Good News Under the Sun for the Mississippi Delta

As a member of Entergy Mississippi’s advisory board representing the interests of the customers of the Delta, I am regularly briefed on upcoming company projects and took particular interest in one such project in our own backyard. In the midst of so much bad economic news in Mississippi and the Delta related to the onset of the Coronavirus pandemic, it’s good to know there are still some positive economic development projects being considered in places in the Delta that really need it. One example is Entergy Mississippi’s appropriately named, “Sunflower Solar Facility.”

Entergy Mississippi and solar-developer Recurrent Energy are partnering on a proposed $153-million solar project to produce 100MW of renewable energy on approximately 1,000 acres just north of Ruleville in Sunflower County. The project, which will ultimately be owned by Entergy Mississippi, will include approximately 350,000 solar panels that will track the movement of the sun for more efficient output and will be able to generate enough clean energy to power over 16,000 homes.

This would be the largest utility-owned solar facility in the state, pending approval by the Mississippi Public Service Commission. If the MPSC approves the project in the coming months, construction would begin early next year.

According to an economic impact study done by the University of Southern Mississippi, the solar project has an overall estimated annual economic impact on Sunflower County and Mississippi totaling $2.46 million in total increased output and $1.71 million in earnings.  The project is also expected to create twelve to ninteen full-time jobs (direct, indirect, and induced jobs).  The greatest impacts, however, will come from the almost year-long construction period when 400+ direct, indirect, and induced jobs and $35.99 million in earnings will be supported.     

Entergy Mississippi’s decision to own the facility outright as opposed to renting it from a solar developer is good for their customers and the Delta. Under a rental agreement, after ten or fifteen years the solar facility would still be owned by the third-party company who could sell their power to others after Entergy Mississippi customers may have virtually paid for the entire facility. With a utility-owned facility, Entergy Mississippi would own the plant for its 30+ year life and be able to provide its power to its customers for many years after such a rental scenario would expire.

Entergy Mississippi could also make technology upgrades over the life of the facility, add storage to make it more valuable to customers and have the flexibility to provide new offerings and services, like community solar and customized offerings to residential, commercial and industrial customers that would not be available under a rental agreement.

More importantly for the Delta, companies renting solar facilities typically seek significant tax reductions and would not pay nearly as much in taxes on the facility. Local communities would benefit more from a utility-owned facility as Entergy Mississippi would pay the full tax assessment to local communities and counties. It is estimated that Entergy Mississippi will pay between $2.5 million and $3.5 million in annual taxes while an outside company would pay approximately $50,000 annually. This revenue equates to as much as $133 per citizen, which is a big boost to this economically distressed county with a 32.5% poverty rate and median household income of just $28,556.

While it’s impossible to predict commodity costs in 2022, it is expected any rate impacts to Entergy Mississippi customers for the Sunflower Solar Site would likely be less than $1 per month for a typical residential customer. In fact, the project is expected to provide $19 million in customer benefits over its 30-year life, on a net present value basis. 

Like investment advisors say about stock portfolios, power companies know it’s important to diversify their power generation sources so that commodity price hikes in one or two sources don’t significantly raise prices for customers. Entergy Mississippi currently generates much of its power from low cost nuclear and natural gas sources, and purchases large quantities of power from the competitive market. By adding solar power to their power mix, they are diversifying their portfolio with clean energy, utilizing the economic benefits of utility-scale solar power and taking advantage of the Mississippi Delta’s abundance of wide-open, sun-lit spaces.

When the time is right and the Mississippi Delta and the rest of the country can begin climbing out of the economic distress caused by the COVAD-19 crisis, it will be good to have low cost power as an economic advantage in our area, and even better to have the very source of some of that power be an economic advantage, too.