The Arkansas Public Service Commission on Sept. 24 approved Entergy Arkansas Inc. (EAI) to enter into a power purchase agreement for an 81-MW solar project of Stuttgart Solar LLC.
“The PPA complies with the provisions of Act 1088 and is approved as in the public interest,” said the Sept. 24 order. The commission also in that order approved rate recovery for the costs of the PPA.
On April 14, EAI had asked the commission to issue an order that included: declaring that the legislative findings set forth in the Arkansas Clean Energy Development Act of 2012 and included in the Utility Facility and Environmental and Economic Protection Act, as well as the economics and efficiencies associated with the agreement, support the conclusion that the PPA is required by public convenience and necessity and is in the public interest; approving the terms and conditions set forth in the solar PPA as being in compliance with the requirements set forth in Act 1088 of 2015; and approving EAI’s recovery of the costs of the PPA over the term of the PPA through the Energy Cost Recovery Rate rider (Rider ECR).
This would be the first major solar facility built in the state of Arkansas. EAI, which is a subsidiary of Entergy Corp. (NYSE: ETR), noted in its application that with its passage of the Arkansas Clean Energy Development Act of 2012, the state General Assembly found that it is in the public interest to require all electric public utilities subject to the jurisdiction of the Arkansas PSC to consider clean energy and the use of renewable energy resources as part of any resource plan. Act 1088 provides that a utility cannot enter into a PPA for a term longer than five years, without a finding from the commission that, among other things, the cost of the PPA is reasonable and prudent.
On April 3, Entergy Arkansas executed a 20-year PPA with Stuttgart Solar LLC for the Stuttgart Solar Project, which will be located near Stuttgart, Arkansas. This is planned to be an 81-MW solar photovoltaic project interconnecting to the existing 115-kV Ricuskey-Almyra transmission line. Stuttgart Solar is an indirect wholly-owned subsidiary of NextEra Energy Capital Holdings, a subsidiary of NextEra Energy (NYSE: NEE).
The project will cover nearly 500 acres of land in Stuttgart and will be comprised of solar panels mounted to a racking system and cabled to intermediate field transformers, inverters and ultimately to a step-up transformer which is interconnected to the Entergy Transmission System.
The bulk of construction of the project is expected to begin in the spring of 2016, with engineering, procurement, and permitting occurring in 2015. The project is designed to qualify for the 30% federal investment tax credit (ITC) that will be used by the provider to offset its cost of construction.
H. Matt Wolf, the Manager, Resource Planning for Entergy Arkansas, said in April 14 supporting testimony about the long-term need for new capacity: “Before the solar PPA term expires (approximately 2036), it is possible that EAI will retire some or all sources of coal generation (1031 MW), retire its Lake Catherine 4 gas fired generator (516 MW), decommission the ANO 1 nuclear unit (834 MW), retire the Hot Spring and Ouachita CCGT units (1,085 MW) and, retire the UPP PB2 (495 MW) should it be approved. No decision has been made to deactivate or retire any of those resources, and the possibility of those retirements is based merely on nominal life expectancies, the current license expiration date of ANO 1, and proposed environmental compliance rules and regulations. Nonetheless, the uncertainties are real, and the magnitude of such uncertainty warrants taking steps now to address those potential future planning issues. Stuttgart Solar will help the Company meet the future needs of its customers.”