Power Balance Shifting In Arkansas: Coal Crucial But Losing Ground


King Coal isn’t dead, but it’s being dethroned as the top fuel source for creating electric power in Arkansas.

“Out of favor is probably a good term” for coal’s status, Entergy Arkansas’ Kurt Castleberry said this month, noting market forces and growing environmental awareness among consumers that have made lower-emission natural gas-fueled generation and renewable sources like wind and solar a bigger part of the mix.

“We’re not planning to build any new coal plants, but our existing coal plants still have life in them, and they’re economical, large-scale, and clean,” said Castleberry, Entergy Arkansas’ director of resource planning and market operations. “We’ll run them until their useful life expires.”

Entergy, the state’s largest electric utility with more than 700,000 customers, has seen coal fall from generating 20 percent of its power to less than 4 percent over the past few decades, partly a result of the utility’s continued reliance on its durable and emissions-free nuclear workhorse, Arkansas Nuclear One. That plant, in Russellville, carries some 70 percent of Entergy’s load.

The state’s not-for-profit electric cooperatives took 54 percent of their power from coal last year, including a share from their part ownership of Entergy’s coal plants in Independence and Jefferson counties, as well as 50 percent of the Flint Creek plant near Gentry and 11 percent of the John Turk plant near Hope, Arkansas’ newest coal plant.

Southwestern Electric Power Co. of Shreveport, which serves nearly 120,000 customers in western Arkansas, gets 45 percent of its generation from coal, including power from the 624-megawatt Turk plant, opened in 2012.

The U.S. Energy Information Administration expects natural gas generation to rise to 34 percent nationally by 2019, up from 32 percent in 2017. Coal’s share, 30 percent in 2017, is expected to be 27 percent in 2019. Renewables outside hydropower are foreseen at more than 10 percent this year and nearly 11 percent next year. Hydropower should stay at about 7 percent.

But coal presents environmental and regulatory worries as the costs of renewable energy and natural-gas fired power have fallen, utility officials say.

“No new coal, I think we can make that declaration,” said Andrew Lachowsky, vice president of planning and market operations for Arkansas Electric Cooperative Corp., echoing Castleberry.

Castleberry and Lachowsky responded to an Arkansas Business survey of the state’s electric power generation sources, providing numbers that show coal losing market share. And what’s more telling, no new coal plants are being planned.

Arkansas Electric Cooperative Corp., wholesale power provider for the state’s 17 electric distribution co-ops, has invested in significant wind power resources from Oklahoma and Kansas, and investor-owned Entergy is buying power from one large-scale solar array near Stuttgart and awaiting completion of a similar 100-megawatt plant in Chicot County that could power the equivalent of 16,000 homes.

Going With Wind
AECC, which delivers wholesale power that ultimately serves some 500,000 Arkansas houses, farms and businesses, has reached an agreement to buy power from a 100-megawatt solar farm being built near Crossett (Ashley County), where solar panels will cover a square mile of ground.

They’re also in a deal for 100 megawatts of new wind power from Pushmataha County, Oklahoma, where Wildhorse Wind Energy LLC is building 29 wind turbines expected to begin commercial operation at the end of next year. This project will add to AECC’s current wind portfolio of 374 megawatts

Entergy corporate executive Rick Riley, who was CEO of Entergy Arkansas until June, discussed the utility’s resource mix in an interview with Arkansas Business last year. “Nearly 70 percent of Entergy Arkansas’ power comes from emissions-free nuclear, and we have a very clean generation mix,” said Riley, who became senior vice president of distribution operations and asset management at parent company Entergy Corp. in New Orleans.

“Gas-fueled sources provide 24 percent of Entergy Arkansas’ resource portfolio, including power from Hot Spring Energy Facility, a 620-megawatt natural gas unit in Malvern that Entergy bought for $253 million in 2012.”

It gets other gas-fueled power from MISO, the regional transmission organization that Entergy joined in late 2013. MISO, which has its Southern headquarters in Little Rock, derives about half its power from coal sources, and 35 percent from natural gas.

