitored RFP process. The market test determined that LCPS provides the best economics of

all the proposals submitted in the 2015 ELL RFP under all sensitivities evaluated.

7

ES] is an affiliate of the Entergy Operating Companies (“EOCS”) and provides engineering, planning,

accounting, technical, and regulatory—support services to each of the EOCs. The five current EOCs are ELL,

Entergy Arkansas, lnc., Entergy Mississippi, lnc., Entergy New Orleans, Inc, and ETI.

8

As ELL witnesses Anthony Walz and Jonathan Long discuss in their testimonies, ESI established a detailed

process for segregating the personnel responsible for developing the LCPS self-build option from those responsible for the evaluation ofthe bids in the 2015 ELL RFP.

VI.

As discussed by Messrs. Girard and Charles W. Long, development and deployment of

signicant generation and transmission projects is a time-consuming process that must begin

several years in advance of the need-by date. If the Company receives the approvals requested

from the Commission, and there are no unanticipated project delays related to the procurement of

all of the necessary permits, materials, and supplies, the Project is expected to enter service in

2020. Company witness Jonathan E. Long discusses the Project’s schedule in his testimony and

the importance of issuing a timely full notice to proceed to the Project’s principal contractor.

The Company, accordingly, is requesting that the Commission direct or establish a Procedural

Schedule that is consistent with the 120-day certication period set forth in the 1983 General

Order.

VII.

With this Application, the Company submits the Direct Testimonies of Phillip R. May,

Joshua B. Thomas, Jonathan E. Long, Paul J. Girard, Charles W. Long, John P. Hurstell, William

C. John, Anthony P. Walz, Phong D. Nguyen, and Charles E. DeGeorge. The purpose of the

testimony of each witness is as follows:

0 Phillip R. May — Mr. May, President and Chief Executive Ofcer (“CEO”) of

ELL, provides an overview of the Project and the Company’s capacity and energy

needs supporting the 2015 ELL RFP. Mr. May also describes the current status of

industrial load growth in Louisiana, particularly in the Lake Charles area of

WOTAB, and he discusses the basis for siting the Project at ELL’s Roy S. Nelson

facility near Lake Charles. Finally, he provides an overview of the Company’s

VI.

As discussed by Messrs. Girard and Charles W. Long, development and deployment of

signicant generation and transmission projects is a time-consuming process that must begin

several years in advance of the need-by date. If the Company receives the approvals requested

from the Commission, and there are no unanticipated project delays related to the procurement of

all of the necessary permits, materials, and supplies, the Project is expected to enter service in

2020. Company witness Jonathan E. Long discusses the Project’s schedule in his testimony and

the importance of issuing a timely full notice to proceed to the Project’s principal contractor.

The Company, accordingly, is requesting that the Commission direct or establish a Procedural

Schedule that is consistent with the 120-day certication period set forth in the 1983 General

Order.

VII.

With this Application, the Company submits the Direct Testimonies of Phillip R. May,

Joshua B. Thomas, Jonathan E. Long, Paul J. Girard, Charles W. Long, John P. Hurstell, William

C. John, Anthony P. Walz, Phong D. Nguyen, and Charles E. DeGeorge. The purpose of the

testimony of each witness is as follows:

0 Phillip R. May — Mr. May, President and Chief Executive Ofcer (“CEO”) of

ELL, provides an overview of the Project and the Company’s capacity and energy

needs supporting the 2015 ELL RFP. Mr. May also describes the current status of

industrial load growth in Louisiana, particularly in the Lake Charles area of

WOTAB, and he discusses the basis for siting the Project at ELL’s Roy S. Nelson

facility near Lake Charles. Finally, he provides an overview of the Company’s

Application and introduces the testimony of the other witnesses supporting the

Application.

@_1 ~ Mr. Thomas is the Director, Regulatory Policy for ESI. Mr.

Thomas discusses the regulatory and ratemaking issues that will need to be

resolved in order for the Company to initiate and successfully complete the

Project at the lowest reasonable cost to customers. Specically, he sets forth the

regulatory approvals required by the Company; discusses the Company’s

compliance with applicable Commission General Orders and explains why

approval of LCPS is in the public interest; and discusses the proposed plan by

which the Staff can monitor the progress of the construction of LCPS. Mr.

Thomas also provides the estimated first-year revenue requirement associated

with the Project; describes the proposal to recover, through the fuel adjustment

clause (“FAC”), the variable costs associated with the Long-Term Service

Agreement (“LTSA”) that ELL is expected to enter into in connection with

certain major maintenance activities for LCPS; and explains the proposed rate

recovery plan and the importance of timely recovery with respect to costs related

to LCPS.

Jonathan E. Long — Mr. J Long is the Vice President, Project Management for

ESI. He provides an overview of the Project, explains how the cost estimates

associated with the Project were developed, and provides the current total cost

estimate and schedule associated with the Project. He also describes the process

used to select the engineering, procurement, and construction (“EPC”) contractor

for the Project and the management approach that the Company intends to employ

Application and introduces the testimony of the other witnesses supporting the

Application.

@_1 ~ Mr. Thomas is the Director, Regulatory Policy for ESI. Mr.

Thomas discusses the regulatory and ratemaking issues that will need to be

resolved in order for the Company to initiate and successfully complete the

Project at the lowest reasonable cost to customers. Specically, he sets forth the

regulatory approvals required by the Company; discusses the Company’s

compliance with applicable Commission General Orders and explains why

approval of LCPS is in the public interest; and discusses the proposed plan by

which the Staff can monitor the progress of the construction of LCPS. Mr.

Thomas also provides the estimated first-year revenue requirement associated

with the Project; describes the proposal to recover, through the fuel adjustment

clause (“FAC”), the variable costs associated with the Long-Term Service

Agreement (“LTSA”) that ELL is expected to enter into in connection with

certain major maintenance activities for LCPS; and explains the proposed rate

recovery plan and the importance of timely recovery with respect to costs related

to LCPS.

Jonathan E. Long — Mr. J Long is the Vice President, Project Management for

ESI. He provides an overview of the Project, explains how the cost estimates

associated with the Project were developed, and provides the current total cost

estimate and schedule associated with the Project. He also describes the process

used to select the engineering, procurement, and construction (“EPC”) contractor

for the Project and the management approach that the Company intends to employ

through completion of the Project. In addition, Mr. J. Long discusses the risk

mitigation measures put in place to manage Project risk as well as the status of the

required permits/approvals for the Project. Finally, he discusses the estimated

non-fuel operations and maintenance (“O&M”) costs for the Project.

Paul J. Girard, III — Mr. Girard is the Director, Resource Planning and Market

Operations for ELL. He testies about the Company’s current plans to meet the

long-term supply needs of its customers, anticipated load growth in the Lake

Charles Area, the Company’s current resource portfolio and identied needs, and

the long-term planning objectives that will be served by constructing a new

generating resource near Lake Charles.

Charles W. Long — Mr. C. Long is the Director, Transmission Planning for ESI.

His testimony discusses the transmission planning process of both the Company

and MISO and describes the unique geographical and transmission—related

characteristics of the WOTAB region. He then identies the transmission

reliability benets that will be realized because of LCPS, specically, benets

gained from its location in the WOTAB region. Mr. C. Long then discusses the

process used to identify transmission upgrades that will be necessary for the

integration of LCPS into the electric grid. Finally, he discusses transmission

projects that will be required to maintain the reliability of the system if LCPS is

not constructed, as well as projects that can be avoided or obviated by

constructing the LCPS Project within the proposed timeframe.

John P. Hurstell — Mr. Hurstell is the Vice President, System Planning for ESI.

Mr. Hurstell describes the Company’s unit deactivation assumptions and the

through completion of the Project. In addition, Mr. J. Long discusses the risk

mitigation measures put in place to manage Project risk as well as the status of the

required permits/approvals for the Project. Finally, he discusses the estimated

non-fuel operations and maintenance (“O&M”) costs for the Project.

Paul J. Girard, III — Mr. Girard is the Director, Resource Planning and Market

Operations for ELL. He testies about the Company’s current plans to meet the

long-term supply needs of its customers, anticipated load growth in the Lake

Charles Area, the Company’s current resource portfolio and identied needs, and

the long-term planning objectives that will be served by constructing a new

generating resource near Lake Charles.

Charles W. Long — Mr. C. Long is the Director, Transmission Planning for ESI.

His testimony discusses the transmission planning process of both the Company

and MISO and describes the unique geographical and transmission—related

characteristics of the WOTAB region. He then identies the transmission

reliability benets that will be realized because of LCPS, specically, benets

gained from its location in the WOTAB region. Mr. C. Long then discusses the

process used to identify transmission upgrades that will be necessary for the

integration of LCPS into the electric grid. Finally, he discusses transmission

projects that will be required to maintain the reliability of the system if LCPS is

not constructed, as well as projects that can be avoided or obviated by

constructing the LCPS Project within the proposed timeframe.

