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Meeting of joint energy will come to order. Apologize for the delay, but we had an important PowerPoint
we needed to get loaded, so thank you for all being here on this beautiful, cool
day. Your meter is running, in case you're wondering. The chair would introduce a motion to approve the minutes of the August 6th meeting.
Moved by Senator McKee, is there a second? Representative Beck, second. All in favor say aye. Opposed? Thank you. That's approved. We will move on to item C, discussion of data center development in Arkansas. Our first witness is Ms. Rachel Wilson with Google.
Ms. Wilson, I think we got your PowerPoint loaded, and please come to the table. and if you'll pull that mic close to you and push that button and identify yourself for the record
yeah my name is rachel wilson and i'm with google all right thank you ma'am uh you're recognized to begin your presentation oh and you do have a handout that was also if people look if you don't have it, ask the staff, but you should also have a handout.
Representative Rick Beck
Unverified
1:30
Okay, please proceed. Thank you. Good afternoon, Chairman Johnson, Chairman McNair, and members of
Speaker 7
1:34
the committee. Technology never ceases to surprise us, I will say, after this. So thank you so much for having me today. It's great to be
able to talk to you about Google's data centers more broadly and our specific data centers that are under construction in Arkansas. I think there's a lot of unknowns or misconceptions about what a data center is and what it does. It is not exclusively for the purposes of AI development. Google's data centers power all of our products that we either give or sell to customers, and I'm sure many of you in this room use many of those products. You can see from these icons here, those include Search, Chrome, Cloud, YouTube,
which my children cannot get off of, so I appreciate the demand that's happening in my own house. It's me too. It's not just your children. I'm glad to hear that, Gmail, maps, all of the things that we do in our daily lives using one of our many devices, those Google products are powered by Google's data centers. We have 32 locations for our owned and operated data centers across four continents. This map shows the data centers that are operational. There are also a number of data centers that we have under construction that are not yet
shown on this map, but when those facilities are energized, we will add them here and we keep this page up to date on our website. That website gives information about our data centers and all of the locations more broadly if you're interested in a specific site. And I assume if we would go
to the website we could zoom in on that big bunch of dots in the U.S. That's correct and you
Speaker 7
3:07
could see exactly where each of those dots are cited. Okay. There are a couple of locations here that are actually home to more than one data center so you can see the low country in South
Carolina, that actually hosts two that are operational and one that's under construction. So there are some facilities where one particular location hosts multiple sites. Here in Arkansas, we have one data center that is currently under construction in West Memphis. We announced that site last year. It represents a $4 billion capital investment from Google, and we've partnered with Entergy to cover the full cost of service for our demand at that site. Entergy's analysis showed that over
the lifetime of our 20-year contract, that contract will yield $1.1 billion in net benefits to Arkansas ratepayers, and that contract also supports the development of a project called Cypress Solar, which is a 600-megawatt solar and 350-megawatt battery storage facility. As I mentioned, that site is currently under construction. We are undergoing grading and substation prep now, but things change very rapidly, and that site is expecting to be energized in 2027. Here in Little Rock, we do have a site for data center development. We're currently
engaged in the very extensive due diligence process. We are engaged with our stakeholders, listening to the needs of the community and the desires around development at that particular site. We had filed for a wetlands permit initially. We've pulled that permit subsequently and are currently making the necessary modifications before we refile. As you can see from this chart and from the site map that doesn't yet show those data centers that are under construction are not yet shown on this map,
Google's energy demand is growing exponentially over time. it is this energy demand that is fueling demand in the markets for power from our utility partners. What are we doing about that? A couple of things. Because we found that the traditional utility model of building large-scale generation projects that take multiple years aren't meeting the desire for speed to construct the infrastructure that Google needs to serve its customers.
So we've had to rethink some of the traditional business models for power. We rely very heavily on our industry and utility partners to help us come up with these solutions to build projects that meet Google's customer demand. We have a customer demand for specific types of energy. And in order to retain those customers, we need to meet that demand. And so we rely on our partners to help us think creatively, implement these solutions, build generation projects like Cypress Solar, but that could also include small modular reactors, up rates at existing nuclear units, advanced storage at longer durations.
These new types of things that will enable clean power at scale and delivered to our customers. Those policies come forward in our contract frameworks that we have with Entergy and others. we have collaborated closely with a number of different utilities across the country to implement a certain number of principles to protect ratepayers against bearing the burden of Google's energy cost. So those principles include long-term commitments. Our contracts with our utilities are
typically at least 15 years. Our contract here with Entergy is 20 years. It includes minimum billing demands. And what that means is we commit to paying a high percentage of our ultimate demand in minimum bills every month, regardless of whether we use that volume of energy or not. So when we say we're paying 80% of our contracted demand, we will pay that regardless of whether our use is 50%, 60%. And if it's above 80%, we'll pay the additional on top of those minimum bills.
