Entergy Arkansas inks deal with Sierra Club, others to shutter aging coal, natural gas plants

Entergy Arkansas on Friday (Nov. 16) inked an historic agreement with the Sierra Club and other environmental groups to shutter the utility’s decades-old coal-fired plants and an aging natural gas-generated facility, and replace the fossil-fuel resources with modern and cleaner power options.

Under the agreement, Entergy Arkansas will end the use of coal at its sprawling White Bluff and Independence power plants in Jefferson and Independence counties, respectively. The White Bluff plant near Redfield will be closed by 2028, while the Independence Steam Electric Station will be shut down two years later.

In addition, the utility would also retire its Lake Catherine natural gas-powered facility by 2027. Both Independence and White Bluff, which has one of the tallest chimney stacks in the world, came online in the early 1980s. The Lake Catherine facility was first commissioned in 1950, but later updated in 1970.

“These generating units in Arkansas, and our employees who work there, have been an important part of Entergy Arkansas for approximately four decades,” said Laura Landreaux, president and CEO of Entergy Arkansas. “This agreement allows for a reasonable transition to new energy resources by extending the life of the plants and associated jobs for another nine to 12 years while preparing for the future.”

The deal will allow Entergy Arkansas and other Entergy Corp. affiliated subsidiaries and sister companies to settle a longstanding federal lawsuit with the Sierra Club and the National Parks Conservation. The pact also resolves multiple other challenges to federal and state Clean Air Act regulations intended to protect the air in national parks, wilderness areas and wildlife refuges across Arkansas and surrounding states.

“Sierra Club is pleased to conclude our legal disputes with Entergy Arkansas and to reach a long-term agreement to stop burning coal at the old White Bluff and Independence power stations,” said Glen Hooks, director of the Sierra Club’s Arkansas chapter. “Families, small businesses and Fortune 500 companies across Arkansas are demanding renewable energy, and retiring these old plants is an important step to transform our electric grid and attract new businesses.”

SIERRA CLUB LAWSUIT
In the original lawsuit filed in the U.S. District Court for the Eastern District of Arkansas in Little Rock, the Sierra Club and other groups alleged that Entergy illegally modified the White Bluff and Independence plants without a permit, in violation of the U.S. Environmental Protection Agency’s (EPA) Clean Air Act.

Nearly two years ago, the EPA released a final draft of its plan to help Arkansas and Missouri meet Clean Air Act requirements to cut about 68,500 tons of dirty sulphur dioxide emissions per year and 15,100 tons of smog-like nitrogen dioxide per year. That plan was meant to better protect national parks and refuge areas from hazy conditions, and provide other health and environmental benefits. That proposal, however, rejected a portion of the state Department of Environmental Quality’s (ADEQ) haze plan, called Best Available Retrofit Technology, or BART. The EPA said the BART plan should have made “reasonable progress” toward protecting the Arkansas Buffalo National River, Ouachita National Forest and Caney Creek wilderness area from haze and the harmful effects of pollution. The proposed guidelines also address “downwind” haze problems from the Entergy power plants and factories that cross state lines. ADEQ is reviewing the Entergy-environmental group agreement.

The EPA’s final 360-page proposal, called the Federal Implementation Plan (FIP), relied heavily on the state’s BART evaluations, but went several steps further by establishing goals, deadlines and long-term strategies that meet the EPA’s “reasonable progress” mandate.

For example, the EPA plan limited emissions and five-year compliance schedules for stationary pollution sources across the state, including putting scrubbers, or pollution control devices, on nine smokestacks at six of the state’s largest power plants and factories in control to limit ozone and carbon dioxide emissions. It also put the White Bluff and Independence power plants on the EPA’s list for possible shutdown of existing power plants by 2030.

In response to the federal plan, then-Entergy Arkansas CEO Hugh McDonald proposed what he called “a more reasonable, long-term, multi-unit approach to address Arkansas’ regional haze” in response to the federal EPA’s rejection of the state’s earlier plan. However, the Sierra Club filed a motion for summary judgment in U.S. District Court alleging the EPA neglected its duties to create and finalize a plan to reduce regional haze in the state’s wilderness areas. In the court filing, Sierra Club officials argued the EPA was obligated to issue a federal plan within two years of disapproving the ADEQ’s plan.

RENEWABLE ENERGY MIX
In addition to the decade-long plan to shut down two of Arkansas’ oldest power plants, Entergy Arkansas’ agreement also calls for the utility to switch over to a cleaner, low-sulfur burning coal by 2021 and keep its options open for development of cleaner power resources at those sites in the future.

The Arkansas utility, a subsidiary of New Orleans-based Entergy Corp., also said it will go before the state Public Service Commission by 2022 to seek approval of 800 megawatts of renewable generating sources. By 2027, Energy Arkansas said it also will ask state regulators to approve another 400 megawatts of renewable power, including 181 megawatts of solar power already in the utility’s Arkansas portfolio.

The agreement fashioned by the state’s largest electricity provider and Landreaux, who replaced Rick Riley as Entergy’s top Arkansas executive in June, dovetails with the recent strategy outlined by Entergy Chairman and CEO Leo Denault to transition the hybrid power generator to a “pure-play” utility operator with one of the nation’s cleanest generating fleets. Denault this summer suggested the utility would cease all coal-fired operations at the two coal-fired units in 2027 and 2028.

“It would be much more efficient – from a reliability and cost standpoint, a capital standpoint, and an environmental standpoint – to replace them with natural gas if we got to the point where we had to install new systems,” said Denault, adding that the low price of natural gas was leading the company to invest more capital into new gas-fired projects instead of coal-fired plants, which in some cases are over 50 years old.

With more than 700,000 customers in 63 of Arkansas’ 75 counties, Entergy Arkansas recently made significant investments in renewable energy. In May, the Arkansas utility and NextEra Energy Resource held a grand opening for the largest universal solar energy project in Arkansas — the Stuttgart Solar Energy Center. That facility was built on 475 acres and includes more than 350,000 photovoltaic solar panels, with the capacity to generate 81 megawatts of electricity, or enough to power 13,000 homes. Construction was completed in eight months, and in the peak of construction, the project created more than 300 construction jobs.

Entergy, which delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi and Texas, has also decided to exit the merchant power business and sold most of its financially-strapped nuclear power fleet, which Denault said had been hampered by increased regulatory scrutiny and lower margins.

But Entergy is not alone. Despite the Trump administration’s efforts to prop up the coal industry and roll back Obama era clean air and climate change regulations, many top regulated U.S. utilities are shutting down older coal-and fossil fuel-fired power plants and making the transition to renewables, low-cost natural gas and other cleaner power options.

Just last week, Columbus, Ohio-based AEP, the parent company of Southwestern Electric Power Company in Northwest Arkansas, said it plans to invest $33 billion from 2019 through 2023 in its regulated business and renewables. At the same time, the nation’s largest electric utility has shut down or sold several aging coal and older natural gas-generation power stations across the Midwest.