Good News for Jobs and Ratepayers but Most Details Secret
AKANSAS PUBLIC SERVICE COMMISSION, LITTLE ROCK: While many of the details are redacted from public view, recent testimony by Entergy Arkansas officials before the Public Service Commission revealed that the company’s new 81MW solar development in Stuttgart, Arkansas will save residential customers an average of 11 cents per month over a 20 year period.
The company’s manager of resource planning, H. Matt Wolf, also testified that over the course of the 20-year power purchase agreement (PPA) for energy produced by the solar plant, it is possible that Entergy “will retire some or all of coal generation (1031MW)…”
“No decision has been made to deactivate or retire any of those resources,” Wolf testified on April 14, “Nonetheless, the uncertainties are real and, and the magnitude of such uncertainty warrants taking steps now to address those potential planning issues. Stuttgart Solar will help (Entergy) meet the future needs of its customers.”
It appears there is no coincidence that Entergy Arkansas’s primary legislative initiative, Act 1088, and its petition to the PSC for approval of the solar PPA occurred in the same time frame.
In Entergy’s filing before the APSC, it contended, that pursuant to Act 1088, the cost of the PPA is reasonable and prudent; the PPA will provide savings for retail customers as compared to other generation and power supply options over the term of the PPA; etc.
The proposed 20-year PPA with Stuttgart Solar LLC, is the Entergy’s first utility scale solar project. According to testimony by Kurt Castleberry, Director, Resource Planning and Market Operations at Entergy Arkansas, the project will employ 200 to 300 construction workers while it is being built over the next year and will contribute approximately $400,000 to $600,000 in annual property taxes during its operational life.
Entergy’s solar PPA is an interesting study of how legislation, regulation, and integrated resource planning works together in the planning and development of utility generation and transmission projects. The core elements of the solar PPA can be traced back to Entergy’s 2012 Integrated Resource Plan (IRP). One of the key components of an IRP is a determination of the amount of additional resources that will be needed to meet a utility company’s load and energy requirements both reliably and cost-effectively. The 2012 IRP was unique in that it reflected the changes due to Entergy Arkansas leaving the Entergy System Agreement and into MISO or the Midcontinent Independent System Organization. Due to this change, Entergy Arkansas focused solely on its service territory needs.
Entergy Arkansas began an evaluation of long-term renewable resources through its 2014 request for proposals up to 200 MWs. Most information about the bidding process, including the number of bidders and the number of bids that were analyzed, is redacted from public view. But the company’s testimony makes clear that Stuttgart Solar offered the best deal for consumers and that the PPA provisions in Act 1088 made the final deal possible. Entergy Arkansas officials also testified that existing federal tax credits for solar developments expire at the end of 2016 making timing of the Stuttgart Solar development extremely important.
AAEA and Arkansas energy consumers can be encouraged that Entergy Arkansas conducted a thorough and well-reasoned process to identify considerable savings in developing a renewable energy resource like solar. However, AAEA remains concerned about the excessive amount of information about this project that was redacted from public view at the request of the utility and with the consent of the APSC.
AAEA would like to know more about the financial and planning aspects of the Stuttgart Solar PPA, such as what were the 20-year avoided cost calculations. The Georgia state PSC required Georgia Power to show levelized “not-to-exceed” avoided costs over terms of 15, 20, 25, and 30 years in a RFP for solar. Arkansas’s ratepayers should have access to similar information and our APSC should require it.
That said, the Stuttgart 81-MW solar project is a much welcomed and needed asset in Arkansas.