We provide extensive upfront collateral, and we have stringent exit and termination fees. So if Google decides that Arkansas is no longer a feasible market and we need to exit that contract, oftentimes we wind up paying the completion as if the contract were fulfilled in exit fees. And we do that so that customers are not left holding the bill for infrastructure that we've asked the utility to develop to power our data centers. And so in this way, we're helping to bring relief to rate payers spreading the portion of fixed costs on the utility system over our larger load, which results in net savings to other rate payers on the system.
Some of the energy highlights that I'll mention here, we've partnered with a number of developers to bring new types of technology to the grid. On the nuclear front, we're looking at repowering existing facilities that have shut down across the U.S. One of the most recent examples is our partnership with NextEra Energy to restart the Duane Arnold Power Plant in Iowa. We're also looking at development of small modular reactors. We have a partnership with an entity called Kairos Energy for 500 megawatts online by 2035.
the first project broke ground last year that is with TVA in Tennessee and it is a 50 megawatt project we're currently looking for a home for the additional 450 megawatts and then we have a 200 megawatt partnership with Commonwealth Fusion Systems the date on those technologies is still to be determined but we are looking to bring those forward as soon as possible we're partnering on advanced geothermal technologies. This is primarily targeted in the west at this point,
though I understand that Arkansas has some advanced geothermal potential in the southern part of the state. We are collaborating with an entity called Fervo on a 115-megawatt contract for a first-of-a-kind project in Nevada. And then we're also working on a number of different long-duration storage projects. So these are batteries that are capable of injecting power into the grid for sustained amounts of time. Currently the standard is lithium ion technologies which can release power for about four hours at maximum. We're looking at projects that can do 8, 12, 24, even 100 hours and those
will preserve reliability at lowest cost to customers and repairs. In terms of the grid, the U.S. transmission infrastructure is aging. It needs replacement but construction of transmission lines is expensive, and it takes a long time. So we've partnered with an entity called CTC Global to look at reconductoring lines, which enables more power to flow through on an expedited timeline. We're looking at using Google's own AI capabilities to speed interconnection times,
to look at weather forecasting that enables more optimal power operations and unit commitments. And then we're using demand response. That means when there is a situation where the grid is strained, we will reduce demand at our data center site to alleviate that constraint and lower wholesale prices for customers. That demand response is outlined in our West Memphis contract with Entergy. So we agree to a period of up to 10 hours for any event and then over 100 hours of the course of the year in which we will
Representative Denise Jones Ennett
Unverified
10:44
reduce our data center demand if called upon by the utility.
Speaker 7
10:49
And then lastly, I want to highlight the energy affordability work that we're doing here in Arkansas. Alongside the announcement in September for the West Memphis Data Center, we also announced our West Memphis Energy Impact Fund. That fund commits over $25 million over five years to improve energy affordability for low-income customers. It is focused at this point on West Memphis and Crittenden County, looking at weatherization and pre-weatherization, so those health and safety repairs that are needed to enable low-income customers to qualify for weatherization services.
Representative Rick Beck
Unverified
11:28
We also announced just a few months ago our commitment to an additional
Speaker 7
11:34
$5 million in health and safety improvements, weatherization services, community solar and energy efficiency upgrades for schools as part of our announcement about the Steel River facility. Steel River is the U.S.'s largest solar facility that is currently under construction in the town of Wilson. And you can see that I've highlighted some of the partners that are enabling us to carry out these investments. ICF, who is Entergy's implementation partner for energy efficiency services, Groundswell, Crowley's Ridge Development Council, and Elevate Energy.
Groundswell has been particularly active in this space. They've moved, I think, over 40 homes off of their list and are looking at a wait list of 250 at this point. So they are moving as quickly as they can to get through that list by the end of 2026. But I've included this testimonial here, and it says, after being residents in our home for over 30 years, it's as if we've moved into our house again for the very first time with all the new windows and attic insulation. And these are West Memphis residents whose home was recently retrofitted by Groundswell, and they agreed to talk about their story with Google and with you all.
And I've just concluded with some views inside of our actual data centers. So these are Google employees who you can see doing electrical repairs, HVAC repairs, some welding. So these are the people who are employed at Google's data centers,
Representative Rick Beck
Unverified
12:59
just a small subset. And with that, I'm happy to take questions. Okay.
Thank you. Ms. Wilson, I had one just quick question. You mentioned the advanced conductors for your transmission lines.
This is where, we'll just say the wire. I know it's maybe some other kind of cable, but the wires would be retrofitted to something that's more efficient and would either not eliminate but diminish the amount of line loss over the distance it has to travel. Am I understanding that
technology correctly? They essentially apply a coating to the existing wire, which
Speaker 7
13:38
allows it more electrons to pass through that wire in any given moment. Okay, and for people
who aren't aware of that, I attended a meeting where this was described.
