Governor Ushers In Stuttgart Solar; PSC Chief Sees Contract as Template

Governor Ushers In Stuttgart Solar; PSC Chief Sees Contract as Template
Gov. Asa Hutchinson, Entergy Arkansas Inc. CEO Rick Riley and others at the commissioning of the Stuttgart Solar Energy Center in Almyra (Arkansas County). (Entergy Arkansas Inc.)

Gov. Asa Hutchinson traded his Nascar starter's flag for an oversized ceremonial light switch on Tuesday, helping to commission Arkansas' largest solar power generation facility, a $100 million array of 350,000 photovoltaic panels outside Stuttgart.

Hutchinson, the ceremonial starter at the Coca-Cola 600 over the weekend at at Charlotte Motor Speedway in North Carolina, ceremonially started the flow of renewable power Tuesday from the Stuttgart Solar Energy Center, a 475-acre site near Almyra that sprang from the dusty fields of the Grand Prairie last summer.

"This weekend I went to my first Nascar race, and it was my job as honorary starter to wave the flag," the governor joked to dozens of spectators and dignitaries, including the all three members of the Arkansas Public Service Commission. "Everybody warned me not to drop the flag, I was so nervous. So I'm glad we're doing something maybe a little easier but just as colorful here, flipping the switch."

Moments later, as fluffy cumulus clouds framed the real star of the moment, the blazing Arkansas County sun, Hutchinson joined local leaders and the chiefs of the two companies partnered in the Stuttgart Solar project, CEO Rick Riley of Entergy Arkansas and CEO Armando Pimentel of NextEra Energy Resources, at the silver-levered switch. After a countdown, they flipped it to the blare of "Start Me Up" by the Rolling Stones, marking the initiation of a 20-year power purchase agreement between Entergy, the state's largest investor-owned electric utility with some 700,000 customers, and NextEra, of Juno Beach, Florida, its partner in a even bigger solar facility — 100 megawatts — being built near Lake Village in Chicot County.

"Armando, I hope you'll spread the word to everybody in Florida that Arkansas is an easy place to do business," Hutchinson said in response to Pimentel's praise for the state's efficiency in the permitting and site preparation process. "That's an important reputation for the state to have, and I'm grateful that you found that to be the case."

The solar energy center has an 81-megawatt capacity, enough to power 13,000 homes. Hutchinson said that while solar generation makes up only a tiny fraction of Entergy's capacity, the utility has long used diverse power sources to create electricity, including Nuclear One in Russellville, many hydroelectric dams, coal plants and facilities that burn cheap natural gas to generate power.

"One of the things that I do as governor is recruit industry to the state," Hutchinson said in prepared remarks. "I've been all around and I know, particularly in Europe, if you're going to recruit investment in the United States and you want to compete, you better have sources of clean energy. This gives us another talking point. We can say yes, we have a solar farm that is part of our energy mix, and it may continue to grow. But that reliability, that diversity, that clean energy supply will be a great talking point in recruiting industry to our state that we will continue to focus on."

The Stuttgart project began producing power last October, with NextEra selling the electricity on the energy market until its contract with Entergy officially commenced. A NextEra subsidiary will own and operate the sun farm. While the price Entergy will pay for the power is kept confidential by the PSC, it will be by design lower than the "system-average cost" for all of MISO, the nonprofit regional transmission organization that bundles the facilities of many utility companies into a single large transmission system and oversees the grid as well as a single energy market for customers in more than a dozen mid-American states and Manitoba, the Canadian province.

Arkansas PSC Chairman Ted Thomas laid out the way the Entergy's contract works with NextEra, a publicly traded company that's the largest wind and solar generation group in North America. Thomas' two counterparts on the state regulatory commission, Elana C. Wills and Kimberly A. O'Guinn, were also on hand at the event, where dust swirled and crop-dusting airplanes buzzed over fields of soybeans and rice. 

"Normally a utility invests its own money and gets a rate of return on that," Thomas said. "But a 2015 law allows Entergy to make earnings based on its contract. They make less because they have less risk, because they're not the owner. What the contract basically was is that they can beat the MISO energy price, which is kind of a proxy for the system average cost for all of MISO, then whatever they beat the price by, 80 percent of that goes to ratepayers and 20 percent to them [Entergy]. Of course if NextEra couldn't make a dollar, the thing wouldn't be sitting here."

The approach aligns ratepayers' interests with Entergy's, Thomas said. "That gives them the incentive to negotiate the best price they can. We want this to be a template." He said the Chicot Solar plant will operate under the same kind of arrangement. "It's a deal under this template as well. If you can follow this, you don't have to wonder if your project is going to be approved. We want developers and utilities to know that if they fit in this box, they're going to be good to go."

An estimated $110 million project, the Chicot County array will cover more than 800 acres in far southeast Arkansas with several hundred thousand solar panels. It's the second big partnership between Entergy and NextEra, and it may not be the last.

Pimentel, the NextEra chief, complimented Arkansas County, which was represented by County Judge Thomas Best and by Bethany Hildebrand, CEO and executive director of the Stuttgart Chamber of Commerce. 

"This is the type of hometown that we like to build our projects in," Pimentel said after his company presented checks of $5,000 each to a local summer bookmobile program and to Arkansas County's Grants to Educators and Teachers. "Arkansas County has been wonderful, and it helps bringing business into a state when you can count on efficiency in the process of construction and permitting. This project covers 475 acres with 350,000 solar panels with the capacity of 81 megawatts. That's just a number, but it means providing 13,000 homes with low-cost clean renewable energy. Over it's life it will mean $8 million to Arkansas County, much of it for the schools, and at the height of construction there were 300 workers out here, most from the area. We were also able to rely on more than a dozen local vendors."

Riley, smiling broadly, hailed the solar facility as another gem in Entergy's generation portfolio. "Over our 105 years in business, Entergy Arkansas has generated power with sawdust, water, coal, oil, natural gas, nuclear, and now the sun," Riley said. "Through this investment with NextEra Energy Resources, we are further diversifying our power generation resource mix and providing Entergy Arkansas customers with access to additional clean, renewable and affordable energy."

Hildebrand called the project an exiting boon to Arkansas County. 

"We are already seeing the project's impacts in Arkansas County through new jobs and school funding," she said. "We are thrilled to host the state's largest solar facility and know it will continue to provide benefits to our community."

NextEra and its affiliated entities provide more than 19,000 megawatts of energy generation capacity in 32 states and Canada. Entergy owns and operates power plants providing about 30,000 megawatts of power, delivering electricity to 2.8 million customers in Arkansas, Louisiana, Mississippi and Texas. It has annual revenue of about $11.5 billion and employs more than 13,000 workers.

Hutchinson, who was about a half-hour late to the commissioning event, stepped from the reception tent into the bright sunlight. "I've been to a lot of openings over the years, but before this, I've never flipped a switch."