Louisiana Power & Light (LP&L) Company Profile17,18,19

LP&L serves about 600,000 electric customers in 46 of Louisiana 64 parishes. The area includes a large portion of North Louisiana and the extreme southeastern portion of the state except for the New Orleans metropolitan area. The company's service area is shown on the map in Figure 5. Headquartered in New Orleans, LP&L principal business address and telephone number are:

Louisiana Power & Light Company
639 Loyola Avenue
New Orleans, Louisiana 70112
Phone: 504/569-4000

The southeastern area of the state served by the company contains industrial loads that are primarily chemical and petroleum related. The northern parts include major industrial loads comprised of timber - related and agricultural interests and includes the paper industry. Economic growth in LP&L's service area has been modest in recent years due to the prolonged depression in the oil and gas industry and Louisiana's generally stagnant economy.

In 1993 LP&L's electricity sales by customer sector as a percentage of total sales of 29,440 million KWH were 25.0% residential, 15.1% commercial, 54.0% industrial, and 5.9% other.

The fuel sources for the power generated by LP&L's plants in 1992 were 58% natural gas and 42% nuclear. An insignificant amount of fuel oil was also used. The company's 1993 peak demand occurred on August 19 and was 5,123 MW, up 3.6% from 1992. With a total generating capability of 5,580 MW, the capacity reserve margin was 8.2%. As a member of the centrally dispatched Entergy system, surplus power from elsewhere in the system and the Southwest Power Pool is available to LP&L. In addition, each Entergy utility operating subsidiary is obligated to purchase a specific percentage of System Energy Resources 90% interest in Grand Gulf capacity and energy as ordered by the FERC. LP&L's allocation is 14%. These combined resources should enable the company to meet any foreseeable peak demand well into the 21st century. No generating unit is under construction or planned.

Electric Generating Facilities
In terms of generating capacity and power generated in 1992, LP&L is the state's largest electric utility. The company operates and is the sole owner of seven generating stations with 1992 net generating capability totaling 5,580 MW. An additional 20 MW of hydroelectric capacity is available under a long - term contract with the Sabine River Authority of Louisiana.12 According to primary fuel source, generating capability is 80.7% natural gas and 19.3% nuclear. The 1992 generating capability of each LP&L generating station according to primary fuel type is listed in Table 3. The location of each generating plant is plotted on the map of Figure 1.

LP&L's enerating capability is 42.4% of the total capability of the IOU's Louisiana plants, 34.1% of the total capability of the state's utilities, and 29.1% of the total capability of all generating sources within the state.

In 1992 the 18,18 1 million KWH generated by plants operated by LP&L was 40.3% of the power generated by the IOUs Louisiana plants. This amount was 32.9% of the total produced by the state's utilities and 24.6% of all power produced in Louisiana. The 1992 net generation of each generating plant according to fuel type is listed in Table 1

Recent Developments
On July 1, 1993, LP&L filed a revision to the Least Cost Integrated Resource Plan it filed with the LPSC and the New Orleans City Council on December 1, 1992. The plan includes both demand and supply - side measures to delay the building of new power plants by the Entergy System for the next 20 years. 18

As part of Entergy's new internal regional alignment, LP&L's service area is now part of three of the six new regions. The Metro Region, headquartered in New Orleans, takes in LP&L's extreme southeastern area. The Southern Region, headquartered in Baton Rouge, includes the rest of LP&L's southern area and the area north of Lake Pontchartrain served by LP&L. The Central Division, headquartered in Monroe, consists of LP&L's North Louisiana service area and a portion of southern Arkansas. Despite these internal changes LP&L's original service area will remain intact as a legal entity for regulatory jurisdictional purpose.31

The company could benefit from the $481 million in new Louisiana projects announced by the wood products industry since May. Some $82 million is earmarked for LP&L's service area in North Louisiana.40

History 5,36,41
The events that ultimately resulted in the formation of LP&L were set in motion in the early 1920s, when Harvey Couch's expanding electric properties in Arkansas, Mississippi, and Louisiana began to take the shape of an integrated electric system. He needed a new source of power to continue to grow so he commissioned the engineering firm of Ford, Bacon & Davis to select a site for a new plant. They chose Sterlington, Louisiana, near the center of a newly discovered natural gas field that was the largest in the world at the time.

On November 12, 1924, Couch and his associates organized two new companies: The Louisiana Power and Light Company, which would begin buying small, scattered electric plants in North Louisiana, and The Louisiana Power Company for building the new generating facility at Sterlington. Couch's plans called for one company to develop the market for electric power in North Louisiana, while the other would provide electric power for the North Louisiana properties being purchased as well as a portion of the power requirements for Couch's properties in Arkansas and Mississippi.

Construction on the Sterlington power station began in December 1924, and it was placed in service in November 1925. It started with a total generating capability of 25 MW. Two additional turbo-generators, each with a capability of 30 MW, were placed in service in 1928 and 1929, making the Sterlington station one of the largest in the South. For 25 years it was LP&L's lone generating plant.