John P. Hurstell — Mr. Hurstell is the Vice President, System Planning for ESI.

Mr. Hurstell describes the Company’s unit deactivation assumptions and the

processes undertaken to develop deactivation assumptions and change a

generating unit’s status, as well as the specific analyses undertaken that support

recent determinations that deactivation of Willow Glen Units 2 and 4 and

Sterlington Unit 7B is the lower cost option for customers. Finally, he discusses

the risk of relying on the MISO market to meet the Company’s long-term

resource needs.

William C. John — Mr. John is the Manager of Sales and Load Forecasting for

ESI. His testimony addresses the process used to develop ELL’s load forecasts

and presents ELL’s three most recent load forecasts, beginning with the forecast

used in the evaluation of proposals in the 2015 ELL RFP.

Anthony P. Walz — Mr. Walz is employed by ESI as the Director, Planning

Analysis for System Planning and Operations (“SPO”). Mr. Walz provides an

overview of ELL’s long-term resource planning process and describes the 2015

ELL RF P, the process through which resources designed to meet ELL’s identied

resource needs were competitively solicited and the self-build option represented

by the Project market-tested. He also summarizes the results of the 2015 ELL

RFP, addressing the criteria used to evaluate the projects bid into the RFP and the

rationale for the selection of the Project and the contingent selection of Proposal

8538.

Phong D. Nguyen — Mr. Nguyen is employed by ESI as the Manager, Financial

Analysis for SP0. Mr. Nguyen describes the economic evaluation of the

proposals evaluated in the 2015 ELL RFP.

Charles E. DeGe0rge — Mr. DeGeorge is employed by ESI as the Manager,

processes undertaken to develop deactivation assumptions and change a

generating unit’s status, as well as the specific analyses undertaken that support

recent determinations that deactivation of Willow Glen Units 2 and 4 and

Sterlington Unit 7B is the lower cost option for customers. Finally, he discusses

the risk of relying on the MISO market to meet the Company’s long-term

resource needs.

William C. John — Mr. John is the Manager of Sales and Load Forecasting for

ESI. His testimony addresses the process used to develop ELL’s load forecasts

and presents ELL’s three most recent load forecasts, beginning with the forecast

used in the evaluation of proposals in the 2015 ELL RFP.

Anthony P. Walz — Mr. Walz is employed by ESI as the Director, Planning

Analysis for System Planning and Operations (“SPO”). Mr. Walz provides an

overview of ELL’s long-term resource planning process and describes the 2015

ELL RF P, the process through which resources designed to meet ELL’s identied

resource needs were competitively solicited and the self-build option represented

by the Project market-tested. He also summarizes the results of the 2015 ELL

RFP, addressing the criteria used to evaluate the projects bid into the RFP and the

rationale for the selection of the Project and the contingent selection of Proposal

8538.

Phong D. Nguyen — Mr. Nguyen is employed by ESI as the Manager, Financial

Analysis for SP0. Mr. Nguyen describes the economic evaluation of the

proposals evaluated in the 2015 ELL RFP.

Charles E. DeGe0rge — Mr. DeGeorge is employed by ESI as the Manager,

Generation Planning and Models for SP0. Mr. DeGeorge addresses the

Production Cost Assessment sub-team’s use of the AURORAxmp Electric Market

Model (“AURORA”) production cost model to assess the variable supply cost

effect of each proposal evaluated in the 2015 ELL RFP. He describes the

AURORA model, the input assumptions used to assess the RFP proposals, and

benchmarking conducted to confirm the AURORA model is appropriately

simulating the operation of the MISO market. Finally, Mr. DeGeorge describes

the AURORA modeling methodology and results for the proposals evaluated in

the 2015 ELL RFP.

As required by the 1983 General Order, this Application and the supporting testimony

include the specic data that the Company relied upon to justify the Company’s decision to

construct LCPS, an estimate of the costs to construct LCPS, ELL’s estimated rst-year revenue

requirement associated with LCPS, the estimated in-service date, and the construction schedule

and milestones.

OVERVIEW OF RESOURCE

VIII.

As described in more detail by Mr. J. Long in his Direct Testimony, the Company

proposes to construct LCPS in Westlake, Louisiana. LCPS is a CCGT resource with a nominal

capacity of 994 MW and a projected summer rating of 924 MW. The Project is designed with

two Mitsubishi Hitachi Power Systems (“MHPS”) 501 GAC combustion turbines (“CTS”), two

Nooter Eriksen heat recovery steam generators (“HRSGS”) with duct ring, one Toshiba steam

turbine generator in a 2x1 CCGT configuration, and other balance of plant equipment, including

a cooling tower for closed-cycle cooling operations.

Generation Planning and Models for SP0. Mr. DeGeorge addresses the

Production Cost Assessment sub-team’s use of the AURORAxmp Electric Market

Model (“AURORA”) production cost model to assess the variable supply cost

effect of each proposal evaluated in the 2015 ELL RFP. He describes the

AURORA model, the input assumptions used to assess the RFP proposals, and

benchmarking conducted to confirm the AURORA model is appropriately

simulating the operation of the MISO market. Finally, Mr. DeGeorge describes

the AURORA modeling methodology and results for the proposals evaluated in

the 2015 ELL RFP.

As required by the 1983 General Order, this Application and the supporting testimony

include the specic data that the Company relied upon to justify the Company’s decision to

construct LCPS, an estimate of the costs to construct LCPS, ELL’s estimated rst-year revenue

requirement associated with LCPS, the estimated in-service date, and the construction schedule

and milestones.

OVERVIEW OF RESOURCE

VIII.

As described in more detail by Mr. J. Long in his Direct Testimony, the Company

proposes to construct LCPS in Westlake, Louisiana. LCPS is a CCGT resource with a nominal

capacity of 994 MW and a projected summer rating of 924 MW. The Project is designed with

two Mitsubishi Hitachi Power Systems (“MHPS”) 501 GAC combustion turbines (“CTS”), two

Nooter Eriksen heat recovery steam generators (“HRSGS”) with duct ring, one Toshiba steam

turbine generator in a 2x1 CCGT configuration, and other balance of plant equipment, including

a cooling tower for closed-cycle cooling operations.

IX.

The current estimated cost to construct LCPS is $871.7 million, which reects the use of

a xed-price, xed-duration form of EPC contract, subject to certain dened possible

adjustments. The EPC contract accounts for a signicant portion of the overall estimated cost of

the Project. Other components included in the overall Project cost estimate are an allowance for

funds used during construction (“AFUDC”), transmission interconnection to the switchyard,

estimates for Network Resource Interconnection Service (“NRIS”) projects, project contingency,

internal construction management, indirect loaders, insurance coverage, expenses related to

seeking Commission certication, and other non—EPC costs.

X.

The estimated costs of operating and maintaining LCPS are detailed in the Direct

Testimony of Mr. Jonathan Long, and these costs are reected in the estimated rst-year revenue

requirement set forth in the Direct Testimony of Mr. Thomas.

XI.

As discussed in the Direct Testimony of Mr. Walz, although construction of LCPS will

require a signicant upfront investment, the resource is expected to produce net supply cost

savings for customers in excess of $1.96 billion (on a net present value basis) during the

expected life of the plant. These net supply cost savings are expected to exceed the construction

cost of the Project in less than ten years.

FACILITY DESCRIPTION

XII.

The proposed Project site is in Westlake, Louisiana, near ELL’s existing Nelson units.

As Mr. May discusses in his Direct Testimony, the Nelson site was chosen after multiple sites

10

IX.

The current estimated cost to construct LCPS is $871.7 million, which reects the use of

a xed-price, xed-duration form of EPC contract, subject to certain dened possible

adjustments. The EPC contract accounts for a signicant portion of the overall estimated cost of

the Project. Other components included in the overall Project cost estimate are an allowance for

funds used during construction (“AFUDC”), transmission interconnection to the switchyard,

estimates for Network Resource Interconnection Service (“NRIS”) projects, project contingency,

internal construction management, indirect loaders, insurance coverage, expenses related to

seeking Commission certication, and other non—EPC costs.

X.

The estimated costs of operating and maintaining LCPS are detailed in the Direct

Testimony of Mr. Jonathan Long, and these costs are reected in the estimated rst-year revenue

requirement set forth in the Direct Testimony of Mr. Thomas.

XI.

As discussed in the Direct Testimony of Mr. Walz, although construction of LCPS will

require a signicant upfront investment, the resource is expected to produce net supply cost

savings for customers in excess of $1.96 billion (on a net present value basis) during the

expected life of the plant. These net supply cost savings are expected to exceed the construction

cost of the Project in less than ten years.

