PSC Okays Entergy Arkansas Power Deal For Stuttgart Solar Project

The state Public Service Commission on Thursday gave the okay for Entergy Arkansas Inc. (EAI) to move forward with an 81-megawatt photovoltaic solar energy generating facility in Arkansas County that is expected to connect to Arkansas’ energy grid by mid-2019.

In a 26-page order for the PSC docket established on Feb. 23, the three-person regulatory panel chaired by Commissioner Ted Thomas approved a 20-year purchase power agreement (PPA) that will allow the utility giant to soon begin construction on the state’s first utility-scale solar power plant.

In April, when the project was first announced, Entergy Arkansas CEO Hugh McDonald said the so-called “Stuttgart Solar” project will consist of an array of stationary solar panels covering nearly 500 acres and will be capable of generating enough clean energy to power approximately 13,000 homes. A new substation will be built in Arkansas County to interconnect the solar facility to Entergy Arkansas’ transmission system, the Entergy Arkansas CEO said at the time.

“For Entergy Arkansas, meeting the needs of our customers now and in years to come means embracing new technologies in our industry that make sense for our customers and for the communities we serve,” McDonald said.

In Thursday’s PSC order, also signed by Commissioners Elana Wills and Lamar Davis, the regulatory panel ruled that the renewable energy project is necessary to supplement Entergy Arkansas’ existing generation capacity by lowering power costs and providing other minor benefits.

“Given the reasonably-projected net benefits of the project, the lack of substantial evidence that the PPA would produce net detriments, and a variety of environmental regulatory cost risks, including issuance by the U.S. Environmental Protection Agency of a Final Rule regulating carbon dioxide emissions for the first time, the PPA is required by public convenience and necessity,” the PSC order states.

In addition, the order states, “The project lowers the economic costs traditionally considered in the evaluation of utility PPAs for energy by supplementing EAI’s existing generation with clean renewable energy and capacity at a cost less than relying on the MISO marketplace over the life of the project; in addition, it reduces cost risks associated with environmental regulation.”

As part of the planning process for the project, Entergy Arkansas has entered into a power purchase deal with an affiliate of NextEra Energy Resources LLC, the developer of the solar facility and one of the country’s largest solar energy providers. NextEra will provide all of the energy and environmental attributes, including all renewable energy credits available from the project.

The Entergy agreement fixes the energy price for the 20-year term of the contract, which utility officials say will benefit Arkansas electric customers by providing $25 million in estimated savings on the terms of the deal. During the construction phase, NextEra Energy Resources expects to employ some 200 to 300 workers and anticipates contributions of nearly $8 million to Arkansas tax coffers.

Once in operation, Entergy’s renewable energy development in Stuttgart will surpass Aerojet Rocketdyne’s 12-megawatt facility at the Highland Industrial Park in East Camden as the state’s largest solar project. Gov. Hutchinson and top Aerojet Rocketdyne executives celebrated the dedication of that new solar facility on Sept. 10.

Glen Hooks, chapter director of the Sierra Club of Arkansas, praised the PSC’s approval of the solar power agreement as a historic moment for the state. In 2015, Hooks said, already four new utility-scale solar or wind projects have been proposed in Arkansas – a first for the state’s energy sector.

“Today’s project is a promising start. Moving toward renewable energy solutions just makes sense for Arkansas — we’ll create thousands of new jobs, clean up our environment, and improve public health,” said the Sierra Club director.