Section I
Non Utility Generation In Louisiana Before 1997

Part A - Non Utility Generation In Louisiana Through The End Of The 1970'S

In Louisiana, non utility generation (NUG) has operated on a scale which is significant when compared to total generation levels of the electric utilities for much of this century. This is entirely different from non utility generation structure in most other states. Process industrial operations in Louisiana were non utility generators (NUGs), meeting their own energy needs through cogeneration (the joint production of both electricity and steam), for nearly 50 years prior to the passage of the federal Public Utilities Regulatory Policy Act (PURPA) in 1978.

There are two reasons for this early growth of cogeneration in Louisiana:

1. The operation of most production processes in plants typical of the state's industrial structure such as refineries, chemical plants, and paper mills requires both electricity and steam in large quantities. And,
2. Joint production of electricity and steam is more energy efficient than the separate production of electricity and steam.

A very large base of NUG generating capacity and electric power production grew during this pre-PURPA phase of non utility generation in Louisiana, almost all of which was cogeneration based.

Initially the electrical generation equipment used by the industrial NUGs in Louisiana was of the same technology as that used by the electric utilities. Generators were steam turbine driven with the needed steam being created by steam generators (boilers). In Louisiana, these boilers were fired almost exclusively by natural gas. But, in the late 1960's that situation changed due to the introduction of more efficient technology. The industrial NUGs began installing generators driven by combustion turbines (literally jet engines) exhausting to waste heat recovery boilers. This system, known as combined cycle combustion turbine (normally shortened to combined cycle) had lower initial costs and used less fuel per unit of electricity generated (refer to Appendix A). Combined cycle technology was installed by the industrial NUGs not only to meet new electricity and steam load but also to replace existing, less efficient, steam turbine systems.

Prior to PURPA, all industrial self generated electricity was consumed in manufacturing activities on site by each NUG. There were no non utility generation sales of electricity either to the electric utilities or to third parties. Neither was there the possibility of an industrial company transmitting electricity outside its own plantsite even to an adjacent plant.

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This page updated June 18, 2008