FACILITY DESCRIPTION

XII.

The proposed Project site is in Westlake, Louisiana, near ELL’s existing Nelson units.

As Mr. May discusses in his Direct Testimony, the Nelson site was chosen after multiple sites

10

were considered and evaluated based on a range of considerations related to reliability, cost, and

technical feasibility. LCPS is expected to utilize existing infrastructure and resources at the

Nelson site, including existing transmission and cooling water infrastructure. Generation from

the resource is expected to interconnect with the MISO System at a 138 kV, 230 kV, and/or a

500 kV transmission switchyard located at or near the Nelson site. Furthermore, the site is

located close to large load concentrations, which improves reliability and reduces losses.

XIII.

The Clean Air Act requires that the Company obtain an air quality permit from the

Louisiana Department of Environmental Quality (“LDEQ”) that encompasses all applicable

regulatory requirements. The air permit application for LCPS was submitted to the LDEQ on

October 27, 2016, and is pending approval. With respect to water quality, the existing Nelson

site currently operates under a valid Louisiana Pollution Discharge Elimination System

(“LPDES”) permit.

PROJECT EXECUTION AND MANAGEMENT

XIV.

As explained in the Direct Testimony of Mr. J. Long, the Company has chosen a single-

source EPC approach for the Project to ensure that the resources necessary to execute this

substantial undertaking are brought to bear in a timely and cost-effective manner. The Company

negotiated a xed-price,° fixed-schedule duration form of EPC contract with Chicago Bridge &

Iron (“CB&l”) that reects a detailed scope of work.

9

As Mr. Jonathan Long explains, although the EPC agreement with CB&I is a xed—price form of contract,

there are elements ofthe pricing that are not fixed.

11

were considered and evaluated based on a range of considerations related to reliability, cost, and

technical feasibility. LCPS is expected to utilize existing infrastructure and resources at the

Nelson site, including existing transmission and cooling water infrastructure. Generation from

the resource is expected to interconnect with the MISO System at a 138 kV, 230 kV, and/or a

500 kV transmission switchyard located at or near the Nelson site. Furthermore, the site is

located close to large load concentrations, which improves reliability and reduces losses.

XIII.

The Clean Air Act requires that the Company obtain an air quality permit from the

Louisiana Department of Environmental Quality (“LDEQ”) that encompasses all applicable

regulatory requirements. The air permit application for LCPS was submitted to the LDEQ on

October 27, 2016, and is pending approval. With respect to water quality, the existing Nelson

site currently operates under a valid Louisiana Pollution Discharge Elimination System

(“LPDES”) permit.

PROJECT EXECUTION AND MANAGEMENT

XIV.

As explained in the Direct Testimony of Mr. J. Long, the Company has chosen a single-

source EPC approach for the Project to ensure that the resources necessary to execute this

substantial undertaking are brought to bear in a timely and cost-effective manner. The Company

negotiated a xed-price,° fixed-schedule duration form of EPC contract with Chicago Bridge &

Iron (“CB&l”) that reects a detailed scope of work.

9

As Mr. Jonathan Long explains, although the EPC agreement with CB&I is a xed—price form of contract,

there are elements ofthe pricing that are not fixed.

11

XV.

Under the xed-price, xed-schedule duration EPC contract structure, CB&I will act as

an independent contractor with respect to the EPC services dened in the contract’s scope of

work. CB&l also will procure the CTs, HRSGS, and steam turbine from the original equipment

manufacturers (“OEMS”). CB&I’s procurement of this equipment will allow it full coordination

and scheduling of the OEMs in order to meet the xed schedule provided in the contract.

XVI.

The Project will be managed and monitored by the Company through a Project Team, led

by a Project Director, with oversight from an Executive Steering Committee (“ESC”). The ESC

will provide oversight and strategic direction for the Project and will monitor and provide

direction relating to Project performance, key risks, and value drivers that may affect the Project

risk prole.

THE PLANNING PROCESS AND RESOURCE NEEDS

XVII.

In order to continue meeting the power needs of customers reliably at the lowest

reasonable cost, the Company must maintain a portfolio of generation resources that includes the

right amount and types of capacity. With respect to the amount of capacity, Mr. Walz explains

that the Company must maintain sufcient generating capacity to meet its peak load plus a

planning reserve margin. The Company plans long-terrn resources to a 12% reserve margin.

With respect to the type of capacity, the Company seeks to add modern, efcient generating

capacity, which will predominantly be CCGTs and CTs.

12

XV.

Under the xed-price, xed-schedule duration EPC contract structure, CB&I will act as

an independent contractor with respect to the EPC services dened in the contract’s scope of

work. CB&l also will procure the CTs, HRSGS, and steam turbine from the original equipment

manufacturers (“OEMS”). CB&I’s procurement of this equipment will allow it full coordination

and scheduling of the OEMs in order to meet the xed schedule provided in the contract.

XVI.

The Project will be managed and monitored by the Company through a Project Team, led

by a Project Director, with oversight from an Executive Steering Committee (“ESC”). The ESC

will provide oversight and strategic direction for the Project and will monitor and provide

direction relating to Project performance, key risks, and value drivers that may affect the Project

risk prole.

THE PLANNING PROCESS AND RESOURCE NEEDS

XVII.

In order to continue meeting the power needs of customers reliably at the lowest

reasonable cost, the Company must maintain a portfolio of generation resources that includes the

right amount and types of capacity. With respect to the amount of capacity, Mr. Walz explains

that the Company must maintain sufcient generating capacity to meet its peak load plus a

planning reserve margin. The Company plans long-terrn resources to a 12% reserve margin.

With respect to the type of capacity, the Company seeks to add modern, efcient generating

capacity, which will predominantly be CCGTs and CTs.

12

XVIII.

Even after the completion of the Ninemile 6 CCGT facility, the acquisition of Union

Power Station Power Blocks 3 and 4, and construction of the proposed St. Charles Power

Station, the Company will continue to have a need for additional long-terrn capacity. To

illustrate the extent of the Company’s need, ELL witness Mr. Girard has compared the

Company’s projected overall planning requirements (based on peak load plus planning reserve

margin) with the generating resources and long-tenn contracted resources that it expects to have

in its portfolio. That analysis shows that, without the capacity additions reflected in ELL’s

supply plan, the Company would have a projected capacity deficit of 2,406 MW in 2020. Even

if all of the other planned additions were made, without LCPS, ELL would have an overall

capacity decit of 903 MW in 2020 and growing to 1,880 MW by 2028. Without any of the

planned additions (including St. Charles Power Station), the overall capacity deficit would grow

to nearly 3,750 MW by 2028.

XIX.

Over the same time frame, MISO market conditions are expected to tighten. SPO’s

current planning assumption is that market equilibrium in MISO South (where supply, including

third-party resources, and demand balance) will occur around 2022, though MISO and its

independent market monitor have predicted that equilibrium may be reached as soon as 2018

across all MISO areas. As equilibrium approaches, the addition of new-build resources will be

necessary to maintain market balance as load grows and/or resources deactivate. In addition,

LCPS is projected to provide significant economic benets by providing a modern, efcient

generating unit that is expected to operate at a high capacity factor. As a result, as noted above,

LCPS will generate significant energy margins that will offset the cost to ELL customers of

13

XVIII.

Even after the completion of the Ninemile 6 CCGT facility, the acquisition of Union

Power Station Power Blocks 3 and 4, and construction of the proposed St. Charles Power

Station, the Company will continue to have a need for additional long-terrn capacity. To

illustrate the extent of the Company’s need, ELL witness Mr. Girard has compared the

Company’s projected overall planning requirements (based on peak load plus planning reserve

margin) with the generating resources and long-tenn contracted resources that it expects to have

in its portfolio. That analysis shows that, without the capacity additions reflected in ELL’s

supply plan, the Company would have a projected capacity deficit of 2,406 MW in 2020. Even

if all of the other planned additions were made, without LCPS, ELL would have an overall

capacity decit of 903 MW in 2020 and growing to 1,880 MW by 2028. Without any of the

planned additions (including St. Charles Power Station), the overall capacity deficit would grow

to nearly 3,750 MW by 2028.

XIX.

Over the same time frame, MISO market conditions are expected to tighten. SPO’s

current planning assumption is that market equilibrium in MISO South (where supply, including

third-party resources, and demand balance) will occur around 2022, though MISO and its

independent market monitor have predicted that equilibrium may be reached as soon as 2018

across all MISO areas. As equilibrium approaches, the addition of new-build resources will be

necessary to maintain market balance as load grows and/or resources deactivate. In addition,

LCPS is projected to provide significant economic benets by providing a modern, efcient

generating unit that is expected to operate at a high capacity factor. As a result, as noted above,

LCPS will generate significant energy margins that will offset the cost to ELL customers of

13

purchasing energy in the MISO market. Moreover, as discussed above, LCPS is an important

component of ELL’s plan for maintaining reliability in the WOTAB area.