There's a significant amount of line loss from where something's generated to where it's finally delivered to the end user, and that's efficiency that, you know, that's like adding more capacity if you can get this efficiency. That's right, without needing to build new infrastructure. Okay. Well, we'll
go straight to questions. Representative Leidyman, you are recognized. I'm over here, way over here. Thank you.
Representative Jack Ladyman
Unverified
14:13
Thank you, Mr. Chairman. A couple questions.
Are any of your current data centers self-powered? In other words, do they have their own power source, or are they
Representative Rick Beck
Unverified
14:29
to that map that I showed you, there are no locations on that map that have
Representative Denise Jones Ennett
Unverified
14:34
on-site generation that is being used to power the data center. That is something that Google looks at when we're considering data center development. Policies have to be in place in a state in order to enable that solution. And so there are, I think, some locations in Texas where we are looking to construct a new data center and use on-site power for generation.
In general, our preference is to be grid-connected and to work with our utility partners in the states in which we're located in
Speaker 32
15:04
order to bring those generation solutions to the grid and to other rate payers. Okay. Thank you for that.
Representative Jack Ladyman
Unverified
15:11
One more, Mr. Chairman, if I could. Go right ahead, sir. You know, we heard a lot of things in the newspaper. Some, I think, are correct. I think some of them are not correct. One of the things that we read about is the water usage.
Are you able to answer, I mean, can you give us an idea of water usage? I know some of the sites or the data centers recirculate their water. Can you give us an idea of how much water an average-sized data center or a typical-sized data center would use?
Representative Denise Jones Ennett
Unverified
15:49
high level, and what I will say is that it's incredibly site-specific, but also developer-specific. There are some folks out there who are developing data centers who use the same technology in all of their sites.
Google takes a different approach. Our approach is one that is very site-specific. It looks at the availability of the resource in the community, the quality of the resource in the community, the existing infrastructure, the need for any potential upgrades, and then we make those siting decisions or the infrastructure decisions around both constraints and opportunities. So each of our data centers may use a technology that is unique to that particular site, and that is absolutely an area where
Speaker 7
16:29
we will look for community input on the type of solution that they would want to see.
Representative Jack Ladyman
Unverified
16:35
So would it be possible to put it in an area like northwest Arkansas where there's very little water, and is
Chair
Unverified
16:44
there a technique that you could use to do that? West Memphis actually
Representative Denise Jones Ennett
Unverified
16:47
is using a dry cooling technology, and that was not the original plan, But when faced with certain constraints on the system, we had
Speaker 32
16:54
to pivot and then select that dry cooling. So, yes, in areas that are
water constrained, there is an option for that. Thank you. Thank you, Representative Leighman. Now, when you say dry cooling, is this, you know, like an old Volkswagen that's air-cooled?
Is it like that as opposed to something that has a recirculating
liquid? Is that analogous to that?
Speaker 7
17:18
Yes, it is essentially like that, and I will say that when you're looking at cooling solutions that use less water, there's a tradeoff that comes with that because water is the most efficient way to cool anything that's hot, and so when you're using dry-cooled solutions, you're in turn using more energy, so we have to look at both sides of the coin.
So running that fan costs more energy than running a water pump. Correct. Okay, great. representative
Beck you're recognized thank you mr. chair I had a couple questions you were talking about
Representative Rick Beck
Unverified
17:54
the coating on the wire increasing the efficiency in the line law decreasing the line laws for the transmission you didn't have a number I'm an engineer you didn't have a number is that like 20% I don't know off the top of my head
but I'm happy to get back to you on that
after this discussion okay so that's it
so the next and you might just give it back to
the to the committee and then you can distribute the committee staff and we'll we'll see that
Representative Rick Beck
Unverified
18:27
everyone gets the answer perfect this the second question is you were talking about your demand contract that you have and you and I might have heard wrong so you said for you can reduce your demand down to help stabilize the grid for 10 hours for 10 hours
Representative Rick Beck
Unverified
18:49
the course of the year so it's 100 hours for the course of the year correct all right so just in general uh your other sites have you do you have similar contracts like that at other sites and how has that played out in other words you know we've never used more than 60 hours
Speaker 7
19:11
a year or something like that. That's right. The demand response is a relatively new provision that we're writing into our contract. So I believe Entergy was the third utility with which we made this type
of partnership agreement. Indiana, Michigan is another, and the name of the third is escaping me at the moment. But we are looking to
Representative Denise Jones Ennett
Unverified
19:33
do this in increasing amounts in new utility contracts as we are able, there are certain services for data center customers that have less ability to be curtailed than others. So you would want your Google products to stay online, and in emergency situations, you want the emergency response team to still be there. So those
run through a data center. So the ability to curtail is going to vary according to the site and the customers who are being served at that particular site, but it
Speaker 7
20:05
is something that our team is actively working on to implement at as many locations as possible one more if
i may just this i'll tell you i'll just get back into i'll get back please go ahead and represent back
Representative Rick Beck
Unverified
20:20
i'll cut you off i think you're talking all right uh so the the question i had was in that looking at distribution lines versus transmission lines and i know in your statement
I know that you guys are saying that you're paying for all the equipment to serve your facility. You and energy, you've worked out a contract with them. So my question is this. There's distribution cost or distribution assets, infrastructure. That needs to maybe be increased and whatever like that. And I'm assuming you're paying for that because that's distribution. But my question is, on a bigger scale, on the transmission, for the transmission of power in and out of the area where you're operating in.