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Arkansas’ co-ops expect their reliance on coal to dip below 50 percent within the next several years. While 2017 numbers show coal power at 54 percent and gas-fired energy at 18 percent of the co-op total, wind energy has soared to third in the mix at 10.5 percent, most purchased from Oklahoma wind farms, with more on the way. Hydro power from many Arkansas turbines provides close to 7 percent of co-op members’ power, followed by 0.45 percent from solar and biomass.

While the solar numbers are minuscule in the utilities’ totals — Nuclear One’s 2,000 megawatts dwarf the 200 megawatts from Entergy’s solar fields, for example — but they’re steadily growing.

“We have RFPs [requests for proposals] out now for more solar resources, and we’re looking to do these about every year,” Entergy’s Castleberry said. “They’re economic, and they’re right here next to our customers, as opposed to wind sources that are farther away.”

Today’s Power Inc., a Little Rock subsidiary of Arkansas Electric Cooperatives Inc., has installed small utility-scale solar projects for the state’s co-ops, other utilities and commercial accounts.

Over two years, TPI has built seven solar fields for Arkansas co-ops, most in the 1 megawatt range, and one in Oklahoma. It also built projects for Tyson Foods in Fayetteville, Husqvarna in Nashville (Howard County), South Arkansas Telephone Co. in Hampton and Ermco in Dyersburg, Tennessee.

Shale Fracking Revolution
The cheaper costs of renewables, coupled with low gas prices from a shale fracking revolution that tapped into a seemingly endless reserve of easily reached methane, show why utilities have taken new coal “off the table,” in Lachowsky’s words.

Regardless of the Trump administration’s enthusiasm, market trends and the big capital costs make building coal plants too expensive.

In fact, as part of a recent state plan to reduce regional haze and air pollution, Entergy will stop burning coal within 10 years at its White Bluff plant in Redfield (Jefferson County). The 1,480-megawatt coal-burning facility, built in 1980, has one of the world’s largest chimneys at 1,000 feet. Entergy hasn’t decided what will become of the site.

Entergy shares ownership of the Redfield plant and its other coal generation site, the Independence plant near Newark, with Arkansas Electric Cooperatives, which has a 35 percent share. The two Independence units, with a capacity of 1,700 megawatts, are some 35 years into an expected 50-year lifespan.

While many customers flipping a switch may give little thought to where their electricity springs from, some are demanding environmentally sound options.

Mel Coleman, CEO of North Arkansas Electric Cooperative in Salem, cited those concerns in announcing the co-op’s own 1-megawatt solar array, which broke ground last week.

Arkansans enjoy some of the cheapest retail electricity in the country, and utilities track every kilowatt and tap an unprecedented variety of fuel sources to keep rates low, officials say.

According to September numbers from the U.S. Energy Information Administration, Arkansas’ average retail electric rate of 9.99 cents per kilowatt-hour was the third cheapest in the U.S., trailing only Louisiana and Washington state. The national average was 13 cents.

Gas Looks Solid
“We want to provide economic and reliable power, and that’s the bottom line,” Castleberry said. “Our customers need to be served by a generation portfolio that’s diverse, and by that I mean you don’t put all your eggs in one basket. You need to have a little bit of all types of fuels and technologies.”

Lachowsky, despite his 28 years of experience, is always nervous predicting the future. “Once we think we have things figured out, they change,” he said. “But it seems like the whole world believes natural gas prices will stay reasonable, and if they do, the future looks good for natural gas and renewable resources.

“Before shale gas was discovered, there were periods of high natural gas prices. Now, with gas more affordable, coal and nuclear for new generation are totally off the table.”

Lachowsky said wind power has steadily become more affordable, “and most recently solar has become an economical part of the resource mix.”

AECC announced plans in March to buy up to 100 megawatts of power to be produced by the 800-acre solar farm in Crossett, which is being built by Renewable Energy Systems Americas Inc. of Colorado. The 362,000-panel solar project is expected to provide 175 jobs during construction, and to come online in 2021.

AECC President and CEO Duane Highley said at the time of the announcement that solar sources will give AECC “additional reasonably priced power,” and that AECC’s generation fuel portfolio “now includes more than 17 percent hydropower, solar, wind and biomass generation.”