2015 ELL RFP

XX.

As Mr. Walz discusses in his Direct Testimony, based on the Company’s forecasted long-

term need for capacity and energy and area planning objectives in WOTAB, ESI issued the 2015

ELL RFP on September 29, 2015, which sought up to 1,000 MW of capacity, capacity-related

benets, energy, other electric products, and environmental attributes (if any) from any

developmental single integrated generation resource located in WOTAB and/or existing

resources in the MISO South footprint.

XXI.

A number of processes were established in order to ensure that the 2015 ELL RFP was

conducted in a fair and impartial manner, including oversight from an Independent Monitor

(“IM”). The IM’s role was to monitor the design and implementation of the solicitation,

evaluation, and selection to ensure impartiality and objectivity. The IM also provided an

objective, third-party perspective on ESI’s efforts to ensure that all bids proposed in the 2015

ELL RFP were treated consistently and without undue preference to any bidder. Messrs. Walz

and Nguyen describe the numerous safeguards put in place to ensure that the 2015 ELL RFP was

conducted in a fair and impartial manner and that condential information was not improperly

disclosed to or used by any employee, consultant, or other representative of ESI or any other

Entergy competitive afliate.

14

purchasing energy in the MISO market. Moreover, as discussed above, LCPS is an important

component of ELL’s plan for maintaining reliability in the WOTAB area.

2015 ELL RFP

XX.

As Mr. Walz discusses in his Direct Testimony, based on the Company’s forecasted long-

term need for capacity and energy and area planning objectives in WOTAB, ESI issued the 2015

ELL RFP on September 29, 2015, which sought up to 1,000 MW of capacity, capacity-related

benets, energy, other electric products, and environmental attributes (if any) from any

developmental single integrated generation resource located in WOTAB and/or existing

resources in the MISO South footprint.

XXI.

A number of processes were established in order to ensure that the 2015 ELL RFP was

conducted in a fair and impartial manner, including oversight from an Independent Monitor

(“IM”). The IM’s role was to monitor the design and implementation of the solicitation,

evaluation, and selection to ensure impartiality and objectivity. The IM also provided an

objective, third-party perspective on ESI’s efforts to ensure that all bids proposed in the 2015

ELL RFP were treated consistently and without undue preference to any bidder. Messrs. Walz

and Nguyen describe the numerous safeguards put in place to ensure that the 2015 ELL RFP was

conducted in a fair and impartial manner and that condential information was not improperly

disclosed to or used by any employee, consultant, or other representative of ESI or any other

Entergy competitive afliate.

14

XXII.

As part of ESI’s effort to ensure the 2015 ELL RFP was conducted in a fair and impartial

manner, separate teams were created to evaluate proposals, including the Viability Assessment

Team, the Deliverability Assessment Team, the Economic Evaluation Team, the Accounting

Evaluation Team, and the Credit Evaluation Team. Mr. Walz discusses the role of each team in

his Direct Testimony. As Mr. Walz also explains, based on the results of the RFP evaluation

process, the LCPS self-build option was identified as the alternative that best satises all of the

RF P objectives at the lowest reasonable cost alternative considering risk. As Mr. Nguyen further

explains, out of the proposals submitted in response to the 2015 ELL RFP, LCPS provided by far

the best overall economics across numerous metrics and sensitivities.

TRANSMISSION

XXIII.

As Mr. C. Long explains in his Direct Testimony, WOTAB is a load constrained region

due to concentrated loads and geographic features that limit transmission imports, which means

that loads must be served, at least in part, by local generation. Locating a large and efficient

generator in WOTAB would support reliability by making the region less dependent on

importing power to serve load and enhancing the reactive power capability of the region. Mr. C.

Long describes the transmission projects required to deploy and operate LCPS. He also explains

that LCPS is a crucial component of ELL’s long-terrn integrated generation and transmission

resource planning and plays a significant role in maintaining reliability in the WOTAB region.

In illustrating this point, Mr. C. Long describes the considerable and immediate transmission

investment that would need to be made if LCPS is not constructed in order to maintain regional

reliability and compliance with NERC standards.

15

XXII.

As part of ESI’s effort to ensure the 2015 ELL RFP was conducted in a fair and impartial

manner, separate teams were created to evaluate proposals, including the Viability Assessment

Team, the Deliverability Assessment Team, the Economic Evaluation Team, the Accounting

Evaluation Team, and the Credit Evaluation Team. Mr. Walz discusses the role of each team in

his Direct Testimony. As Mr. Walz also explains, based on the results of the RFP evaluation

process, the LCPS self-build option was identified as the alternative that best satises all of the

RF P objectives at the lowest reasonable cost alternative considering risk. As Mr. Nguyen further

explains, out of the proposals submitted in response to the 2015 ELL RFP, LCPS provided by far

the best overall economics across numerous metrics and sensitivities.

TRANSMISSION

XXIII.

As Mr. C. Long explains in his Direct Testimony, WOTAB is a load constrained region

due to concentrated loads and geographic features that limit transmission imports, which means

that loads must be served, at least in part, by local generation. Locating a large and efficient

generator in WOTAB would support reliability by making the region less dependent on

importing power to serve load and enhancing the reactive power capability of the region. Mr. C.

Long describes the transmission projects required to deploy and operate LCPS. He also explains

that LCPS is a crucial component of ELL’s long-terrn integrated generation and transmission

resource planning and plays a significant role in maintaining reliability in the WOTAB region.

In illustrating this point, Mr. C. Long describes the considerable and immediate transmission

investment that would need to be made if LCPS is not constructed in order to maintain regional

reliability and compliance with NERC standards.

15

COMPLIANCE WITH APPLICABLE COMMISSION RULES AND ORDERS

XXIV.

For the reasons discussed previously and in detail in the accompanying testimony, LCPS

serves the public convenience and necessity, is in the public interest, and is therefore prudent,

and should be certied in accordance with the Commission’s 1983 General Order. As discussed

above, the Project will add modern, efcient CCGT capacity to the Company’ generating

resource portfolio that can be used in either a load—following or base load role as necessary or

appropriate, and will contribute to meeting the Company’s long-term supply needs. Moreover,

LCPS will support system reliability by adding necessary capacity within the load constrained

WOTAB region at a cost that is favorable when compared to other available market

opportunities.

XXV.

In addition, as discussed by Mr. Walz, the RFP process was designed to be consistent

with the requirements of the MBM Order, including providing the opportunity for Commission

Staff review and involvement as contemplated by the MBM Order. Specically, Mr. Walz

explains that ESI conducted the 2015 ELL RFP in accordance with the process outlined in that

Order, including:

o posting the draft RFP for comment by market participants and Commission Staff and

obtaining and responding to such comments;

0 conducting a Bidders’ Conference to present the draft 2015 ELL RFP and respond to

questions from market participants;

0 participating in a Technical Conference;

16

COMPLIANCE WITH APPLICABLE COMMISSION RULES AND ORDERS

XXIV.

For the reasons discussed previously and in detail in the accompanying testimony, LCPS

serves the public convenience and necessity, is in the public interest, and is therefore prudent,

and should be certied in accordance with the Commission’s 1983 General Order. As discussed

above, the Project will add modern, efcient CCGT capacity to the Company’ generating

resource portfolio that can be used in either a load—following or base load role as necessary or

appropriate, and will contribute to meeting the Company’s long-term supply needs. Moreover,

LCPS will support system reliability by adding necessary capacity within the load constrained

WOTAB region at a cost that is favorable when compared to other available market

opportunities.

XXV.

In addition, as discussed by Mr. Walz, the RFP process was designed to be consistent

with the requirements of the MBM Order, including providing the opportunity for Commission

Staff review and involvement as contemplated by the MBM Order. Specically, Mr. Walz

explains that ESI conducted the 2015 ELL RFP in accordance with the process outlined in that

Order, including:

o posting the draft RFP for comment by market participants and Commission Staff and

obtaining and responding to such comments;

0 conducting a Bidders’ Conference to present the draft 2015 ELL RFP and respond to

questions from market participants;

0 participating in a Technical Conference;

16

0 identifying clearly the resource needs and the capacity products for which proposals were

sought to meet those needs;

0 engaging the services of an IM to oversee the design and conduct of the RFP and

ensuring that the IM had full access to all 2015 ELL RFP processes and evaluations and

the opportunity to provide comment and direction regarding those matters; and

0 designing processes appropriately to safeguard condential information, including (1)

confining the dissemination of information to only those persons engaged in the 2015

ELL RFP process and in accordance with practices approved by the IM, and (2)

conducting the 2015 ELL RF P in a manner that was fair and impartial to all bidders and

resulted in selection of the lowest reasonable cost resource that could meet the supply

needs of customers targeted in the 2015 ELL RFP.