And this work that you've done with, I think it said CTC Global, to help the transmission lines reduce the losses on those lines, is that adequate enough? I guess I'm concerned about transmission restraints. You know, there's transmission restraints within the distribution lines, but there's also transmission restraints on the larger grid. So can you fill in the gaps there a little bit for me?
Is it CTC Global? CTC Global is the partner, yes. Are they going to offset any kind of restrictions as far as the transmission side of this goes? I'm going to answer your
Representative Denise Jones Ennett
Unverified
21:59
related to the transmission infrastructure that's going to be used to serve Google's load at West Memphis. There was additional infrastructure that was needed at that facility. And as part of the special rate contract with Entergy, there is a provision that Google will pay for those upgrades and additional infrastructure that's needed.
The CTC Global Partnership is a separate partnership that is looking at reconductoring existing transmission lines. And currently, the way that that is structured was via an RFP process. And so we put it out to all of the utilities, and then we got responses from folks who are interested in partnering with Google. They submitted a response and detailed the project and the amount of investment that would be necessary. I believe we have a team that is currently going through those responses now to select kind of the first round of winners.
Google is ambitious, and we want to reconductor the entire United States. We just have to take it, you know, one chunk at a time. So while we don't have any plans yet for Arkansas, I hope that this will be another way that we can work with Entergy to
bring benefits to Arkansas rate payers. Thank you. Thank you, Representative Peck. Senator
Senator Matt McKee
Unverified
23:21
McKee, you're recognized. Thank you Mr. Chairman and thank you Miss Wilson for being here.
You know there's a lot of communities that are concerned with different aspects, different things they've seen on social media. Could you, would you be willing to go through what you consider to be some of the most important questions those communities can ask, whether it is Google that's developing the data center or whoever it is, can you know some of the most important questions you think are important for y'all to answer for those communities? That's
Speaker 7
23:50
a great question. I'm very glad you asked. And I think there has been a lack of understanding in communities about what exactly those questions
should be and how they can be asked to data center developers. Each of the developers approach things differently. And so it is very important to have a forum where you can ask the questions and get answers that can enable you to make the best decision for your community. I think we are seeing people who are very interested in energy use, in water use, sound, appropriate buffers around facilities, impacts on land and wetlands, community benefits.
What will the community wind up paying for? What benefits can they be expected to get in return? How will those benefits flow down to residents and in what form? These are, I'm giving you kind of topic areas as opposed to, you know, very specific questions. But I think those are kind of an umbrella of things that communities are interested in and that need to be asked right
Chair
Unverified
24:56
at the outset of any of these proposals. And I appreciate that answer.
Senator Matt McKee
Unverified
25:04
What are some of the most important things states
can do, number one, to ensure that the market's open for business and jobs and economic development, but also to make sure that the people that we represent are
protected from nefarious actors and folks who don't necessarily exercise the best practices? I think that there are many
Speaker 7
25:28
entities that are interested in this. And so to the extent that you can work in partnership, that is going to be most helpful
so as not to step on each other's toes or avoid, you know, one entity kind of getting in the way of the other. And by that, I mean, you know, Entergy, for example, has worked out specific provisions that are enabling ratepayer protections when data center loads come to town. And so communication, I think, around those principles will be essential. if the legislature were to take action at a state level, say.
And there are states that have put in provisions around large load contracting, what data centers must agree to. I think there are some states who have weighed in on community benefits planning and what those benefits should look like. It really comes down to the need, I think, in each state, and every state is going to be different. So your response is not necessarily going to look the same as Texas. But, you know, you want to make sure you're following the principles of ratepayer protection,
land use protection, and then making sure that
Chair
Unverified
26:43
communities are receiving the services that they need. Last one. Go ahead. When you leave
Senator Matt McKee
Unverified
26:51
here today, and I think you're probably going straight to the airport. We appreciate you taking questions. But if you had to leave hoping that we came away or the folks that are watching online came away with one thing, what's the most important thing that they should know about the industry that
Speaker 7
27:09
you're in and the development that we're seeing? I think in any market where folks see that there is money to be made, it invites a level of speculation.
