©2020 E&E Publishing, LLC
Republished with permission

In Batesville, Arkansas, just 17 miles west of the state’s largest coal-fired power plant, a solar array at the local high school is having an unconventional impact: boosting teachers’ pay.

In 2017, energy efficiency company Entegrity conducted an energy audit of the Batesville School District, which currently comprises Batesville High School and five other schools that serve roughly 3,200 students.

The Little Rock, Arkansas-based company found that the district’s annual utility bills surpassed $600,000, a steep sum for a school system that for years was strapped for cash — and struggled to retain teachers as a result.

But there was some good news.

The audit also revealed that the school district could save at least $2.4 million over 20 years if it outfitted Batesville High School with more than 1,400 solar panels and updated all of the district’s facilities with new lights, heating and cooling systems, and windows.

For Michael Hester, the Batesville superintendent, that eye-popping figure was reason enough to move forward with a comprehensive energy efficiency project.

“Let’s use that money to start pumping up teachers’ salaries,” Hester said in an interview. “It’s the way we’re going to attract and retain staff. And it’s the way we’re going to attract and retain students in this day and age of school choice.”

The project that resulted has helped slash the district’s annual energy consumption by 1.6 million kilowatts and in three years generated enough savings to transform the district’s $250,000 budget deficit into a $1.8 million surplus.

Just as Hester envisioned at the outset, a major chunk of the money is going toward teachers’ salaries — fueling pay raises that average between $2,000 and $3,000 per educator.

“Now we’re in the top quartile in the state,” Hester said.

No upfront costs, immediate savings

The schools in Batesville aren’t alone. At least 7,300 schools across the United States are using solar to save on utilities, introduce students to renewable energy and — in some cases — reduce their planet-warming emissions.

That’s according to a report by Generation 180, a nonprofit that advocates for clean energy and tracks the proliferation of solar through the U.S. public education system.

According to the group’s analysis, in 2019, 16% of U.S. school districts had installed a total of 1,337 megawatts of solar capacity. That means that about 5.3 million students now attend schools with solar, representing an 81% increase since 2014.

Also notable was the organization’s conclusion that if every U.S. public school used 100% solar power, the education system could drive emissions reductions that would be equivalent to closing 18 coal-fired power plants.

Standing in the way are several challenges such as policy roadblocks, financing complications and unease in some communities about opting for a nontraditional energy source.

According to Generation 180, 28 states and the District of Columbia have adopted policies to begin addressing those obstacles.

The policies do so by allowing solar development companies like Entegrity to use power purchase agreements to finance, build and maintain solar arrays on a customer’s property. The customer then pays the developer for the energy that the panels produce over a period of time — almost always at a lower rate than it would pay the utility.

Nearly 80% of solar capacity installed at U.S. public schools resulted from the arrangements that shift solar’s financial and logistical burdens onto professional energy companies, according to Generation 180.

“That means more than three-quarters of that solar on schools is not coming out of school budgets — it’s getting paid for by a developer who owns, installs and maintains the solar energy system,” said Tish Tablan, a Generation 180 program director. “So they’re seeing no upfront costs and immediate cost savings.”

In Arkansas, the Legislature didn’t pass its own version of that policy until March 2019. So the Batesville district’s array — which got off the ground earlier that same year — did not benefit from the financing mechanism. Instead, the district acquired the necessary funds through a $5.4 million bond.

The project nonetheless was successful, and it since has had a ripple effect on the surrounding region.

“There’s at least 20 school districts just in our area that have emulated our model,” Hester said. “We have the numbers to prove and to show from performance that we’re walking the walk. That’s a slam-dunk for districts around us.”

Rick Vance, who oversees Entegrity projects in Arkansas, Mississippi, Tennessee and Missouri, confirmed that the Batesville project — with the help of the recently adopted Solar Access Act — spurred a significant uptick in the number of nearby school districts considering solar.

“Batesville is in Independence County. So is Cedar Ridge and Midland and Southside. … All of them are doing solar, and they’re all doing it with us,” Vance said.

According to Tablan, that’s why Generation 180 advocates for solar in public schools. In many areas, educational facilities serve as influential community hubs. And that puts them in a position to “equip and inspire people to take action on clean energy in their own communities,” she said.

‘Pleasant surprise’

Hester said one of the more surprising outcomes of the energy efficiency initiative was the positive reaction from the Batesville community — which sits in the shadow of Independence County’s coal-fired power plant.

Nearly 30% of the Batesville area’s population is more than 60 years old, Hester said, which contributed to his initial uncertainty regarding how the community would feel about using taxpayer dollars to install solar at the local high school.

But Batesville residents were quick to notch their support of the initiative, Hester added, and they commended the district for doing its best to be efficient with their tax money.

