The Arkansas Public Service Commission gave its blessing Wednesday to Central Arkansas Water’s plan to draw power from a large project with Scenic Hill Solar of North Little Rock.
The 4.8-megawatt solar array will go up on land in Cabot owned by the water company, with construction beginning in January and expected to be completed late next year.
The 12,300-module project’s regulatory clearance, which Scenic Hill CEO and former Arkansas Lt. Gov. Bill Halter described as a breakthrough, is Arkansas’ first for a net metering facility with a capacity above 1,000 kilowatts.
“It’s a big event when the first one is approved,” Halter told Arkansas Business, especially since, he said, Entergy Arkansas, the state’s largest electric utility, has been “seeking to restrict these projects and seeking through a number of methods to restrain customers.
“A ruling in favor of this project,” he added, “is a ruling in favor of all Arkansas ratepayers.”
Net metering is the accounting system that gives utility customers with renewable generation systems credit for the power they put onto the electrical grid. And with Wednesday’s ruling approving the water utility’s construction application, CAW became the state’s first nontaxed entity cleared to partner with a solar contractor under provisions of Arkansas’ Act 464 of 2019, also known as the Solar Access Act.
That law allowed nonprofits, schools, counties, cities and water districts, among others, to engage in so-called third-party deals. The public entity generally reaps cheaper electricity while the solar developer takes advantage of investment tax credits.
CAW officials said the project is sustainable and clean, and will save customers $7 million over the 30 years of the contract, if you count the 20-year deal and its two five-year options to extend.
Under the deal, Scenic Hill will build, own and operate the solar plant, selling power to the water utility at 5.1 cents per kilowatt-hour, about half of Arkansas’ average retail rate for residential power.
“This is the first power plant bigger than one megawatt that the commission has approved for net metering after Act 464,” Halter said. “We expect the PSC will approve many more such projects, and that they should be approved.”
The project, scheduled to start construction in January, will infuse $7 million into the central Arkansas economy, Halter said. “Central Arkansas Water owns the land the project is to be built on in Cabot, and we’ll lease that land.”
Tad Bohannon, the water utility’s CEO, called the solar facility “one part of CAW’s ongoing efforts to remain environmentally and economically sustainable for the benefit of customers we serve today and those we will serve in the future.”
CAW, which expects to see immediate savings once the power array is online, uses a substantial amount of power annually, Bohannon pointed out. He added that Scenic Hill “has been an outstanding adviser on this project, guiding CAW through unfamiliar and uncharted territory to obtain the first PSC approval of a net metering facility this size.”
CAW Water is the largest drinking water utility in Arkansas, serving almost 500,000 consumers in seven counties.
“We know that increased use of solar power improves the environmental sustainability of the utility and the communities we serve,” Bohannon said. “But utilizing solar power also reduces costs and improves the economic sustainability of the utility for the benefit of our ratepayers.”
Gary Moody, who leads Arkansas’ chapter of the Audubon Society, added to the cheers, saying the ruling ensures “that the Solar Access Act will be implemented as intended to provide the full benefit to consumers.”
“By reducing the amount of energy we waste and increasing our reliance on clean, local, renewable resources we protect Arkansas’s natural habitats and the birds that rely on them,” Moody said, keeping up his drum beat as a reliable advocate for solar and wind generation. “We can't fulfill our mission of protecting Arkansas’s birds without adding more clean energy, and this ruling is an important part of the solution.”
The new solar plant will produce enough clean electricity to satisfy about 20% of CAW’s current energy needs, soaking up sunshine with panels mounted on a single-axis tracking system. It will create enough juice to power almost 1,000 homes.
“This solar facility will not be CAW’s last,” Bohannon said in a statement. “CAW continues to explore additional ways to add solar power and other programs that improve CAW’s environmentally friendly operations.”