As competition began to thwart Couch's ambitious expansion plans, he and his main rival, Sidney Mitchell, head of the Electric Bond and Share Company, realized their best option was to merge. In 1926 Harvey Couch and Electric Bond consolidated their interests into one large, coordinated system under the ownership of the Electric Power & Light Corporation, the forerunner to Middle South Utilities, and subsequently Entergy.

While the city of New Orleans began to receive electric service in 1881, Algiers, directly across the Mississippi River from New Orleans, did not begin receiving service until 1892. Algiers had been a part of New Orleans since 1870, but because of its physical separation from the city, Algiers had a different development of electric service. It was provided by the Algiers Ice Manufacturing Company under a franchise granted by the city of New Orleans on May 13, 1892. From 1907 to 1917 the company was expanded and sold six times and underwent several name changes in the process. The sixth owner, the South New Orleans Light & Traction Company, operated the properties until they were purchased along with several other properties to form the newly organized Louisiana Power & Light Company on August 1, 1927.

The present-day Louisiana Light & Power Company was incorporated June 25, 1927, as the result of the merger of Electric Power & Light Corporation, the acquisition of the properties of the South New Orleans Light & Traction Company, and the absorption of additional companies. The general offices of the new company were located in a renovated fire house in Algiers. On August 1, 1927, the new company officially acquired certain Louisiana properties and spent the remainder of 1927 organizing and planning its future as a consolidated utility company operating exclusively in Louisiana. The companies absorbed in 1927 by LP&L included:

-1. Louisiana Electric Service Corporation, formerly the Louisiana Power and Light Company. (Its name was changed to Louisiana Electric Service Corporation April 4, 1927).
-2. The Central Louisiana Power Company, which owned and operated properties in Tangipahoa Parish.
-3. The Louisiana Power Company, which had built the Sterlington station and two 115,000 volt transmission lines to Arkansas and Mississippi.
-4. South New Orleans Light & Traction Company, which had been organized March 23, 1917, to operate the electric and traction systems in Algiers. (On August 31, 1925, this company had purchased a majority of the capital stock of Gretna Light & Power Company).
-5. West New Orleans Light & Traction Company, which also had been organized March 23, 1917, to operate the street railway west of New Orleans and was formerly owned by the New Orleans & Western Railway Company. (This company, which was under the same management as the South New Orleans Light & Traction Company, was engaged solely in the street railway business).
-6. Gretna Light & Power Company, Inc., including the remainder of the capital stock not already purchased earlier by the South New Orleans Light & Traction Company
-7. Certain other individual properties.

In purchasing these properties, LP&L acquired an electric railway system, manufactured and natural gas service businesses, and telephone, water, and ice properties. All of these properties were operated independently until January 1, 1928, when LP&L started into actual operation as an integrated utility company.

At the close of 1927, LP&L was serving 15,250 customers with electric power in 65 communities in both North and South Louisiana. In addition, it served 484 customers with manufactured gas, 1,095 customers with natural gas, and 1,503 customers with water. The company also had 811 miles of electric lines, 41 miles of gas mains, and 20 miles of water mains. Its electric railway system included nine miles of track. In the late 1920s LP&L built hundreds of miles of transmission and distribution lines and added several properties to its system.

During the Depression years, LP&L fared better than most utilities. There were no layoffs or pay reductions, and the company did not miss paying a dividend. In fact, the company grew throughout the 1930's by expanding into rural areas and acquiring additional utility properties.

In the 1940s LP&L continued to expand. The Sterlington station added a 44 MW unit largely to serve necessary war requirements. After the war the company emphasized rural electrification to replace the war loads. In 1949 it ended its involvement in the transit business by selling its motor coach system; began construction of Nine Mile Point, the first generating station outside of Sterlington; and became a subsidiary of the newly formed Middle South Utilities System.

An industrial boom in the 1950s brought a surge in demand for power in the state. The company responded with new plants with a total of 669 MW additional generating capability by the end of the decade. In 1953 the SEC ordered LP&L to dispose of its non-electric properties in accordance with PUHCA. The last year LP&L was operated as a utility supplying both gas and electric services was 1959.

In the 1960s several hurricanes wreaked havoc on the company. Betsy, in particular, was the worst natural disaster in company history up to that time. Nevertheless, the company's extraordinary growth continued. Indicative of the company's growth in the 1960s was the 22% increase in peak load for 1966 over 1965.

The 1970s started out with the same growth expectations as the previous three decades-but it was not to be. The company announced that it would build the giant Waterford 3 nuclear unit and two fossil-fueled units at the same site. Then, in 1973, the Arab oil embargo caused the price of natural gas to rise sharply and its availability for generation was curtailed. After 2 1/2 years, regulatory agencies finally received a construction permit for Waterford 3 in 1974. The plant went into commercial operation in September 1985, but by then customers had begun to conserve energy and growth in demand stopped.

The Waterford 3 and Grand Gulf projects were completed during changing regulatory guidelines, unprecedented inflation, and high interest rates. These factors plus inadequate rate relief and Louisiana's lackluster economy contributed to financial problems for LP&L throughout the 1980s. Beginning with MSU's "Project Olive Branch" in 1989, these problems began to subside and the company's financial position has steadily improved.

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