And so you have a range of actors who are looking to develop data centers. And it can be hard to differentiate the good actors from the bad actors. Google has demonstrated its commitment to doing data center development in the right way, a way that protects Arkansas ratepayers, and a way that brings benefits to the communities in which we're sited.
Representative Rick Beck
Unverified
27:38
And so that is ultimately what I would like to leave you with today. Thank
you. Thank you, Mr. Chairman. Thank you, Representative, I mean, Senator McKee,
and also, Ms. Wilson, for a good question and a great answer. Along that line, I just want to say that can you clarify, and most people in this room probably know it, but generally I don't think people do, the initial developer may not be one of the names we've heard, like Google or Amazon or someone like that. This is what you're speaking of, where someone goes in and wants to build a facility or start a facility that will turn around
and sell to you or one of the other data companies. Am I reading that
Speaker 7
28:29
correctly? A coworker of mine calls that a man, a van, and a plan. And so that is somewhat facetious but also true in that there are folks out there who are looking to acquire land and, yes, construct a facility and ultimately sell it to someone, but they don't yet know
who that someone will be. So it was total speculation in that regard. Correct. Okay, thank you. Next, Representative Ennett, you're recognized.
Representative Denise Jones Ennett
Unverified
28:56
Thank you, Mr. Chairman. Hi, I'm Denise Ennett, and the Google that you're going to build on the port, that's in my district, and so I have a couple questions about that. Can you talk about the timeline again? We
haven't yet developed a timeline. The timeline is going to be somewhat lengthy, more than a year, I can say for certain. Beyond that, I don't know, because those plans haven't yet taken shape. As I mentioned in my slides, we're currently in our listening phase
to figure out what the community would
Representative Denise Jones Ennett
Unverified
29:40
another question? Of course. Go right ahead. Yes, so in the SWE home community, who
Speaker 7
29:46
have you spoken with in the community? So my job is in energy market development, so
Representative Denise Jones Ennett
Unverified
29:51
I am primarily tasked with our regulatory relationships and working on our power acquisition with Entergy. We have a public affairs team.
We have a community development team, and those are the folks who are typically on the ground speaking with community members and getting their
viewpoints. Okay. All right. One more question. One more. So how
does that work after you get everything start building? Are you going to start a CBA, or do you start a CBA before you start building the data center?
Speaker 7
30:30
How does that work? Typically it's before we start building. We would at least enter into discussions with the relevant folks to determine what those community benefits are going to
Representative Denise Jones Ennett
Unverified
30:40
look like. And then it would absolutely be in place by the time the data center is constructed. But, you know, depending on the length of
Speaker 32
30:48
those discussions, you know, it could progress alongside the construction timeline. Okay. And I
Representative Denise Jones Ennett
Unverified
30:54
would just like to be kept apprised of that when you start doing that. Yes, absolutely. All right.
Thank you, Representative Innet. Representative Magruder, who represents West Memphis, you recognize. Magruder, he said Magruder.
Representative Jessie McGruder
Unverified
31:16
a question. Being that I'm not on this committee, I have three questions, if that's okay, Mr. Chair. Just shoot them. Yes, sir. Thank you so much. My first question is, well, first a statement, thank you for the $4 billion investment in Crittenden County.
being that I am a resident of Crittenden County. I do have a concern because you said there are areas that you all have started plants or gotten one going, and then you had to shut down
Speaker 52
31:48
because it wasn't feasible. No, I'm sorry, and I apologize if I misspoke.
Representative Denise Jones Ennett
Unverified
31:53
That was a kind of a rhetorical statement. If we were to exit a particular market, customers would still be protected based on the provisions that are in our contract. Google has
Speaker 7
32:04
never left a data center community.
Our earliest data centers were constructed in 2007, and those data centers are still at
Representative Denise Jones Ennett
Unverified
32:10
the same level of capacity they were when we constructed them, and many of them have actually been expanded.
Representative Jessie McGruder
Unverified
32:18
Thank you so much. Okay, my next question is, again, about Crittenden County. How many employees do we anticipate that will be from Crittenden County or live in Crittenden County at this facility? I don't have that number off the
Speaker 7
32:32
top of my head, but we like to hire locally, and that is our preference.
So as many folks from Crittenden County who would like to work for Google, I
Representative Jessie McGruder
Unverified
32:44
think we're happy to take them. Okay, thank you so much. And my last question, Mr. Chair, Crittenden County, I heard you speak about the investment of $5 million a year over five years, which is a total of $25 million in Crittenden County. Are we allowing anybody in Crittenden County or they're just focused on one
Speaker 67
33:06
area in Crittenden County? It is anyone in Crittenden County. It is focused
Representative Denise Jones Ennett
Unverified
33:12
on low-income residents, and so the partners that I mentioned, Groundswell, ICF, and Crowley's Ridge Development Council, have been working together to create ways to spread the word about the program and create intake forms.