Hester attributed that attitude, in part, to the reality that the nearby plant, which is run by Entergy Arkansas, is set to shut down by 2030.

“People know that that coal plant has a limited life,” Hester said. “It’s a loss of revenue; it’s a loss of jobs. There’s an anxiety about that.”

“So when this started showing how there are ways to help offset [those losses] and move on in alternative ways … it became a very pleasant surprise,” Hester added.

Vance said that in his work with Entegrity, he does encounter some resistance to solar. Many people have long-standing relationships with their local utilities, and renewable energy often is a new and unfamiliar concept.

But he added that it ultimately comes down to the savings, jobs and environmental benefits that solar can offer any community. He called it a “boomerang effect.”

“I’m in real rural parts,” Vance said. But, he added, “I get a lot of affirmative nods when I’m able to explain that solar is the cheapest way to produce power in the world right now. It beats coal; it beats gas — you know, all the fossil fuels that you would expect someone with a different mindset would be more into.”

Reprinted from Climatewire with permission from E&E News, LLC. E&E provides daily coverage of essential energy and environment news at www.eenews.net.

This Arkansas school turned solar savings into better teacher pay is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

©2019 E&E Publishing, LLC
Republished with permission

American Electric Power Co. Inc., one of the nation’s largest utility companies and highest-profile emitters, is facing yet another multibillion-dollar test to see how fast it can shift from coal to renewables.

This time, it looks like AEP might succeed.

A roughly $2 billion proposal in the works calls for AEP utilities to acquire three planned Oklahoma wind farms known as the North Central Energy Facilities. Settlement agreements are pending in Arkansas and Oklahoma, while proceedings continue in Louisiana and Texas.

But a multistate wind power proposal is never a given. Less than two years ago, AEP saw its $4.5 billion Wind Catcher plan in the same region fizzle. AEP’s new wind proposal is smaller and less controversial. Yet it’s also awakening concerns about the costs of renewable investments.

The company’s journey illustrates the challenge of trying to change a generation mix amid competing priorities from regulators, investors, landowners, environmental advocates and customers.

Key aspects of the current proposal compared with Wind Catcher: a smaller capacity, no big transmission element and wiggle room. Some states can take on more of the 1,485-megawatt North Central Wind plan if other states don’t agree to take part.

“I think they’ve definitely learned their lesson,” Andy Bischof, a senior equity analyst with Morningstar Research Services LLC, said of AEP and its utilities. “They’re taking a different approach.”

A 2018 report from M.J. Bradley & Associates LLC placed AEP third-worst among the top 20 private and investor-owned power producers for 2016 carbon dioxide emission rates. Ohio-based AEP has been making progress, though critics remain. The company said it cut CO2 emissions by about 59% from 2000 to 2018. Investments in renewables also can present a chance for new returns for utilities.

AEP’s coal-fueled generating capacity dropped from 70% in 2005 to 45% last year, according to a recent company presentation. It’s seeking to cut coal to a 27% share of capacity by 2030. Capacity for hydro, wind, solar and pumped storage is projected to climb from 17% in 2019 to 37% by 2030, AEP said.

In 2018, AEP’s Wind Catcher plan died when Texas regulators rejected a company plan to acquire Oklahoma wind generation and invest in transmission (Energywire, July 27, 2018). CEO Nick Akins said AEP was disappointed it couldn’t move ahead with a plan to lower power costs and provide more clean energy and diversity for customers.

With its new plan, AEP is projecting savings over time of about $3 billion for customers of two of its utilities — Public Service Co. of Oklahoma (PSO) and Southwestern Electric Power Co. (SWEPCO). Those two companies also were part of the Wind Catcher proposal, which AEP said could have provided savings of more than $7 billion, according to a 2017 news release.

Al Armendariz, a deputy regional director at the Sierra Club and a former EPA regional administrator, said he’s hopeful AEP’s North Central project goes ahead. But he said AEP remains a major coal-burning power company that made poor decisions to prolong the lives of some coal plants and invest in new coal generation.

In 2012, an “ultra-supercritical” generating unit fueled by coal began commercial operation in Arkansas as SWEPCO touted its stake in the 600-MW facility. That stands in contrast to AEP’s current move to other resources.

“We support the positive things AEP is doing,” Armendariz said recently, adding, “We continue to encourage them to do more.”

Past and future critics

AEP’s new plan isn’t a slam dunk. Opponents could still gain traction as the review process continues in various states. The Texas docket provides a glimpse of concerns, including comments from Golden Spread Electric Cooperative and Cities Advocating Reasonable Deregulation (CARD).

Golden Spread asked the Public Utility Commission of Texas to condition its approval on requiring SWEPCO to hold transmission customers in the region “harmless from subsidizing the costs of additional transmission” that could be needed as a result of the wind facilities. Scott Norwood, a consultant who testified on behalf of CARD, recommended various conditions if the Texas PUC were to approve the plan, including what he called “more favorable guarantee provisions” previously tied to Wind Catcher.