Also, as required by the MBM Order, ESI kept the Commission Staff informed of and involved

in the development and implementation of the RFP and all resource selections.

REGULATORY APPROVAL PLAN

XXVI.

As discussed by Mr. J. Long in his Direct Testimony, ELL is negotiating an LTSA for the

maintenance of the LCPS CTs with the OEM. The LTSA is expected to have a structure and

scope similar to other LTSAs recently entered into by ELL or its afliates, providing for a

defined scope of major maintenance activities. As explained by Mr. Thomas in his Direct

Testimony, the costs for major maintenance services included on the base scope of work of the

LTSA are expected to be variable costs that depend on the number of unit starts and hours of

run-time. Therefore, the Company proposes that these variable costs be recovered through the

17

0 identifying clearly the resource needs and the capacity products for which proposals were

sought to meet those needs;

0 engaging the services of an IM to oversee the design and conduct of the RFP and

ensuring that the IM had full access to all 2015 ELL RFP processes and evaluations and

the opportunity to provide comment and direction regarding those matters; and

0 designing processes appropriately to safeguard condential information, including (1)

confining the dissemination of information to only those persons engaged in the 2015

ELL RFP process and in accordance with practices approved by the IM, and (2)

conducting the 2015 ELL RF P in a manner that was fair and impartial to all bidders and

resulted in selection of the lowest reasonable cost resource that could meet the supply

needs of customers targeted in the 2015 ELL RFP.

Also, as required by the MBM Order, ESI kept the Commission Staff informed of and involved

in the development and implementation of the RFP and all resource selections.

REGULATORY APPROVAL PLAN

XXVI.

As discussed by Mr. J. Long in his Direct Testimony, ELL is negotiating an LTSA for the

maintenance of the LCPS CTs with the OEM. The LTSA is expected to have a structure and

scope similar to other LTSAs recently entered into by ELL or its afliates, providing for a

defined scope of major maintenance activities. As explained by Mr. Thomas in his Direct

Testimony, the costs for major maintenance services included on the base scope of work of the

LTSA are expected to be variable costs that depend on the number of unit starts and hours of

run-time. Therefore, the Company proposes that these variable costs be recovered through the

17

FAC, as the Commission has previously authorized for ELL’s Ninemile 6 CCGT,l0 as well as

several other facilities, including Perryville, Acadia Power Block 2, Ouachita Unit 3, Calcasieu,

and Union Power Station Units 3 and 4.“

XXVII.

As detailed in the Direct Testimony of Mr. Thomas, the Company proposes a one-step

regulatory approval process whereby the Commission would issue a decision, supported by the

evidence and sound regulatory principles, that the construction of the Project is in the public

interest and therefore prudent. As part of this decision, the Commission would approve an In-

Service Rate Recovery Plan, approve a Monitoring Plan whereby the Company would make

periodic progress reports to Staff during the construction phase, and make appropriate findings

that will reasonably ensure that the Company will be permitted to recover the prudently-incurred

costs associated with LCPS.

XXVIII.

As part of the Regulatory Approval Plan, the Company is requesting an In-Service Rate

Recovery Plan that will permit the timely inclusion of the LCPS costs in rates. As discussed in

the Direct Testimony of Mr. Thomas, the plan assumes, rst, that ELL will have a Formula Rate

Plan (“FRP”) in place, which requires an annual ling as occurs currently for ELL. Given that,

the Company proposes that 12 months prior to the expected in-service date, ELL will make a

compliance submission in this docket providing the then-best estimate of LCPS’s rst-year

revenue requirement and supporting data (“Revenue Requirement Submission”). The parties to

'°

See LPSC Order No. (1-3 1971, April 5, 2012.

"

LPSC Order No. U-27836, May 3, 2005 (Perryville); LPSC Order No. U-30422-A, October 31, 2009

(Ouachita); LPSC Order No. U—3l196-C, February 9, 2011 (Acadia); LPSC Order No. U-32759-A, November 21,

2013 (Ca1casieu); LPSC Order No. U-33510, November 5,2015 (Union).

18

FAC, as the Commission has previously authorized for ELL’s Ninemile 6 CCGT,l0 as well as

several other facilities, including Perryville, Acadia Power Block 2, Ouachita Unit 3, Calcasieu,

and Union Power Station Units 3 and 4.“

XXVII.

As detailed in the Direct Testimony of Mr. Thomas, the Company proposes a one-step

regulatory approval process whereby the Commission would issue a decision, supported by the

evidence and sound regulatory principles, that the construction of the Project is in the public

interest and therefore prudent. As part of this decision, the Commission would approve an In-

Service Rate Recovery Plan, approve a Monitoring Plan whereby the Company would make

periodic progress reports to Staff during the construction phase, and make appropriate findings

that will reasonably ensure that the Company will be permitted to recover the prudently-incurred

costs associated with LCPS.

XXVIII.

As part of the Regulatory Approval Plan, the Company is requesting an In-Service Rate

Recovery Plan that will permit the timely inclusion of the LCPS costs in rates. As discussed in

the Direct Testimony of Mr. Thomas, the plan assumes, rst, that ELL will have a Formula Rate

Plan (“FRP”) in place, which requires an annual ling as occurs currently for ELL. Given that,

the Company proposes that 12 months prior to the expected in-service date, ELL will make a

compliance submission in this docket providing the then-best estimate of LCPS’s rst-year

revenue requirement and supporting data (“Revenue Requirement Submission”). The parties to

'°

See LPSC Order No. (1-3 1971, April 5, 2012.

"

LPSC Order No. U-27836, May 3, 2005 (Perryville); LPSC Order No. U-30422-A, October 31, 2009

(Ouachita); LPSC Order No. U—3l196-C, February 9, 2011 (Acadia); LPSC Order No. U-32759-A, November 21,

2013 (Ca1casieu); LPSC Order No. U-33510, November 5,2015 (Union).

18

this docket would have an opportunity to request information regarding the revenue requirement

calculation and to propose corrections. An additional update to the estimated first-year revenue

requirement would be submitted in this docket 60 days prior to the expected in-service date

(“Final Estimate Update”) and, again, the parties would have an opportunity to request

information regarding the revenue requirement calculation and to propose corrections. Absent

proposed adjustments, the Final Estimate Update would serve as the basis for the amount that is

included in rates the first billing cycle following the unit’s placement in service. In the event

adjustments to the Final Estimate Update are proposed, any adjustments agreed upon by ELL

would be reflected in the rates that are implemented with the rst billing cycle following

placement of the Project in service. To the extent there are unresolved issues regarding a

proposed adjustment, the revenue requirement included in the Final Estimate Update would be

implemented, subject to refund, and resolution would take place in the subsequent FRP in

accordance with the dispute resolution process provided for therein. Any changes to the revenue

requirement that result from that process would be reected in the F RP outside of sharing, just as

the revenue requirement would have been initially reected in FRP rates.

XXIX.

Based on the current FRP procedures, ELL’s 2019 Evaluation Period (calendar year 2019

test year) would not include any effects of LCPS. However, ELL proposes to include in the

Evaluation Report for 2019 the first year revenue requirement for LCPS and implement an

interim rate adjustment in July 2020 (assuming a June 2020 in-service date). Consequently, rates

placed into effect with the rst billing cycle of September 2020 will reect the results of the

2019 test year and effects of including the estimated first-year’s revenue requirement of LCPS

outside of sharing. In the test year 2020 FRP ling, again assuming the existence of an FRP, it

19

this docket would have an opportunity to request information regarding the revenue requirement

calculation and to propose corrections. An additional update to the estimated first-year revenue

requirement would be submitted in this docket 60 days prior to the expected in-service date

(“Final Estimate Update”) and, again, the parties would have an opportunity to request

information regarding the revenue requirement calculation and to propose corrections. Absent

proposed adjustments, the Final Estimate Update would serve as the basis for the amount that is

included in rates the first billing cycle following the unit’s placement in service. In the event

adjustments to the Final Estimate Update are proposed, any adjustments agreed upon by ELL

would be reflected in the rates that are implemented with the rst billing cycle following

placement of the Project in service. To the extent there are unresolved issues regarding a

proposed adjustment, the revenue requirement included in the Final Estimate Update would be

implemented, subject to refund, and resolution would take place in the subsequent FRP in

accordance with the dispute resolution process provided for therein. Any changes to the revenue

requirement that result from that process would be reected in the F RP outside of sharing, just as

the revenue requirement would have been initially reected in FRP rates.