I think there's actually a website where people can enter their name, their address into that site and be put on a list for a visit to talk about the potential for these health and safety repairs and weatherization services. Well, if
Representative Jessie McGruder
Unverified
33:40
possible, Ms. Wilson, can you share that information with the committee so that we can make sure we pass it on to the residents of Crittenden County? Thank
you so much. Absolutely. I'd be happy to do that. Thank you.
Representative Lincoln Barnett
Unverified
34:05
Thank you, Representative Magruder. Representative Barnett you're recognized thank you chair hi miss Wilson thank you for coming and sharing with us your presentation I do have a question really one of clarification I know that you spoke about the West Memphis energy impact fund which is approximately 25 million dollars a few months ago
there was an announcement regarding the Greater West Memphis Energy Affordability Fund, which was another $1.25 million. So are those two separate things?
Yes and no. The Greater West Memphis Fund is part
Speaker 7
34:43
of that West Memphis Energy Impact Fund, And it is a carve-out of that $1.25 million that is meant to be allocated by members of the community.
And so we assembled an advisory board of local folks
Representative Denise Jones Ennett
Unverified
35:01
who are taking applications for different energy projects, and they're making a decision about how to allocate that $1.25 million within the community. Okay. And as it relates to
Representative Lincoln Barnett
Unverified
35:12
the composition of that board, I know we had a previous email on May 2nd where we talked about there being 80% of that board make up from Crittenden County in West Memphis, and then there's 20% that is
from Memphis in Shelby County.
And could you provide explanation as to why that 20% is for Memphis in Shelby County? So
Speaker 7
35:38
there are organizations in Memphis are also invited to apply for funding. And so
Representative Denise Jones Ennett
Unverified
35:43
because those organizations could potentially ask to be grant recipients, then we thought it wise to include representatives from Memphis as part of the
Speaker 7
35:54
board. I have seen the applications and I cannot recall if anyone from any organization in Memphis opted to apply at this time.
Representative Lincoln Barnett
Unverified
36:08
for funding if people so chose. Has any thought
been given to allow other counties in Arkansas to apply? And primarily because you are developing in West Memphis, and West Memphis school district is actually a dual county school district. And so would St. Francis County, for instance, Would someone, communities from that county, be able to apply for that particular fund?
Speaker 7
36:36
I think we view this affordability fund as a starting point, and we would love to be able to expand our footprint to include more counties. I mentioned an additional $5 million that had come as part of the Steel River project announcement. So because that project is located in Mississippi County, a portion of that $5 million is going to weatherization in that county. And then as another component of that fund, we also created a fund for Arkansas schools.
Representative Denise Jones Ennett
Unverified
37:09
And so that is intended to serve the Rivercrest School District, but also the Little Rock School District and the Pulaski County Special School District. So we are doing a slow expansion. and I just ask for your patience and support
Representative Lincoln Barnett
Unverified
37:29
quick question. Yes, sir. So I thank you for sharing earlier a clarification as it relates to these weatherization grants
and that they do include Crittenden County residents outside of West Memphis because I was at a meeting where I asked that particular question of a city official and they primarily told me that it was going to benefit those that were in West Memphis. So one thing that I would like to know, is it possible to get a percentage of those that have applied through the West Memphis Energy Impact Fund, what percentage of those applicants that will be awarded are from the city of West Memphis
and or rural Crittenden County. And I ask that because the data center development is pretty close to a rural, unincorporated community, and I know some of those residents have concerns. They also would like to meet with Google so that they can get their answers to their questions answered directly. And so I just kind of wanted to know if you could speak to that, Annie. Yes,
Speaker 7
38:37
I'm happy to get you those numbers. What I will say in advance of providing
Representative Denise Jones Ennett
Unverified
38:42
them is that the different organizations that we've partnered with are covering different parts of either Crittenden County or West Memphis.
Groundswell has been very quick to start providing services, I'll say. As I mentioned, they've already done 40 houses. They have a 250 household waiting list at this point. Other partners who serve areas outside West Memphis haven't been quite so quick to roll out their services. And so, again, those numbers may look a little skewed at this point, but
Speaker 7
39:15
we're expecting that as soon as the funds have been deployed to their fullest extent,
Representative Denise Jones Ennett
Unverified
39:22
that we'll bring those other numbers up to the same standard. Okay. If
Representative Lincoln Barnett
Unverified
39:26
you could get us that percentage breakdown, I would appreciate that. Definitely. Please provide that to the committee, Ms. Wilson. about a point of contact for
that. We'll see that Representative Barnett gets it as long, and I'm sure it'll spark
some interest with others if you'll just share that information with the committee. Of course. And I understand this is an ongoing fund. This is not a snapshot. This will be a long-term thing, but if you could give us a snapshot of maybe where we are this month,
then I'm sure that would please the people over in that area to know that. Yes, definitely. Thank you, Representative Barnett. Representative Joey Carr, you're recognized. Thank
Representative John P. Carr
Unverified
40:03
you, Mr. Chair. Just a quick question. You said that it was a 20-year contract? With Entergy, yes. Okay. What's the expected longevity on the center and at
the end of whatever its life is, what happens then? I don't know because we've
Speaker 7
40:20
never come to an end of life for a data center yet.