“Based on my concerns regarding the relatively low and uncertain forecasted benefits, and relatively high capital cost of the Project, I do not recommend approval of SWEPCO’s application,” Norwood said in filed testimony.

Alfred Herrera, an attorney representing CARD, said the group remains open to discussions with SWEPCO about what guarantees could help protect ratepayers.

Criticism foreshadowed doom for AEP’s Wind Catcher, although it’s too early to tell how much pushback the new plan may face.

AEP’s Wind Catcher plan called for acquiring a 2,000-MW wind farm in Oklahoma that Invenergy LLC was working on — with some 1,400 MW slated for SWEPCO and 600 MW tied to PSO. The plan also envisioned a 765-kilovolt power line, which would have run hundreds of miles in Oklahoma.

Critics of Wind Catcher argued there wasn’t a traditional need for it. DeAnn Walker, chairwoman of Texas PUC, indicated in 2018 she didn’t think there were sufficient safeguards for ratepayers in a proposal for decision.

AEP doesn’t refer to North Central as a second version of Wind Catcher. Peter Main, a SWEPCO spokesman, detailed differences between the proposals in a recent statement.

Size is one point — for SWEPCO, it’s about 810 MW, compared with about 1,400 MW under Wind Catcher. The current project also involves several facilities from competitive bidding as opposed to a single-source project, Main said. And they are near a PSO/SWEPCO transmission system, he said, so there’s not an extended generation tie line in the proposal.

“And the current proposal has more flexible provisions for regulatory approval,” Main said. “It is scalable to align with regulatory approvals by state, subject to commercial limitations. States that approve the project would have the ability to increase the number of megawatts allocated to them should another state or states reject the proposal.”

An AEP investor presentation says a minimum of 810 MW will be needed for the new project to go forward.

Armendariz said the Sierra Club is happy that AEP structured North Central so no single state or state commission “has a veto effectively over the entire project.” The hope, he said, is that all four states approve it eventually.

North Central is furthest along in two jurisdictions — Oklahoma and Arkansas, where pending agreements include guarantees on items such as a cost cap and net capacity factor, as well as eligibility for certain levels of production tax credits. The settlement proposals in those states include various parties, such as Walmart Inc. and the offices of the respective state attorneys general.

In the Sooner State, a settlement agreement is pending before the Oklahoma Corporation Commission.

Golden Spread had hoped the Oklahoma commission would consider the comments it made, but “we won’t stand in the way of the other parties reaching a settlement,” said Mary Coyne, a spokeswoman for the electric cooperative.

In the Natural State, a settlement agreement is pending at the Arkansas Public Service Commission.

In Louisiana, a case continues before the Louisiana Public Service Commission. State regulators there backed Wind Catcher in the past, so there’s reason to think North Central also could get approval.

In Texas, the case remains under discussion in a docket at Texas PUC.

“We continue to make progress in Louisiana and Texas [as] we work with the parties to demonstrate the guarantees and customer benefits of our wind proposal,” Main said.

It’s hard to know how things will shake out, especially in Texas. A group called Texas Industrial Energy Consumers has been peppering SWEPCO with questions on everything from potential returns related to North Central to whether AEP’s presented gas forecasts have been higher than actual prices over the last decade.

Walker, the Texas PUC chairwoman, filed a memo last year to change how a couple of questions were structured on the topics of potential benefits to — and protections of — customers.

Invenergy, the developer of projects tied to North Central, indicated it’s poised to move ahead once regulatory approvals are received. The three proposed wind sites are located in north-central parts of Oklahoma.

“The Sundance Wind Energy Center is targeted to begin operations in late 2020, while the Maverick Wind Energy Center and Traverse Wind Energy Center are both targeted to begin operations in late 2021,” Beth Conley, an Invenergy spokeswoman, said in a statement.

Carbon targets

AEP maintains its focus includes shifting to cleaner energy.

Melissa McHenry, an AEP spokeswoman, said the company has retired over 8,600 MW of coal-fueled generation since 2011. And some coal units were converted to natural gas, she said.

McHenry also sought to add context around the Turk plant in Arkansas that was completed in 2012, saying it was proposed “before fracking advances created today’s abundant supply of cheap natural gas and also before advances in renewable generation technologies made them cost competitive with other options.” It was “the right investment” for customers, she said, to ensure low-cost and reliable power.

She pointed to the Turk plant’s efficiency and said it was designed with space for a carbon dioxide capture and storage retrofit, if that becomes viable economically.

“We have set very ambitious emission reduction targets, given the composition of our generation fleet just a few years ago, but there … still are huge uncertainties about how technologies will evolve over the next few decades,” McHenry said.