AECC is in power-purchase deals to get 51 megawatts from the Flat Ridge 2 wind farm in Kansas, 65 megawatts from Oklahoma’s Chisolm View II wind farm, 150 megawatts from the Origin wind farm in southeastern Oklahoma, and 108 megawatts from the nearby Drift Sand wind farm.

It is also buying 4 megawatts from the Eco-Vista Landfill Biomass Generating Station in Springdale.

Some of the co-op members’ coal power comes from Flint Creek in Gentry, a project AECC owns 50-50 with Swepco, a unit of American Electric Power of Columbus, Ohio, which operates the plant.

Swepco and AECC committed $204 million apiece in 2016 to retrofit the 1978-vintage plant to comply with Environmental Protection Agency regulations.

“The upcoming Wildhorse (wind) and Crossett (solar) facilities will together contribute an amount equal to about 4 percent of our overall energy needs,” Rick Running, AECC’s manager of generation planning and economic studies, said in an email.

“When these ... are in operation the overall contribution of non-fossil energy is expected to be more than 21 percent.”

The state’s municipal power companies get their electricity from a variety of sources, and towns like Fayetteville and Clarksville have announced major commitments to solar and other renewable power. Fayetteville plans to use 100 percent renewable power for city operations by 2030.

Clarksville Light & Water Co. partnered with Scenic Hill Solar of Little Rock, led by former Lt. Gov. Bill Halter, to install an $11 million, 7-megawatt project.

“It’s a very powerful economic development incentive to be able to supply companies and cities with 100 percent renewable energy,” Halter said. “We know there are big names who desire that, from Google to Amazon, and Walmart has a big sustainability goal, as everyone knows. Clarksville had real foresight to say they’re going to market this to businesses they are recruiting.”

 

In Electricity’s Future, Sun Power Relayed by Battery, and Meters Talking Back


Stuttgart Solar, which provides 81 megawatts to Entergy Arkansas through a power-purchase deal, is the largest solar farm in Arkansas, though more are being built.

Kurt Castleberry has no crystal ball, but he routinely looks 20 years into the future. What he sees ahead is a lot of sunshine, batteries and advanced metering technologies in the utility industry. Soon, he says, Entergy Arkansas, where he is director of resource planning, may harvest the sun’s power at midnight and tap aggregated energy from customers’ home- and business-based generation sources at the push of a button.

“We plan two decades ahead, staking out our points of view on different technologies that might add to our portfolio,” he said, noting that he’s been surprised before.

“Five years ago, solar didn’t pass the laugh test, and now it’s an economic resource,” particularly while federal investment tax credits still apply.

“Storage, batteries, have been going down [in price] quickly as well. Before long that’ll be a big part of our portfolio: You marry a battery with a solar farm, because the last time I checked the sun doesn’t shine at midnight.”

Batteries charge as the sun shines, “and then you discharge them when the sun’s not available, and that’s pretty sweet,” he said.

Entergy’s Advanced Metering Infrastructure future is now. Communications and IT work has been going on for two years, and network equipment started going up on power poles this month. The meters themselves will be installed starting next year.

New online tools will help customers better track and manage their electricity use, and Entergy will be able to answer billing questions more quickly and effectively. It also will see the power grid more clearly in real time, hastening outage repairs, officials said. The key is two-way communication. Each meter has a network radio to transmit readings to a nearby power pole, where equipment will relay data to Entergy through a secure cellular network. Entergy will be able to send its own signals back.

“We’re going to be able to make distributed energy resources part of our portfolio,” Castleberry said.

“These might be solar panels on a customer’s roof, or generators that provide backup power for homes and businesses. If 10,000 backup generators are out there, they could be aggregated together to come up with a lot of power to serve everybody. The customers would want to allow this because they would be compensated. And that’s just one example.”>


Arkansas’ Largest Power Plants by Fuel Source, Capacity

Plant Name Location Capacity Ownership Opened
COAL
Independence Newark 1,700MW Entergy, Arkansas Electric Cooperative Corp. 1983-84
White Bluff Redfield 1,659MW Entergy, AECC 1980-81
Plum Point Mississippi County 665MW NAES Corp. 2010
John W. Turk Jr. Fulton 624MW American Electric Power/Swepco 2012
Flint Creek Gentry 528MW AEP/Swepco 1978
         