In addition to the 20-year contract period, if we don't say that we want to terminate that contract, it will automatically renew for an additional term. You know until Google says we're ready for this to end We've not done that in a community yet. So I don't have any concrete examples to point to I would expect that Like anything that's decommissioned we would seek to do that in a responsible
Representative Denise Jones Ennett
Unverified
40:48
way that is responsive to the needs of the community in which we're in
Okay, thank you. Thank you. Mr. Chair. Thank you, sir Representative McGrew you're recognized. Thank
Representative Richard McGrew
Unverified
41:02
you. Mr. Chairman and thank you for being here and sharing with us today on the with the demand of power going up in Arkansas pretty drastically now is there any ability I know that your load is pretty standard and stays on it if in the ability that some load needs to be shed because of a demand that hits is there ability within Google to shed that some of that load yes and that is a part of those demand
Representative Denise Jones Ennett
Unverified
41:33
I mentioned at West Memphis. So in the event of a grid stress period, Google will agree, if called upon, to reduce our load for a certain number of hours for a certain number of events per year. We are also looking at potentially in the future implementing distributed solutions. So that could be additional energy efficiency. it could be battery storage at residential households and so there are a number of ways that
one can either reduce demand or add capacity to alleviate that grid stress and we're looking at all of the options.
Chair
Unverified
42:12
Thank you. Thank you Representative McGregor. Representative Torres you recognize? Yes thank you Mr. Chair just one quick
Representative Richard McGrew
Unverified
42:18
clarifying question you'd mentioned infrastructure and who pays for it, and I think you said generation and transmission is a part of that. What about substations or distribution? Yes, I would
Speaker 7
42:32
lump that into the transmission infrastructure component, and so for the substation that was needed at West Memphis, that was included in the payment that Google made for the transmission component. Great. Thank you so much. Thank you. with
no, well, I think you did get back in the queue. Representative Beck, you're recognized. Nice to see you. And he's an engineer.
Representative Rick Beck
Unverified
42:56
He didn't get to pick up on it. I am not, but I wish I was. Thank you.
And please don't take these questions as a negative, because I do believe the data centers, I think we support them, and I do support them. But I am concerned about this demand agreement. And I'm really, the 100 hours a year. You know, we had winter storm URI. That would have exceeded that time period. And that would have been a, you know, and I'm just saying, that would have been a time when we needed power, and Google's own contract would have said,
okay, we did our four days and a few hours, and we're back up. I'm just concerned about the length of that. Other than that, it sounds like you guys are doing a dynamite job of making sure everything's all right. But we've just seen that here, and we just don't want to do it. And by the way, I got the information Googling it. So anyway, thank you very much for coming and talking with us. But I do have a concern about that.
I think there are a number of ways to address reliability. And in
Representative Denise Jones Ennett
Unverified
44:11
light of winter storm URI, the utilities are exploring all of those avenues. So adding capacity, hardening the grid, adding capacity at specific sites is helpful. Demand response, not just from Google, but from other large industrial customers is going to be essential. And so in an event of a winter storm, Yuri, you really need to call on all of those solutions to be able to ride through that event.
They are few, but they can be catastrophic if we don't respond to them in the right way. And so I think Entergy is, like its other utility partners, looking to explore all of those avenues, connecting with its neighboring utilities to be able to share power. when an event like that hits the
Speaker 7
45:01
grid to avoid some of those impacts that we've seen historically from those winter storm events. Okay.
Thank you for answering that question. I appreciate
Representative Beck. He's one of our more technically oriented members and his former co-chair. You've got to have a lot of tools in the toolbox.