By 2030, she said integrated resource plans for AEP propose to add over 7,700 MW of new wind and solar generation and more than 1,600 MW of new natural gas generation to the regulated portfolio. More coal unit retirements are planned in places such as Oklahoma, Texas, Ohio and Indiana.

“We’ve set a CO2 reduction target at 70% reduction in 2030 from our 2000 baseline and an 80% emission reduction from 2000 levels by 2050,” McHenry said. “We are confident we will exceed the 80% reduction by 2050, but when that happens and where emissions will be in 2050 will depend on a lot of factors.”

Armendariz said he’s not disappointed that AEP had to turn to a smaller proposal in North Central once Wind Catcher faltered.

“It’s still a substantial investment and a substantial amount of renewable energy,” he said. “I think we fully support it, and we’re pleased to see [AEP] move forward like this.”

Armendariz said “really robust renewable energy growth” continues in Texas and Oklahoma, with interest in solar development in Arkansas and Louisiana, as well.

Louisiana has been the source of controversy given a move in much of the state away from traditional net metering for residential rooftop solar after a decision by state regulators last year (Energywire, Oct. 11, 2019). Armendariz said the Sierra Club supports customer-owned generation while also being happy to see utilities invest in renewables. A mix of both will bring higher renewable energy penetration at the lowest possible cost for consumers, he said.

“We think customer-owned generation is going to be a key part of gradually getting off of fossil fuels,” he said. “But we also think utility-owned renewable energy … has a big role to play, as well.”

Reprinted from Energywire with permission from E&E News, LLC. E&E provides daily coverage of essential energy and environment news at www.eenews.net.

A coal-powered giant bets on wind. Will it work? is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

©2019 E&E Publishing, LLC
Republished with permission

From a perch near the Gulf of Mexico, Entergy Corp. is positioning itself as a utility company of the future — even if critics lament what that could mean for electricity choices and costs in the South.

The company, Louisiana’s largest power provider, is exploring a different type of model where a utility extends its control of generation to homes and businesses while still investing in big, central station plants.

The concept could inform electricity trends beyond the parts of Louisiana, Mississippi, Texas and Arkansas that Entergy serves through its regulated utilities.

“Innovation and new technologies will be an important part of our business as we continue to explore solutions to improve our customers’ everyday lives,” Entergy CEO Leo Denault said on a recent earnings conference call.

But for critics like Logan Atkinson Burke, executive director of the Louisiana-based Alliance for Affordable Energy, Entergy is building its future in an “old-fashioned way” that protects its monopoly and insists that everything comes from its spending.

“And we continue to argue that that is not the best way to use ratepayer dollars and is not the most cost-effective way to get where we all want to go,” she said.

Entergy has faced pushback in recent years over a variety of issues, including its proposed natural gas-fueled New Orleans power station, the company’s support for an end to net metering in much of Louisiana and questions about outages at a nuclear power plant in Mississippi.

Two pilot projects on Entergy’s agenda also show a utility eager to expand its role: company-owned solar panels on homes and backup natural gas-fueled generation at businesses. It’s also investing about $1.6 billion to help keep nuclear power plants running. And Entergy said in July that it could add 7,000 to 8,000 megawatts of new generation from 2022 through 2030 — with possibly half tied to renewables and half to gas.

The company is working on utility-scale renewable projects and purchases, and it has used a program in New Orleans to help put solar on commercial rooftops.

In a statement, the company said it’s investing “in understanding how new technology can help Entergy meet the specific needs of our customers.” It said that more than $100 million is invested annually across Entergy’s five utilities in energy efficiency and demand response efforts to benefit customers, and that rebates are available for some electrification projects.

Paul Patterson, an analyst at Glenrock Associates LLC, said it’s no secret that utilities such as Entergy want to retain control in their regions.

“I think it’s understandable that if there’s going to be investment … in the power sector in their service territory, they’d like to be the ones to make the investment,” he said.

Here’s a closer look at three Entergy projects that could have a ripple effect:

Solar on homes

In Louisiana, solar supporters are smarting from a decision this year by the Louisiana Public Service Commission to end net metering for new residential solar installations in much of the state starting in 2020 (Energywire, Oct. 11).

Net metering is used by utilities to provide credit to solar users for the excess power they generate. Under a traditional net-metering setup, the same rate is used to net the amount of grid power used by the customer against the power sent to the grid.

Entergy supported the state regulators’ decision to shift to a new setup, which will lower the financial returns for future rooftop solar users. However, traditional net metering remains in place in New Orleans, where the City Council regulates electric service.

Meanwhile, Entergy has pushed ahead on a pilot program that places solar on the homes of low-income New Orleans customers. The first installation happened last year, according to a company release in February 2019. The company told E&E News recently that it’s about 25% of the way to having the planned 100 systems installed. After that, Entergy said it plans to evaluate lessons learned and potential next steps.

