In an effort to further diversify its electricity portfolio, Entergy Louisiana has reached a 20-year deal to purchase solar power from a proposed 50-megawatt plant that would be built in West Baton Rouge Parish, the utility said Thursday.
The plant would let Entergy Louisiana customers save an estimated $29 million over the life of the contract, the utility said.
The estimated savings are based on what it would cost Entergy to buy the same amount of power on the marketplace, since the utility does not generate enough electricity on its own to supply its customers.
The plant would produce enough electricity to power roughly 9,500 homes, making it the largest solar facility under development in Louisiana.
Entergy’s pact with a subsidiary of Eagle Solar Group, an Arizona-based firm that specializes in developing utility-scale solar projects, calls for purchasing all the power from the plant once it’s up and running. That is scheduled to be by March 2020.
The plant, to be built on 500 acres of land near Port Allen, will consist of ground-mounted solar panels that track the sun’s movement throughout the day. The project is expected to create 350 jobs during construction and generate roughly $6.4 million in tax revenue for the surrounding region over three decades.
The deal is subject to approval by the Louisiana Public Service Commission.
The plant would add an additional source of emission-free energy to Entergy Louisiana’s generation mix, which includes the Waterford 3 and River Bend nuclear units and 180 megawatts of existing hydroelectric, biomass and waste heat recovery resources, the utility said.
It’s unclear how much it will cost to build the plant. A spokesperson for Eagle Solar Group did not return a call Thursday.
On Thursday, PSC Commissioner Foster Campbell expressed support for Louisiana utilities investing in renewable energy sources, but he said the deal still must be scrutinized by state regulators to ensure that ratepayers are getting a good deal.
“We just need to make sure that they can produce what they say they can produce at the price that they say they can produce it,” he said.
The Eagle Solar proposal was among more than 60 that Entergy received to help bolster its renewable electricity portfolio with power that would have been produced both inside and outside of Louisiana. The bulk of the proposals dealt with solar power.
“We think this is great news for our customers in Louisiana, as it continues our commitment to a clean and efficient portfolio,” Entergy Louisiana’s president and CEO, Phillip May, said in an interview.
Signing a long-term deal for a renewable resource, May said, means customers will be insulated from potential swings in prices of commodities such as natural gas.
In April, Entergy Corp. CEO Leo Denault said in a letter to the company's shareholders that the utility giant was in the process of evaluating more than 1,000 megawatts of renewable energy resources.
Entergy Louisiana is also negotiating with another company that could see it add additional renewable generation.
“The main thing is this will provide us some real-world experience with a utility-scale solar project that produces benefits for our customers,” May said of the 50-megawatt plant. "I think what you’ll see is, over time, we’ll increasingly look for renewables such as solar to fill in our portfolio.”
The Entergy Corp. subsidiary provides electric service to more than 1 million customers and natural gas service to approximately 93,000 customers in the greater Baton Rouge area.