NUCLEAR
Arkansas Nuclear One Russellville 1,824MW Entergy 1974
         
HYDROELECTRIC
Bull Shoals White River 340MW Southwestern Power Administration 1953
Dardanelle Arkansas River 140MW Southwestern Power Administration 1965
Beaver Lake Dam White River 112MW Southwestern Power Administration 1965
Dumas Arkansas River 103MW AECC 1999
Ozark Arkansas River 100MW Southwestern Power Administration 1973
         
NATURAL GAS
Union El Dorado 2,200MW Entergy 2003
Lake Catherine Malvern 721MW Entergy 1953-70
Magnet Cove Magnet Cove 660MW AECC (acquired 2012) 2006
Hot Spring Malvern 620MW Entergy 2012
Harry L. Oswald Wrightsville 548MW AECC (acquired 2006)  
         
NATURAL GAS/PETROLEUM
Dell Mississippi County 679MW Associated Electric 2007
Pine Bluff Energy Pine Bluff 236MW Calpine Energy Services 2001
Jonesboro Jonesboro 224MW City Water & Light 2003-07
John L. McClellan Camden 134MW AECC 1971
Carl E. Bailey Augusta 122MW AECC 1966
         
SOLAR PHOTOVOLTAIC
Stuttgart Solar Arkansas County 81MW NextEra, serving Entergy 2017
Aerojet/Rocketdyne East Camden 12MW Silicon Ranch Corp. 2016
Clarksville Municipal Clarksville 6.5MW Scenic Hill Solar, serving Clarksville Light & Water 2017
         
SOLAR UNDER CONSTRUCTION
Chicot Solar Project Lake Village 100MW NextEra, serving Entergy 2020
Crossett Solar Crossett 100MW Renewable Energy, serving AECC 2021

Entergy Arkansas Generation Sources

Entergy Arkansas, the state’s largest utility, is an investor-owned power generation and distribution company and a descendant company of Arkansas Power & Light Co. It owns or co-owns eight generation plants in Arkansas, most notably Arkansas Nuclear One in Russellville, which has two units and generates some 69 percent of the energy used by Entergy’s 700,000 Arkansas customers.


Arkansas Nuclear One
Two units in Russellville, 1974 and 1980.
100 percent owned by Entergy Arkansas.
Fuel source: Nuclear.
Capability: A combined 1,823 megawatts


Carpenter Hydro
Hot Springs, 1932.
100 percent owned by Entergy Arkansas.
Fuel source: Hydro.
Capability: 30 megawatts


Hot Spring Energy Facility
Malvern, 2002.
100 percent owned by Entergy Arkansas.
Fuel source: Natural gas.
Capability: 606 megawatts


Independence Steam Electric Station
Two units in Newark, 1983-1984.
31.5 percent owned by Entergy Arkansas, 25 percent owned by Entergy Mississippi, 35 percent owned by Arkansas Electric Cooperative Corp.
Fuel source: Coal.
Capability: 1,678 megawatts


Lake Catherine
Malvern, 1970.
100 percent owned by Entergy Arkansas.
Fuel source: Natural gas.
Capability: 528 megawatts


Ouachita
Sterlington, Louisiana, 2002.
100 percent owned by Entergy Arkansas.
Fuel source: Natural gas.
Capability: 903 megawatts


Remmel
Malvern, 1925.
100 percent owned by Entergy Arkansas.
Fuel source: Hydro.
Capability: 4 megawatts


Union
El Dorado, 2003.
100 percent owned by Entergy Arkansas, Entergy New Orleans and Entergy Louisiana.
Fuel source: Natural gas.
Capability: 2,200 megawatts


White Bluff Steam Electric Station
Redfield, 1980-1981.
57 percent owned by Entergy Arkansas, 35 percent owned by Arkansas Electric Cooperative Corp.
Fuel source: Coal.
Capability: 1,659 megawatts