XXIX.

Based on the current FRP procedures, ELL’s 2019 Evaluation Period (calendar year 2019

test year) would not include any effects of LCPS. However, ELL proposes to include in the

Evaluation Report for 2019 the first year revenue requirement for LCPS and implement an

interim rate adjustment in July 2020 (assuming a June 2020 in-service date). Consequently, rates

placed into effect with the rst billing cycle of September 2020 will reect the results of the

2019 test year and effects of including the estimated first-year’s revenue requirement of LCPS

outside of sharing. In the test year 2020 FRP ling, again assuming the existence of an FRP, it

19

would be necessary to annualize the LCPS costs incurred by ELL to reect twelve months of

costs and re-align the net revenue requirement to be included within the FRP bandwidth

calculation. After the LCPS initial revenue requirement is recovered through the FRP for one

twelve-month period, the Company will true up all components of the rst-year retail revenue

requirement to reect the actual O&M expense incurred during the first year of operation. This

adjustment would also reect any additional adjustments required as a result of actual first year

operations, and remove the amount associated with the recovery of deferred costs. Assuming the

initial revenue requirement is reected in July 2020 FRP rates, this true-up would occur with

implementation of the 2021 Evaluation Period FRP, with rates effective in September 2021.

This true-up would be implemented outside the FRP sharing mechanism. Thereafter, the

Evaluation Report for the applicable FRP and corresponding prospective rates will reect the

realignment of the LCPS-related revenue requirement and will be taken into account within the

bandwidth calculation of the applicable F RP (i.e., inside of sharing) through the subsequent FRP

Evaluation Period with any required change in rates taking effect with the corresponding

Evaluation Period rate effective date. Through this recovery plan, inclusion of the costs of LCPS

in rates would be coordinated with the inclusion of the non-LCPS revenue requirement that is

reected in rates. This would allow for the recovery from customers of the non-fuel costs at the

same time customers receive the fuel savings from LCPS being placed in-service. The Company

specifically requests that the Commission approve this procedure to implement the necessary

change in rates contemporaneously with the commercial operation of LCPS. This in-service

ratemaking treatment is consistent with that approved by the Commission in connection with

ELL’s construction of Ninemile 6.12

'2

See Order Nos. U-31971 and U-33033 and ELL’s Rider Schedule FRP—7, Section 3.A.3.

20

would be necessary to annualize the LCPS costs incurred by ELL to reect twelve months of

costs and re-align the net revenue requirement to be included within the FRP bandwidth

calculation. After the LCPS initial revenue requirement is recovered through the FRP for one

twelve-month period, the Company will true up all components of the rst-year retail revenue

requirement to reect the actual O&M expense incurred during the first year of operation. This

adjustment would also reect any additional adjustments required as a result of actual first year

operations, and remove the amount associated with the recovery of deferred costs. Assuming the

initial revenue requirement is reected in July 2020 FRP rates, this true-up would occur with

implementation of the 2021 Evaluation Period FRP, with rates effective in September 2021.

This true-up would be implemented outside the FRP sharing mechanism. Thereafter, the

Evaluation Report for the applicable FRP and corresponding prospective rates will reect the

realignment of the LCPS-related revenue requirement and will be taken into account within the

bandwidth calculation of the applicable F RP (i.e., inside of sharing) through the subsequent FRP

Evaluation Period with any required change in rates taking effect with the corresponding

Evaluation Period rate effective date. Through this recovery plan, inclusion of the costs of LCPS

in rates would be coordinated with the inclusion of the non-LCPS revenue requirement that is

reected in rates. This would allow for the recovery from customers of the non-fuel costs at the

same time customers receive the fuel savings from LCPS being placed in-service. The Company

specifically requests that the Commission approve this procedure to implement the necessary

change in rates contemporaneously with the commercial operation of LCPS. This in-service

ratemaking treatment is consistent with that approved by the Commission in connection with

ELL’s construction of Ninemile 6.12

'2

See Order Nos. U-31971 and U-33033 and ELL’s Rider Schedule FRP—7, Section 3.A.3.

20

XXX.

In the alternative, should ELL no longer have an F RP in place when LCPS enters

commercial operation, the Company proposes to le a general rate case twelve months prior to

the anticipated in—service date of LCPS with pro forma adjustments to the test year to reect the

LCPS’s estimated rst-year revenue requirement. The effect of regulatory lag associated with a

project of this size is too signicant for the Commission not to provide for the timely inclusion

of LCPS costs in the rates of ELL. Also, it is important to align the timing of the cost

responsibility for LCPS with the timing of customers’ receipt of benets from the Project.

XXXI.

Timely implementation of a rate change under either alternative ratemaking process

would avoid the need for a deferral order from the Commission because cost recovery would

begin contemporaneously with the commercial operation of the unit. However, if the Company

is unable to begin recovering Project costs when LCPS is placed in service, then the Company

requests the approval to defer all non-fuel costs, including a full return on the investment, until

such time as those costs are reflected in rates. Such a deferral would include the accrual of

carrying charges at the full Commission-authorized rate of return, and the Company proposes

that the deferred costs would be recovered over a two-year period. This alternative recovery is

generally more costly to customers due to the accumulation of carrying charges on the deferred

balance.

XXXII.

As part of the Regulatory Approval Plan, the Company proposes a Monitoring Plan

patterned after the monitoring plan approved by the Commission relating to Ninemile 6 in

Docket No. U-31971 and the monitoring plan proposed for the St. Charles Power Station in

21

XXX.

In the alternative, should ELL no longer have an F RP in place when LCPS enters

commercial operation, the Company proposes to le a general rate case twelve months prior to

the anticipated in—service date of LCPS with pro forma adjustments to the test year to reect the

LCPS’s estimated rst-year revenue requirement. The effect of regulatory lag associated with a

project of this size is too signicant for the Commission not to provide for the timely inclusion

of LCPS costs in the rates of ELL. Also, it is important to align the timing of the cost

responsibility for LCPS with the timing of customers’ receipt of benets from the Project.

XXXI.

Timely implementation of a rate change under either alternative ratemaking process

would avoid the need for a deferral order from the Commission because cost recovery would

begin contemporaneously with the commercial operation of the unit. However, if the Company

is unable to begin recovering Project costs when LCPS is placed in service, then the Company

requests the approval to defer all non-fuel costs, including a full return on the investment, until

such time as those costs are reflected in rates. Such a deferral would include the accrual of

carrying charges at the full Commission-authorized rate of return, and the Company proposes

that the deferred costs would be recovered over a two-year period. This alternative recovery is

generally more costly to customers due to the accumulation of carrying charges on the deferred

balance.

XXXII.

As part of the Regulatory Approval Plan, the Company proposes a Monitoring Plan

patterned after the monitoring plan approved by the Commission relating to Ninemile 6 in

Docket No. U-31971 and the monitoring plan proposed for the St. Charles Power Station in

21

Docket No. U-33770. The Company’s proposed Monitoring Plan is attached to the Direct

Testimony of Mr. Thomas as Exhibit JBT-2. The Monitoring Plan contemplates a quarterly

report providing detailed information on the status of LCPS, its costs, and other activities that are

critical to completing the Project in a timely manner, and it includes appropriate condentiality

restrictions designed to address any competitive concerns that would arise with respect to

intervenors who are also participants in the power market. The Monitoring Plan will serve as an

“early warning system,” and the Company commits to providing the Commission in the quarterly

reports an afrmation as to whether continuing the Project is, in the Company’s opinion, in the

public interest.

XXXIII.

As explained in the Direct Testimony of Mr. Thomas, in the event the Company believes

it to be in the public interest to cease construction and cancel the Project, it will make a ling in

this proceeding seeking Commission approval of that recommendation. In this Application, the

Company seeks approval of this procedure.

XXXIV.

As discussed in the Direct Testimony of Mr. Thomas, the Company is not requesting the

sort of specic approvals concerning risk management and use of contractors that were proposed

in connection with the application to certify the St. Charles Power Station. ELL has not included

those requests in its application to certify LCPS in the light of the Commission’s issuance of a

Notice of Rulemaking in Docket No. R-34246 to consider the appropriateness and potential

scope of the Commission’s review and pre-approval of utility contracts regarding the

22

Docket No. U-33770. The Company’s proposed Monitoring Plan is attached to the Direct

Testimony of Mr. Thomas as Exhibit JBT-2. The Monitoring Plan contemplates a quarterly

report providing detailed information on the status of LCPS, its costs, and other activities that are

critical to completing the Project in a timely manner, and it includes appropriate condentiality

restrictions designed to address any competitive concerns that would arise with respect to

intervenors who are also participants in the power market. The Monitoring Plan will serve as an

“early warning system,” and the Company commits to providing the Commission in the quarterly

reports an afrmation as to whether continuing the Project is, in the Company’s opinion, in the

public interest.