“Our ability is to further anticipate and get in front of what our customers want and deliver those products earlier than they were expecting,” Benjamin Byboth, a senior innovation manager at Entergy, said during a video about the program. He said the company brought the concept “from a blank idea to market in under six months.”

Unlike many offerings from solar companies, this plan doesn’t cost a solar host anything. A customer gets a $30 credit on each month’s power bill for allowing the solar installation, according to Entergy.

But the setup could limit the upside for homeowners.

Jeff Cantin, who’s president of a company called Solar Alternatives, estimated that residential customers could save $50 to $250 a month with a traditional solar installation, depending on the details.

Burke of the Alliance for Affordable Energy said an incentive for distributed solar installations would leverage private investment and attract more solar on roofs and reduce energy burdens more than Entergy’s program.

A concern among utilities is that not all of the grid costs are reflected in solar users’ bills under traditional net metering, according to Patterson. Supporters of net metering often respond by talking about how distributed solar benefits the grid. Patterson said utility companies are open to solar under their preferred setups, including community solar projects owned by a utility.

Patterson said he’s a little suspicious about the level of interest among customers in personal choices in power.

“On the one hand, I don’t think they want one size fits all,” he said. “On the other hand, I think in many cases they want things to be … relatively simple.”

It’s good to see solar going up from anyone, according to Cantin, who is also a board member of the Gulf States Renewable Energy Industries Association. Still, he said a monopoly shouldn’t work to reduce other choices. And Cantin said a utility should also be clear about the potential costs to ratepayers from distributed energy programs.

“I don’t see an issue with Entergy entering that space, but I think consumers and businesses that have been operating in that space for a long time need to be well-protected by regulators,” he said.

David Ellis, CEO of the Entergy New Orleans utility, said the company is proud of the program.

“We’ll look back at this project and say, ‘This was a time when we implemented something that defined us as a utility of the future,'” Ellis said in the video about the new plan.

Generation at businesses

Another Entergy concept in the works is a backup, on-site generation option for businesses. Entergy has said an initial pilot at The Woodlands, Texas, is located outside a grocery store and can run synchronously with the grid.

“This pilot project will be used to help Entergy Texas evaluate back-up generation solutions for future commercial and small industrial customers,” the company said in a statement in October.

Under the project, gas-fueled generation is owned by Entergy but could help a business operate as usual during widespread outages.

“For example, retail businesses would be able to provide services to the general public during significant weather events,” Denault said on the recent earnings call. “In other times, when needed, the resource can be deployed by the utility, which benefits all customers.”

Entergy Mississippi also is pursuing a potential version of the project, according to the company. Denault called Entergy-owned, customer-sited generation a “win-win” solution.

“Our plan is to eventually implement this idea at all operating companies,” Denault said.

Allan Schurr, chief commercial officer at Enchanted Rock LLC, said his company was proud to partner with Entergy on the pilot project. In this case, Enchanted Rock sold the generation facility to the utility but still maintains it.

The grocery company pays the local Entergy utility a certain amount related to the project.

Schurr said the facility is a little over 1 MW, and he said this sort of equipment in most markets usually operates less than 500 nonemergency hours a year. Entergy decides when it runs for those hours, he said.

Schurr said utilities are seeking ways to serve customers better. But he said it can be challenging for utilities to come up with unique offerings for larger customers, which tend to be more sophisticated and have more complex needs.

“These resiliency services are the kinds of services that utilities are particularly well-suited to provide,” Schurr said, adding, “I think Entergy is out in front of the group given the business model that they’ve created to scale this out.”

Nuclear and New Orleans

Entergy also continues to face issues in its home city of New Orleans, which gets a chunk of its electricity from the Grand Gulf nuclear power station in nearby Mississippi.

While Entergy is working to exit far-flung reactors, it retains nuclear generation at sites in Louisiana, Arkansas and Mississippi. The company has outlined how carbon-free power output from Southern nuclear plants is slated to remain a key part of its generation mix in the years ahead.

It’s investing about $1.6 billion in nuclear related to plant upgrades and personnel. That is largely tied to Southern plants, and much of the spending could be recovered via rate base.

Even so, Entergy has continued to face questions about the performance of Grand Gulf. An E&E News analysis last year showed extensive periods where the plant was at reduced or zero power from 2013 through November 2018 (Energywire, Dec. 4, 2018). The plant was offline a number of days in November 2019.

Denault said on the recent earnings call that Grand Gulf could move into a higher performance rating — from Column 2 to Column 1. And that has happened, according to a letter from the Nuclear Regulatory Commission. But the CEO noted that a coming outage at Grand Gulf next year would be considered part of a “catch-up” in terms of the investment profile.