AECC Power Generation Sources

Arkansas Electric Cooperative Corp., which serves the state’s 17 electric distribution cooperatives, has nearly 4,300 megawatts of generation capacity through plants it owns or co-owns and via power-purchase agreements from other resources, including hydroelectric power, wind power and solar energy. AECC has three natural gas/oil plants and owns part of four coal-based power plants in Arkansas. Here are its generation resources:


Carl E. Bailey Generating Station
Augusta, 1966
100 percent owned by AECC.
Fuel source: natural gas with fuel-oil backup
Capability: 122 megawatts


Carl S. Whillock Hydroelectric Generating Station
Morrilton, 1993
100 percent owned by AECC.
Fuel source: Arkansas River
Capability: 32 megawatts


Clyde T. Ellis Hydroelectric Generating Station
Barling, 1988
100 percent owned by AECC.
Fuel source: Arkansas River
Capability: 32 megawatts


Electric Cooperatives of Arkansas Hydropower Generating Station
Dumas, 1999
100 percent owned by AECC.
Capability: 102 megawatts


Elkins Generating Station
Elkins, 2010-2012
100 percent owned by AECC.
Fuel source: Natural gas
Capability: 60 megawatts


Flint Creek Power Plant
Gentry, 1978
50 percent owned by AECC; 50 percent owned by SWEPCO and its parent company, American Electric Power.
Fuel source: Coal
Capability: 528 megawatts


Fulton CT1 Generating Station
Fulton, 2001
100 percent owned by AECC.
Fuel source: Natural gas
Capability: 153 megawatts


Harry L. Oswald Generating Station
Wrightsville, 2003
100 percent owned by AECC.
Fuel source: Natural gas
Capability: 548 megawatts


Independence Steam Electric Station
Newark, 1983 and 1984
35 percent owned by AECC; majority owned by Entergy Arkansas.
Fuel source: Coal
Capability: 1,678 megawatts


John L. McClellan Generating Station
Camden, 1971
100 percent AECC owned.
Fuel source: Natural gas, fuel-oil backup
Capability: 134 megawatts


John W. Turk Jr. Power Plant
Fulton, 2012
AECC owns 12 percent of the plant; SWEPCO is majority owner at 73 percent.
Fuel source: Coal
Capability: 624 megawatts


Magnet Cove Generating Station
Malvern, acquired by AECC in 2006
100 percent owned by AECC.
Fuel source: Natural gas
Capability: 660 megawatts


Thomas B. Fitzhugh Generating Station
Ozark, 1963 (expanded 2003)
100 percent owned by AECC.
Fuel source: Natural gas, with fuel-oil backup
Capability: 165 megawatts


White Bluff Steam Electric Station
Redfield, 1980-1981
35 percent owned by AECC; majority-owned by Entergy Arkansas.
Fuel source: Coal
Capability: 1,659 megawatts

Power Purchase Agreements

Flat Ridge 2 Wind Farm
Harper, Kansas
Fuel source: Wind
Capability: 51 megawatts


Chisolm View II Wind Farm
North-central Oklahoma
Fuel source: Wind
Capability: 65 megawatts


Drift Sand Wind Farm
Southeast Oklahoma
Fuel source: Wind
Capability: 108 megawatts


Origin Wind Farm
Southeast Oklahoma
Fuel source: Wind
Capability: 150 megawatts


Southwestern Power Administration
Springfield, Missouri
Fuel source: Hydro
Capability: 193 megawatts


Eastman Cogeneration
Texarkana
Fuel source: Natural gas
Capability: 170 megawatts


Eco-Vista Landfill Biomass Generating Station
Springdale
Fuel source: Biomass
Capability: 4 megawatts


Ozarks Electric
Springdale
Fuel source: Solar
Capability: 1 megawatt.


Arkansas Valley Electric
Ozark
Fuel source: Solar
Capability: 0.5 megawatts


Independence
Newark
Fuel source: Coal
Capability: 8.5 megawatts


Plum Point
Osceola
Fuel source: Coal
Capability: 20 megawatts


First Electric
Benton
Fuel source: Solar
Capability: 1 megawatt.


Ouachita Electric
Camden
Fuel source: Solar
Capability: 1 megawatt.


Silicon Ranch
East Camden
Fuel source: Solar
Capability: 13.5 megawatts