Google to fund Arkansas grid and storage for 600MW data center

Google will fund three renewable energy projects and grid upgrades for its planned 600MW data center in West Memphis, Arkansas, including a 440MW solar contract that Arkansas regulators refused to let Entergy Arkansas sign.

Arkansas regulators denied Entergy Arkansas' request to sign a PPA for the Big Island solar plant's output in early September. They found the utility had not shown the contract's costs were reasonable or would save customers money compared with other options. Google's contract covers the entire 440MW capacity of the plant in Mississippi County, which Pattern Energy is developing and which broke ground in July. The commission advised Entergy to work with Google on the concerns. Google said the PPA was "added based on Arkansas Public Service Commission guidance from the initial filing of the resource." Data Center Dynamics first reported the contract appears to follow that ruling.

The change for allocators is the counterparty: Google, not Entergy Arkansas, signs the 440MW solar contract. A utility PPA recovered through rates turns on a rate case; this one turns on a corporate balance sheet and on a commission that has already rejected the same plant's costs once.

The deal is expected to support up to 1.4GWh of battery storage by 2028. The capacity is split between a 1,000MWh facility at the 313MW Driver Solar site in Mississippi County and a 400MWh one near Hot Springs.

The package also covers expansion of the Galet 500/230 kV substation and two 230kV transmission lines in West Memphis, slated for initial service this year. The substation is being built specifically to integrate power for large industrial and technology expansions, including Google's nearby planned data center campus.

Google will cover the costs associated with the project under a new contract, according to the release. The companies claim the projects will result in "$2.1 billion in net benefits to help cover the fixed costs that all customers share," and that "everyone else's bills will be lower than they would be otherwise."

Entergy Arkansas intends to submit the Google expansion project to the Arkansas Public Service Commission for approval in a filing that follows the commission's transparency recommendations and expects it to be in service in 2028 pending approval. The filing is the first regulatory test of the $2.1 billion figure, and it goes before the same commission that rejected the plant's costs in September.