“So it’ll be a long outage,” Denault said, adding that an “outage in 2020 in Grand Gulf will be the final one in terms of getting things back to where they need to be, and then it’s just a continued climb to excellence.”

Work at Grand Gulf in 2020 is scheduled to include refueling and maintenance, according to Entergy.

Simon Mahan, executive director of the Southern Renewable Energy Association, said Entergy could find cheaper power through power purchase agreements for wind and solar.

A variety of power resources also are potentially available through the market managed by the Midcontinent Independent System Operator. But various Entergy utilities remain committed to power from Grand Gulf.

Andrew Tuozzolo, chief of staff for New Orleans City Council President Helena Moreno (D), said the council will continue to seek a full accounting of the reliability and upkeep of Grand Gulf. A multiday unplanned outage last December resulted in higher costs for New Orleans ratepayers of more than $1 million, Tuozzolo said.

Burke with the Alliance for Affordable Energy called for regulators in Louisiana and New Orleans to conduct a prudence investigation of spending and operations since 2015 at Grand Gulf and of projections for the future.

“How much more is Entergy going to pour into a plant that hasn’t been performing?” she asked.

Brandon Presley (D), a Mississippi utility regulator, told E&E News last week that he remains concerned about Grand Gulf and wants to continue to monitor it and ask appropriate questions. Pending proceedings at the Federal Energy Regulatory Commission also could shape the plant’s future.

While nuclear questions have swirled around Entergy, the New Orleans City Council previously voted to fine the company’s local utility $5 million in the wake of a paid actor scandal during a push for a new gas-fired power station that’s planned for New Orleans (Energywire, Feb. 22). And last month, the council voted for a reduction in rates for most Entergy New Orleans customers. It also backed a $1 million fine related to reliability concerns.

That outcome pleased critics somewhat, but concerns remain about the proposed gas-fueled plant in New Orleans that is being challenged. It could be in service as soon as next year, and Entergy has argued the gas plant is needed.

Recent action by the City Council “still doesn’t represent a long-lasting and real savings for the people of New Orleans,” Burke said.

Reprinted from Energywire with permission from E&E News, LLC. E&E provides daily coverage of essential energy and environment news at www.eenews.net.

How one company could transform energy in Southern states is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

An electric cooperative in rural Arkansas is finding that solar power is not only benefiting its members, it’s helped to keep a major employer in the community.

Ouachita Electric Cooperative may have broken new ground by how it helped arrange a dual power purchase agreement with its wholesale power supplier in order to help a defense contractor build its presence near the co-op’s hometown of Camden.

Aerojet Rocketdyne is Ouachita’s largest customer so it was incumbent on General Manager Mark Cayce to do everything in its power to retain its business and explore ways to improve its service to the company. Camden had recently lost another large manufacturer – Arquest, Inc. – which saw its local operations moved to Texas after being acquired.

“We knew if we didn’t do something different, we would see continued unemployment, widespread, low-income, problems and a shrinking population,” Cayce said.

As Aerojet needed to boost its prospects for winning future contracts from the Defense Department, the company sought to boost the diversity of its energy sources under Executive Orders signed by then President George W. Bush and updated by then President Obama. When Aerojet sought plausible solar solutions through its solar project developer Silicon Ranch Corp., Cayce was ready to engage.

“Arkansas had been a closed market for solar. It had never been done before on this scale,” Cayce said.

Ouachita and Cayce were honored last night in Washington, D.C. as the Smart Electric Power Alliance’s Cooperative Utility of the Year.

‘This could work for everybody’

Through its office in Nashville, Silicon Ranch in 2015 proposed a solar system which Cayce thought might make sense given solar’s ever-declining costs. But it required the financial acumen and political skills that Cayce brought to the negotiations. “It was through those discussions that we realized this could work for everybody,” Cayce said.

Among the realizations was that under Arkansas law and Ouachita’s transmission limitations, it could only integrate a 12.5 MW solar farm and it couldn’t be done by Ouachita; it had to be situated “behind” Aerojet’s meter. That meant Ouachita could not bill the company for the power.

The only entity that could sell them the power was Arkansas Electric, Ouachita’s wholesale supplier. “They had to agree to buy the excess power” to serve Ouachita and other retail co-ops in Arkansas, Cayce said.

With Cayce’s help and approvals from regulators, Silicon Ranch negotiated one of two power purchase agreements (PPAs) whereby Aerojet purchased all the solar-generated electricity it could take and Arkansas Electric would purchase any excess through the other PPA, Case explained.

Cayce “had to work through a lot of politics to get the buy-in from all the right players to make this happen,” said Matt Beasley, marketing director for Silicon Ranch, which has experience throughout the country on solar project applications.