XXXIII.

As explained in the Direct Testimony of Mr. Thomas, in the event the Company believes

it to be in the public interest to cease construction and cancel the Project, it will make a ling in

this proceeding seeking Commission approval of that recommendation. In this Application, the

Company seeks approval of this procedure.

XXXIV.

As discussed in the Direct Testimony of Mr. Thomas, the Company is not requesting the

sort of specic approvals concerning risk management and use of contractors that were proposed

in connection with the application to certify the St. Charles Power Station. ELL has not included

those requests in its application to certify LCPS in the light of the Commission’s issuance of a

Notice of Rulemaking in Docket No. R-34246 to consider the appropriateness and potential

scope of the Commission’s review and pre-approval of utility contracts regarding the

22

construction and/or acquisition of signicant generation and transmission-related assets.”

Considering the importance of the issues, however, ELL has included with its Application

complete information about its approaches to the use of contractors to construct LCPS and to

project risk management. The Commission will therefore have this information as it determines

the prudence of ELL’s decision to commence construction under the 1983 General Order.

REQUEST FOR TIMELY TREATMENT

XXXV.

As discussed herein, the Company is requesting that the Commission direct or establish a

Procedural Schedule in accordance with the 120-day certication period set forth in the 1983

General Order. As Mr. Thomas discusses in his Direct Testimony and as discussed by other

witnesses, there are signicant nancial and operational implications for ELL’s customers if

LCPS is not constructed on the timetable proposed. And as discussed by Messrs. Girard and

Charles Long in their Direct Testimony, development and deployment of signicant generation

and transmission projects is a time consuming process that must begin several years in advance

of the need-by date. The 120—day requirement in the Commission’s 1983 General Order

recognizes the importance of timely feedback from the Commission because, if the Commission

determines that a proposed resource option is found to not serve the public interest, the Company

must then pursue other options to maintain reliable, affordable electric service.

XXXVI.

In the case of ELL’s needs in WOTAB, the Company must either construct new

generation in the region or a major transmission project, as discussed by Mr. Charles Long.

'3

See Commission Docket No. R-34246, In re: Rulemalcing to consider the appropriateness and potential

scope of the Louisiana Public Service Commission ’s review and pre-approval of utility contracts regarding the

construction and/or acquisition of signicant generation and transmission related assets, Notice of Rulemaking

dated September 22, 2016.

23

construction and/or acquisition of signicant generation and transmission-related assets.”

Considering the importance of the issues, however, ELL has included with its Application

complete information about its approaches to the use of contractors to construct LCPS and to

project risk management. The Commission will therefore have this information as it determines

the prudence of ELL’s decision to commence construction under the 1983 General Order.

REQUEST FOR TIMELY TREATMENT

XXXV.

As discussed herein, the Company is requesting that the Commission direct or establish a

Procedural Schedule in accordance with the 120-day certication period set forth in the 1983

General Order. As Mr. Thomas discusses in his Direct Testimony and as discussed by other

witnesses, there are signicant nancial and operational implications for ELL’s customers if

LCPS is not constructed on the timetable proposed. And as discussed by Messrs. Girard and

Charles Long in their Direct Testimony, development and deployment of signicant generation

and transmission projects is a time consuming process that must begin several years in advance

of the need-by date. The 120—day requirement in the Commission’s 1983 General Order

recognizes the importance of timely feedback from the Commission because, if the Commission

determines that a proposed resource option is found to not serve the public interest, the Company

must then pursue other options to maintain reliable, affordable electric service.

XXXVI.

In the case of ELL’s needs in WOTAB, the Company must either construct new

generation in the region or a major transmission project, as discussed by Mr. Charles Long.

'3

See Commission Docket No. R-34246, In re: Rulemalcing to consider the appropriateness and potential

scope of the Louisiana Public Service Commission ’s review and pre-approval of utility contracts regarding the

construction and/or acquisition of signicant generation and transmission related assets, Notice of Rulemaking

dated September 22, 2016.

23

While the Company believes the construction of LCPS is clearly the preferred, more economical

means to meet this need, that is ultimately a question for the Commission to decide, but it is

critical that the Commission make this decision in a timely manner, consistent with the 120-day

certication period set forth in the 1983 General Order. To assist in the timely resolution of this

matter, the Company also requests that the intervention period in this matter be shortened to

fteen (15) days and that a scheduling conference be held the week following the close of the

intervention period.

SERVICE OF NOTICES AND PLEADINGS

XXXVII.

The Company requests that notices, correspondence, and other communications

concerning this Application be directed to the following persons:

Mark D. Kleehammer Lawrence J. Hand, Jr.

4809 Jefferson Highway Elizabeth L. Adams

Mail Unit L-JEF-357 639 Loyola Avenue

Jefferson, Louisiana 70121 Mail Unit L-ENT-26E

Telephone: (504) 840-2528 New Orleans, Louisiana 70113

Facsimile: (504) 259-1685 Telephone: (504) 576-6825

mkleeha@entergy.com Facsimile: (504) 576-5579

lhand@entergy.com eadams4@entergy.com

The Company requests that the foregoing persons be placed on the Ofcial Service List for this

proceeding and respectfully requests that the Commission permit the designation of more than

one person to be placed on the Ofcial Service List for service in this proceeding.

REQUEST FOR CONFIDENTIAL TREATMENT

XXXVIII.

Portions of the supporting Direct Testimony and Exhibits contain information considered

by the Company to be proprietary and condential. Disclosure of certain information may

24

While the Company believes the construction of LCPS is clearly the preferred, more economical

means to meet this need, that is ultimately a question for the Commission to decide, but it is

critical that the Commission make this decision in a timely manner, consistent with the 120-day

certication period set forth in the 1983 General Order. To assist in the timely resolution of this

matter, the Company also requests that the intervention period in this matter be shortened to

fteen (15) days and that a scheduling conference be held the week following the close of the

intervention period.

SERVICE OF NOTICES AND PLEADINGS

XXXVII.

The Company requests that notices, correspondence, and other communications

concerning this Application be directed to the following persons:

Mark D. Kleehammer Lawrence J. Hand, Jr.

4809 Jefferson Highway Elizabeth L. Adams

Mail Unit L-JEF-357 639 Loyola Avenue

Jefferson, Louisiana 70121 Mail Unit L-ENT-26E

Telephone: (504) 840-2528 New Orleans, Louisiana 70113

Facsimile: (504) 259-1685 Telephone: (504) 576-6825

mkleeha@entergy.com Facsimile: (504) 576-5579

lhand@entergy.com eadams4@entergy.com

The Company requests that the foregoing persons be placed on the Ofcial Service List for this

proceeding and respectfully requests that the Commission permit the designation of more than

one person to be placed on the Ofcial Service List for service in this proceeding.

REQUEST FOR CONFIDENTIAL TREATMENT

XXXVIII.

Portions of the supporting Direct Testimony and Exhibits contain information considered

by the Company to be proprietary and condential. Disclosure of certain information may

24

present an unreasonable risk of ham to ELL and its customers, as well as participants in the

2015 ELL RF P. Therefore, in light of the sensitive nature of such information, the Company has

submitted two versions of the Direct Testimony of Messrs. May, J. Long, Girard, C. Long,

Hurstell, Walz, and Nguyen as well as Exhibits of Messrs. May, Thomas, J. Long, Girard, C.

Long, Hurstell, John, Walz, Nguyen, and DeGeorge, one marked “Public Version” and the other

marked “Highly Sensitive Protected Material” (“HSPM”). Although the condential and

sensitive information and documents included with the Application may be reviewed by

appropriate representatives of the Commission Staff and intervenors pursuant to the terms and

conditions of a suitable condentiality agreement once such an agreement has been executed in

this docket, this confidential information also is being provided pursuant to, and shall be exempt

from public disclosure pursuant to, the Commission’s General Order dated August 31, 1992, and

Rule 12.1 of the Rules of Practice and Procedure of the Louisiana Public Service Commission.

XXXIX.

Additionally, portions of Mr. C. Long’s testimony and exhibits are considered

Confidential Energy Infrastructure Information (“CEII”) as dened by 18 C.F.R. §

388.l13(c)(1). The sensitive nature of CEII requires additional protections and safeguards;

therefore, the Company has submitted an additional CEII version of the Direct Testimony of Mr.

