JACKSON — The effect on customers wasn’t clear, but Entergy Mississippi executives testified Thursday that increasing the output capacity at Grand Gulf Nuclear Station — making it the nation’s largest single reactor — is the least expensive way to meet regional electricity demand.

Key planners of the power-up at the Claiborne County plant used the figure of 6.8 cents per kilowatt hour for the upgrade.

“By far, it is the best economic alternative we have available to us at this time,” said Robert Cooper, a systems and planning manager for Entergy Corporation’s state subsidiary during a hearing Thursday before the Mississippi Public Service Commission.

Cooper said per-kilowatt hour costs on a combined cycle gas turbine would be 11.27 cents, with natural gas costs needing to be less than $2.71 per British thermal unit for energy produced from it to cost less than energy generated by an upgraded Grand Gulf. The commodity traded at $5.11 Thursday; during 2008’s summertime electricity bill spikes, it traded up to $14.

The PSC, composed of three elected officials, is reviewing a recommendation by the state Public Utilities Staff, a separate group, recommending approval of a petition to increase the plant’s capacity to 1,443 megawatts from 1,265.

Effects on ratepayer bills beyond 2012, when the upgrade should be complete, weren’t quantified by Cooper and Jeffrey Richardson, a project manager with Entergy Operations, when questioned by commissioners.

The three-member panel took the matter under advisement, with a decision not expected before the panel’s December meeting, Chairman Lynn Posey said.

Filed in May, the petition cites shortages in long-term baseload generation for Entergy customers in three states who receive power from the plant as reasons for upgrading the $3 billion Grand Gulf plant, first put into use in 1985 after 11 years of construction. Design phases of the upgrade are set to last through the next two years, with major equipment replacements planned to wrap up during a spring 2012 refueling outage predicted to last between 45 and 80 days.

Heading the request are System Energy Resources Inc. and South Mississippi Electric Power Association. New Orleans-based Entergy Corp. owns all common stock in System Energy, which in turn has 90 percent ownership and leasehold interest in Grand Gulf. South Mississippi EPA owns 10 percent interest in the plant and receives 10 percent of energy generated by the state’s only nuclear plant for its 56-county customer base in the state.

Earlier this month, company officials said a separate effort to license a second reactor at the site remains a possibility — though diminished in light of market conditions and the cost of design plans for the core of the proposed reactor. Estimates to build it from contract designer GE-Hitachi reportedly had tripled by late 2008, causing the utility to suspend its efforts to build and license the second reactor.

Federal approval on the upgrade is also needed, specifically from the Nuclear Regulatory Commission, which must OK an increase in thermal operating limits which will increase the steam flow needed to produce the extra wattage in the generator. Total cost of the upgrade has varied. Further construction cost analysis since May has pushed the projection to $510 million, Richardson said.

Of that, about $152 million, or 30 percent, will come from Entergy’s ratepayers and 10 percent from customers of South Mississippi EPA, Richardson confirmed to the commission. Nathan Brown, chief operating officer for SMEPA, said no cost analysis was done to determine how much per kilowatt hour it would cost its ratepayers, but the upgrade was likely to benefit customers in the long run because of the utility’s aging coal-fired facilities.

 GE-Hitachi was chosen for the design study and to develop the license amendment, according to petition documents, and Siemens Power Corp. was selected for a new high-pressure turbine motor, both because of each company’s expertise and having supplied components to the existing plant. Baton Rouge-based The Shaw Group was chosen prime contractor and labor supplier for the major modifications after competitively bidding on the job, Richardson said.

“I implore you,” Commissioner Brandon Presley said. “With Mississippi (customers) paying that type of money, Mississippi contractors need to do the work.”

The planned “extended power uprate” at Grand Gulf would be the second since 2002, when power was upped about 2 percent. It would surpass generating capacity at Arizona’s Palo Verde power plant by about 9 percent.

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Contact Danny Barrett Jr. at dbarrett@vicksburgpost.com