Even with retaining a valued customer, how did it make sense for Ouachita to lose that revenue?

“We realized by having this behind their meter, we would gain by reducing our summer peak demand” – by as much as 30% recently amid this summer’s heat, Cayce said. And that enabled Ouachita to reduce the rates it charges all of its customers because its total power costs decline proportionately, he added.

With the purchase of solar-generated power, Aerojet boosted its energy diversity and fixed its costs for the next 25 years. Camden would remain the base for its regional missile manufacturing operations.

Since the contracts were ratified, Cayce said Aerojet has added 250 employees, many of which moved into the area, adding to Ouachita’s residential load.

But that got Cayce and officials from throughout the region thinking: if Ouachita could do this with solar, how else might it boost the marketability of Ouachita’s service territory to large employers? “This led us to see that we could do solar in south Arkansas and that could further differentiate the region from other parts of the state and the South and become more attractive to other industries,” Cayce said.

To help make the future case for solar, Ouachita built a solar farm to power most of its own operations. “If we’re going to do this, we want to be a good example for all of our members,” Cayce said.

Just last month, Ouachita went a step further by turning on a 1 MW community solar project it built. This fall, members will be able to buy into a portion of its output to lower their total power bill.

“When you start working on one good thing for the right reasons, other good things happen,” Cayce said.

Efficiency and broadband

On a roughly parallel path, the co-op was considering how to drive members’ bills down by other means. With approval from the Arkansas Public Service Commission, last year it launched a new tariff to improve the energy efficiency of members’ homes, whether they owned them or not.

The tariff authorizes Ouachita to purchase and install energy-saving appliances and improve residences’ insulation with savings tied to that account. At first, members see one-fifth of the savings reflected in their monthly bills. When Ouachita recovers the rest of those expenses, members are to see all those savings reflected in their bills. Local contractors get the installation work.

“It’s self-funding. Everybody pays their own way,” Cayce said. “If someone moves, the new owner has to agree to be on the tariff specific to that meter.”

Throughout the public process of securing the solar farm and announcing the PPAs, installing solar for its operations and then rolling out the efficiency program, Southern Arkansas Telephone Co. in nearby East Hampton is working with Ouachita on a new solar farm as well as an initiative to bring broadband to nearby communities. The first 900 of Ouachita’s members will have fiber with up to 1 gigabyte speeds available August 1.

“It’s yet another extension of the way solar, and fiber and energy efficiency are working together. They kind of all fed off of each other,” Cayce said.

“Mark has done a lot of novel things to put Ouachita in a position to deliver values beyond just electricity,” said Silicon Ranch’s Beasley.

“It’s a lasting investment in and economic development multiplier for South Arkansas,” agreed Katie Niebaum, executive director of the Arkansas Advanced Energy Association. “The project’s success has generated significant momentum for the multiple advanced energy initiatives that have followed.”

How an Arkansas co-op used solar power to help retain a major employer is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Two states in the Southeast U.S. are moving to step up their energy efficiency mandates by taking lessons from programs in Arkansas.

Widely believed to be the first initiative in the Southeast to decouple utility revenues from power sales, Arkansas’ success to date is serving as proof that such regulations can benefit ratepayers and utilities while creating new energy efficiency jobs.

Mississippi and Louisiana are the latest states to seriously consider such incentives aimed at utility programs that can save electricity and natural gas ratepayers’ money. The catch: much as they do with plans to generate more power with new generating plants, these states are assessing how best to allow utilities to profit by cutting customers’ energy usage.

And just as in Arkansas, the proposals would allow utilities to recover lost revenues they otherwise would have earned by selling more energy.

“Where that happens in the Southeast most notably is in Arkansas,” said Cyrus Behdwar, Policy Director for the Southeast Energy Efficiency Alliance in Atlanta. “For 10 years now they’ve had an energy efficiency resource standard. That progressively, over time, has driven the amount of savings that utilities are required to achieve on an annual basis.”

The Arkansas way

The relatively slow progress on energy savings throughout much of the Southeast is widely viewed as a result of utilities’ traditionally wanting to build more power plants that earn low-risk, regulated profits. As a resource, significant energy efficiency and other “demand-side management” programs have been neglected because utilities don’t make as much, if any, money on them.

Arkansas’ push for energy savings began when the then-head of its utility commission organized a collaborative in 2006 bringing utilities and stakeholders together to enact a law passed in 1976. The latest elements of that law were implemented in 2010.

In addition to utility commission chairwoman Sandra Hochsetter Byrd, two others were instrumental in forging and guiding the collaborative’s strategy: Wally Nixon, previously a manager in the regulatory affairs office for most of his 15 years at Entergy; and Richard Sedano, then director of U.S. efficiency programs – now CEO — of the multi-national Regulatory Assistance Project.