C. Long and accompanying exhibits CWL-2 and CWL-6. Although the CEII testimony and

exhibits included with the Application may be reviewed by appropriate representatives of the

Commission Staff and intervenors pursuant to the terms and conditions of an appropriate CEII

agreement once such an agreement has been executed in this docket, the CEII material is being

filed with the Commission pursuant to, and shall be exempt from public disclosure pursuant to,

25

present an unreasonable risk of ham to ELL and its customers, as well as participants in the

2015 ELL RF P. Therefore, in light of the sensitive nature of such information, the Company has

submitted two versions of the Direct Testimony of Messrs. May, J. Long, Girard, C. Long,

Hurstell, Walz, and Nguyen as well as Exhibits of Messrs. May, Thomas, J. Long, Girard, C.

Long, Hurstell, John, Walz, Nguyen, and DeGeorge, one marked “Public Version” and the other

marked “Highly Sensitive Protected Material” (“HSPM”). Although the condential and

sensitive information and documents included with the Application may be reviewed by

appropriate representatives of the Commission Staff and intervenors pursuant to the terms and

conditions of a suitable condentiality agreement once such an agreement has been executed in

this docket, this confidential information also is being provided pursuant to, and shall be exempt

from public disclosure pursuant to, the Commission’s General Order dated August 31, 1992, and

Rule 12.1 of the Rules of Practice and Procedure of the Louisiana Public Service Commission.

XXXIX.

Additionally, portions of Mr. C. Long’s testimony and exhibits are considered

Confidential Energy Infrastructure Information (“CEII”) as dened by 18 C.F.R. §

388.l13(c)(1). The sensitive nature of CEII requires additional protections and safeguards;

therefore, the Company has submitted an additional CEII version of the Direct Testimony of Mr.

C. Long and accompanying exhibits CWL-2 and CWL-6. Although the CEII testimony and

exhibits included with the Application may be reviewed by appropriate representatives of the

Commission Staff and intervenors pursuant to the terms and conditions of an appropriate CEII

agreement once such an agreement has been executed in this docket, the CEII material is being

filed with the Commission pursuant to, and shall be exempt from public disclosure pursuant to,

25

18 C.F.R. § 388.113(c)(l), the Commission’s General Order dated August 31, 1992, and Rule

12.1 of the Rules of Practice and Procedure of the Louisiana Public Service Commission.

PRAYER FOR RELIEF

XL.

WHEREFORE, Entergy Louisiana, LLC respectfully requests that the Commission,

subj ect to the fullest extent of its jurisdiction, grant relief and give its approval as follows:

1. Find that the Company’s construction of LCPS serves the public convenience and

necessity and is in the public interest, and is therefore prudent, in accordance with

the Commission’s 1983 General Order;

Find that the selection of the Project through the 2015 ELL RFP is consistent with

the terms of the Commission’s MBM Order;

Find that the retail revenue requirement associated with the Project (to be

determined in a subsequent revenue requirement ling) is deemed eligible for

recovery in the first billing cycle of the month following commercial operation of

LCPS via Rider FRP, outside of the FRP sharing mechanism and outside of the cap

set forth in Section 2.C.2.d;

Authorize (i) a deferral of the non-fuel revenue requirement (i.e., costs that are not

eligible to be recovered through the FAC) associated with LCPS until such time as

the cost of LCPS is reflected in the Company’s retail rates, (ii) a deferral of the

costs to hire and train LCPS plant staff in advance of the in-service date, and (iii) an

accrual of carrying charges at the full Commission-authorized rate of return,

commencing on the date of commercial operation of LCPS and continuing until

such time as such costs of LCPS are reected in the Company’s retail rates;

Authorize the recovery, over a two-year period, of any deferred balances referenced

in Paragraph 4 above beginning contemporaneously with the time that the costs of

LCPS begin to be recovered from customers through rates;

Approve recovery, though the FAC, of the variable expenses incurred under the

LTSA applicable to LCPS;

Approve the Monitoring Plan under which the Company will report to Commission

Staff on a quarterly basis the status of LCPS, including schedule, costs, and other

critical associated activities;

26

18 C.F.R. § 388.113(c)(l), the Commission’s General Order dated August 31, 1992, and Rule

12.1 of the Rules of Practice and Procedure of the Louisiana Public Service Commission.

PRAYER FOR RELIEF

XL.

WHEREFORE, Entergy Louisiana, LLC respectfully requests that the Commission,

subj ect to the fullest extent of its jurisdiction, grant relief and give its approval as follows:

1. Find that the Company’s construction of LCPS serves the public convenience and

necessity and is in the public interest, and is therefore prudent, in accordance with

the Commission’s 1983 General Order;

Find that the selection of the Project through the 2015 ELL RFP is consistent with

the terms of the Commission’s MBM Order;

Find that the retail revenue requirement associated with the Project (to be

determined in a subsequent revenue requirement ling) is deemed eligible for

recovery in the first billing cycle of the month following commercial operation of

LCPS via Rider FRP, outside of the FRP sharing mechanism and outside of the cap

set forth in Section 2.C.2.d;

Authorize (i) a deferral of the non-fuel revenue requirement (i.e., costs that are not

eligible to be recovered through the FAC) associated with LCPS until such time as

the cost of LCPS is reflected in the Company’s retail rates, (ii) a deferral of the

costs to hire and train LCPS plant staff in advance of the in-service date, and (iii) an

accrual of carrying charges at the full Commission-authorized rate of return,

commencing on the date of commercial operation of LCPS and continuing until

such time as such costs of LCPS are reected in the Company’s retail rates;

Authorize the recovery, over a two-year period, of any deferred balances referenced

in Paragraph 4 above beginning contemporaneously with the time that the costs of

LCPS begin to be recovered from customers through rates;

Approve recovery, though the FAC, of the variable expenses incurred under the

LTSA applicable to LCPS;

Approve the Monitoring Plan under which the Company will report to Commission

Staff on a quarterly basis the status of LCPS, including schedule, costs, and other

critical associated activities;

26

10.

ll.

12.

13.

Rule that, with respect to the Project described in the Application, the Company has

complied with, or is not in conflict with, the provisions of all applicable LPSC

Orders;

Find, as provided in the Commission’s Special Order No. 7-2000, dated March 22, 2000, that the condential testimony, exhibits, and other materials referenced in the

Application shall be exempt from public disclosure pursuant to the Commission’s

General Order dated August 31, 1992 and Rule 12.1 of the Rules of Practice and

Procedure of the Louisiana Public Service Commission;

Direct that the period for interventions and protests be shortened to fteen (15) days and that a scheduling conference be held the week following the close of the

intervention period;

Develop and implement appropriate procedures to facilitate a Commission decision

on the Company’s Application consistent with the 120-day requirement in the

Commission’s 1983 General Order;

Direct that notice of all matters in these proceedings be sent to Mark D.

Kleehammer, Lawrence J. Hand, Jr., and Elizabeth L. Adams as representatives of

the Company; and

Order such other general and equitable relief as to which the Company may show

itself so entitled.

Respectfully submitted,

BY: . . Lawrence J. Hand, Jr., La. Bar No. 23770

Elizabeth L. Adams, La. Bar No. 33703

Mail Unit L-ENT-26E

639 Loyola Avenue

New Orleans, Louisiana 70113

Telephone: (504) 576-5469

Facsimile: (504) 576-5579

ATTORNEYS FOR

ENTERGY LOUISIANA, LLC

27

10.

ll.

12.

13.

Rule that, with respect to the Project described in the Application, the Company has

complied with, or is not in conflict with, the provisions of all applicable LPSC

Orders;

Find, as provided in the Commission’s Special Order No. 7-2000, dated March 22, 2000, that the condential testimony, exhibits, and other materials referenced in the

Application shall be exempt from public disclosure pursuant to the Commission’s

General Order dated August 31, 1992 and Rule 12.1 of the Rules of Practice and

Procedure of the Louisiana Public Service Commission;

Direct that the period for interventions and protests be shortened to fteen (15) days and that a scheduling conference be held the week following the close of the

intervention period;

Develop and implement appropriate procedures to facilitate a Commission decision

on the Company’s Application consistent with the 120-day requirement in the

Commission’s 1983 General Order;

Direct that notice of all matters in these proceedings be sent to Mark D.

Kleehammer, Lawrence J. Hand, Jr., and Elizabeth L. Adams as representatives of

the Company; and

Order such other general and equitable relief as to which the Company may show

itself so entitled.

Respectfully submitted,

BY: . . Lawrence J. Hand, Jr., La. Bar No. 23770

Elizabeth L. Adams, La. Bar No. 33703

Mail Unit L-ENT-26E

639 Loyola Avenue

New Orleans, Louisiana 70113

Telephone: (504) 576-5469

Facsimile: (504) 576-5579

ATTORNEYS FOR

ENTERGY LOUISIANA, LLC

27