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Entergy Arkansas at an Energy Crossroads (Xochitl Delgado Solorzano Commentary)

4 min read

Our state’s largest electric utility, Entergy Arkansas, is currently deciding how it will power its customers over the next 20 years. Will Entergy Arkansas choose affordable, reliable and clean energy like solar and wind? Or will it choose to build dirty, fracked gas power plants that will worsen climate change while saddling ratepayers with risky assets and volatile energy prices? Entergy is at a crossroads. Leo Denault, the CEO of Entergy Corp., the parent company of Entergy Arkansas, needs to choose the path of clean energy because it will grow our economy and mitigate the worst impacts of climate change while improving our air, water and public health.

The Arkansas Public Service Commission regulates electric utilities like Entergy Arkansas. As part of its monopoly status, Entergy Arkansas must submit an “integrated resource plan” to the PSC every three years, demonstrating how it will meet energy demand over the next 20 years. Stakeholders like the Sierra Club regularly engage in the energy-planning process and this year asked Entergy Arkansas to provide a request for proposal for all energy sources in order to get real-world cost estimates on different types of energy rather than using assumptions — a request that Entergy denied. The Sierra Club also asked the utility to evaluate public health impacts based on different energy resources, which it has agreed to explore.

This integrated resource plan is critically important because Entergy Arkansas will stop burning coal by 2030 thanks to a settlement that was recently approved with the Sierra Club and the National Parks Conservation Association. However, the utility’s commitment to a sustainable future will be short-lived if it chooses to invest in new dirty power plants that burn methane, which, pound-for-pound, is a more potent greenhouse gas than carbon dioxide. Methane escapes into our atmosphere throughout the fuel cycle, from fracking gas to pipeline leakage during transportation to power plants.

To help avoid building a fracked gas plant, the most conservative, clean, affordable and reliable way to meet energy demand is through efficiency. This is an area in which we encourage Entergy Arkansas to prioritize its investments. More air is needed to keep a leaky tire inflated. The same is applicable to leaky buildings and energy generation. We need Entergy Arkansas to make smart investments while supporting policies that unleash efficiency and renewable energy, along with the associated benefits for all Arkansans. A sustainable future and investing in new power plants that burn methane are incompatible.

It’s not just environmentalists who are raising the alarm about coal and gas — it’s also the investment community. Investments in new gas plants are far more risky than a mix of clean energy and battery storage. Banks like Citigroup Inc. and JPMorgan Chase and investment firms like BlackRock Inc. and Vanguard Group Inc. are increasingly focused on environmental, social and corporate governance considerations. Growing concerns about climate change impacting the global economy have led businesses to restrict investments first in coal, and gas is next.

To reach net zero emissions by 2050, a new report released by the International Energy Agency concludes, we cannot develop new oil or gas fields. New federal laws in the near future could mean that investments in new gas power plants would lead to decreased capacity or early retirement, meaning customers would be on the financial hook for the cost of a power plant that’s operating at limited or zero capacity.

Not only should Entergy Arkansas avoid risking its customers’ money on new gas-fired plants, the polar vortex in February demonstrated that price volatility for the fuel is unpredictable and could skyrocket at any time when demand exceeds supply. Wind, solar, battery storage and energy efficiency have predictable prices because there are no fuel costs. All of these reasons point to the urgent need for Entergy to avoid building a new gas plant.

The booming clean energy economy in Arkansas is a true success story, and there is still a lot of room to grow. The energy investments that Leo Denault approves today will determine whether our state thrives or falls further behind. We encourage Entergy Arkansas to accelerate its investments in renewable energy, battery storage and energy efficiency.

The Sierra Club works toward a just, equitable and sustainable future built on a foundation of racial, economic and gender equity — where all people benefit from a healthy, thriving planet and a direct connection to nature. The choices Entergy Arkansas makes now will shape our state’s direction and the health of our planet for decades to come.

Xochitl Delgado Solorzano is a volunteer state board member for the Arkansas Sierra Club.
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