With the help of national efficiency experts from California, Maryland, Massachusetts and Texas, a handful of non-profits and the efficiency program managers from Entergy and SWEPCO, Arkansas’ largest utilities, Byrd guided the collaborative to a consensus.

“It’s been wildly successful for Arkansas in general and all customer classes,” said Byrd, now a vice president serving Arkansas’ rural electric co-ops. “The rules have sparked an economic development push in the energy efficiency space. There are trade allies and organizations out there doing audits” and financial institutions lending money for efficiency projects.

Another factor integral to the formation of Arkansas’ collaborative: it wasn’t part of a renewable energy mandate; it was considered on its own merits. Nixon and Sedano agreed that marrying efficiency to renewable energy would have diluted the collaborative’s singular focus and probably spelled its quick demise.

If Entergy and the six other investor-owned utilities in Arkansas achieve publicly stated savings targets, they make more money paid for out of an Energy Efficiency Cost Recovery Rider, or add-on, to base rates charged to customers in the subsequent year, said Entergy spokeswoman Kerri Jackson Case. That rider has been tweaked to ensure accurate results, which are reviewed annually by an independent monitor, Johnson Consulting in Frederick, Maryland.

Revenues that are lost and documented by the independent monitor are recovered through a separate “formula rate plan.”

According to its report on savings from its 2016 programs, Entergy Arkansas’ net system-wide, electricity savings totaled about 253,000 megawatt hours. That compares to about 27,000 megawatt hours of savings in 2011, the first full year it implemented efficiency programs for  all customers.

What got stakeholders engaged at the outset was a “Quick Start” program to secure easy-to-achieve savings through rebates and other policies “that seemed to work everywhere” nationally, Sedano said.

“You didn’t need to reinvent the wheel with a lot of thinking about new programs,” Sedano explained. “So it helped us focus on what would likely succeed quickly in Arkansas.”

John Bethel, who has been the commission’s executive director since 2000 and on its staff since 1991, said his advice to other states is to begin not with formal pleadings in a commission docket but with informal discussions focused on exploring mutually beneficial opportunities. “It certainly was a different way of developing regulatory policy than we had used historically.”

The collaborative’s work gained credibility when it was showcased as part of “National Action Plan for Energy Efficiency” events organized by the U.S. Environmental Protection Agency in 2007 under then-president George W. Bush.

Lessons for other states

In Mississippi, Commissioner Brandon Presley wanted to copy Arkansas’ experience. But he found that part of Arkansas’ collaborative approach struggled at the outset due in part to what he said was a lack of support by Mississippi Power’s parent company, Southern Company.

That has changed. “They (Mississippi’s utilities) are now patiently and deliberately making progress,” Sedano said.

In Louisiana, commissioner Foster Campbell has assigned staffers to pursue its own collaborative process, also led by “Quick Start” initiatives.

“Arkansas now is light-years ahead of other states in the Southeast,” said Katherine Johnson, who heads the independent monitor serving Arkansas’ commission.

In Virginia, both of the state’s largest utilities are participating in a panel set up by Gov. Terry McAuliffe in 2015 about energy efficiency. But many stakeholders agree it has yet to agree on anything that approaches what Arkansas sought to achieve.

Chelsea Harnish, leader of the Virginia Energy Efficiency Council, said the group is “very intrigued by the Arkansas model.” She said VAEEC has shared its views with the State Corporation Commission (SCC), which regulates utilities in Virginia, as have American Council on Energy Efficiency and Consumers Union.

Among the biggest hurdles states must overcome are securing support from regulators for cost-effective rules and savings targets. That appears to be the reality in Virginia, where both Dominion Energy and Appalachian Power have submitted limited energy efficiency proposals in their most recent integrated resource plans. How those proposals may be acted on is a live case before the SCC (one can see the filings to date by going to this URL and entering case PUR-2017-00047)

“Virginia has to decide where it wants to go on efficiency,” Behdwar said. “The SCC has either denied permission or reduced the (proposed) budgets, sometimes significantly.”

“You have to convince the (SCC) commissioners that energy efficiency is a benefit to all ratepayers” and that “independent evaluations can remove the guesswork out of estimating results,” said Johnson, who said she is consulting for several utilities in Virginia.

“Energy efficiency is becoming a differentiating factor among states,” Sedano said. States that too narrowly control development of efficiency as a money-saving resource are effectively discouraging deployment of efficiency initiatives and are losing business as a result, he said.

“If you start thinking of efficiency as a resource, including customized programs for low-income ratepayers and large industries, you can start looking for it in a strategic way. That’s the demarcation that utilities in Arkansas have adopted.”

“One of the best things about Arkansas’ success story is that it causes other states to think about what they are doing,” Sedano said.

As Arkansas leads on efficiency, two states poised to follow is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.