He's got all that. Ms. Wilson, any final thoughts? Just that Senator McKee
Speaker 7
45:26
was right and that I do have to head to the airport shortly after this but i'm happy to respond to additional questions if there are any and we've noted the questions that were asked today that require a response to the committee and i'm happy to provide those as quickly as i can
great thank you you were a very informative
witness and uh we may very well be taking you up on additional information i
Representative Rick Beck
Unverified
45:49
would love to continue the conversation thank you so
much for having me travels back thank you thank you uh next we'll move to item C to West Memphis we have Mayor McClendon was not able to be here today mr. Bobby Atkins who's a general manager West Memphis utilities and mr. Eric Forster who's superintendent of West Memphis school district y'all both come to the table please and Eric will get you all set up and the same same
routine just you will identify yourself to the record and
I will recognize you one at a time thank you mr. chairman for the opportunity to
Speaker 169
46:44
be here please identify yourself for the record so my name is Eric foister I'm the superintendent of schools of West Memphis. Okay, and Mr. Atkins, please do the same. Yes, good afternoon. My name
West Memphis Utilities. Okay, thank you. Now you're first on
Speaker 169
47:04
the list, Mr. Forster, so we'll just let you go first. So I'm
Eric Foister
Unverified
47:09
here because I'm in the kid business, and my job is to ensure the education of our youth, and as we know, we're at a forefront front of education with AI, and so I have to figure out ways to not only educate students but educate our staff on what that looks like, and so when I first came to West Memphis in
December of 24, I had no idea Google was coming, had no idea, so I'm going to talk about the kid business, I'm going to talk about the people business because that's what my business is, And so I'm going to tell a story. So the day after the ribbon cutting, and she alluded there's different groups to Google. They came, and she sat across from the table from me, and she looks at me. She goes, okay, what's on your wish list? And I had no idea what, I mean, how many people does that to you, right, as a superintendent of school? So I didn't have very much time to think, but I already kind of had a thought that I wanted a pathway for our students to go right into the workforce.
At West Memphis, we have kids that almost 70% of our kids do not go to a two or four year college, they go right in the workforce. So it's my job to educate on what they could do, but it's also provide opportunities. So I said I wanted a four year pathway that when they graduate from high school, they could go work for you in the AI and cybersecurity. Well, that's come to fruition. So this fall, we have our first cohort of kids and it's life changing for our kids. The opportunity, I'm not in the data centers. I couldn't even tell you who else has got a data center.
So when I could tell you who I want to partner with to learn more about AI, and that's Google, and that's why I'm here, and to share the experiences that we've had. And not only has it been life-changing for some of our kids, and with your permission, I want to show a quick video to illustrate that, but it has opened up doors in our community that I never thought would have been possible. And I live in Crittenden County, have lived in Crittenden County for five years. So we now have communications with our college about, hey, what are some other companies that are coming?
What kind of pathways can we build? She showed the graphic about the jobs. We need HVAC. We need construction. That's my job to now provide that. It's opened up. It's created the demand for us to really focus in on providing those opportunities for our kids. And that's my job, and that's what I'm passionate about. I'm very proactive. I think outside the box, and so does Google. and so the next thing that we did we did a summer program you'll see here quickly to expose our kindergarten to fifth grade with robotics with coding and this is not my world
so I grew up I remember I was still teaching when Google came out right and everybody was fearful of Google then let alone what it is now with the AI tools that we're all most of us in here use it We either knowingly use it or use it for a purpose. So I want to get ahead of that. We want to be at the forefront. West Memphis schools, our community, we want to be at the forefront of this. And the only way I could do this is with the partnership of Google. And quite frankly, this has been a thought partner. So I'd really like the opportunity, Mr. Chairman,
Speaker 169
50:21
to show a quick video. - Please, please go ahead with it. As you know, we started a little late, so I want
Speaker 177
50:40
you to be able to get that in. So go right ahead. Technology is not decreasing in our lives, it's increasing in our lives. So how do we make sure that young people see themselves as leaders even in the space such that they can also happen to the technology instead of the technology happening to them.
at Jackson Wonder Elementary School in West Memphis, Arkansas. This is a creative, innovative collaboration between a community organization like Code Crew, as well as a world-class technology company like Google, as well as an innovative school district. It's been a great partnership. It started with Google. One of the
Speaker 178
51:14
first things that came to me literally after the ribbon cutting is, "What's your wish list?" So my number one wish
Speaker 180
51:21
list was for an opportunity for our kids to have a pathway through high school So when they're done with high school, they go right into the workforce with skills that
Speaker 181
51:31
can maybe work for Google. For me to be able to code in fifth grade, I actually really like it and I love coding because you get to learn about
Speaker 177
51:41
new things. I love to see the light bulb go off in each and every one of them as they realize that the things that they're learning in terms of being tech
Speaker 180
51:49
producers, none of that is rocket science. I hope that we kind of set the standard for how to embrace this, how
Speaker 181
51:55
to embrace the AI world. I want educators to know that learning about new things is actually good for your brain
so you can know about them when you get
Speaker 184
52:04
to higher grades. I want students to come back to talk to our current students and tell them, "Look, this opened up
Speaker 177
52:10
my life to do this." Ultimately, it's them deciding that this is something that they can do, them believing that this is something that they can do, and they need the guidance and support of those who believe in them. that's
Eric Foister
Unverified
52:33
just a snapshot if you i invite anybody to come to our school district i'll take you
into a classroom or take you to a student that google has affected so either directly or indirectly so um i understand the let me phrase it i don't understand all the politics that's not my world i don't want it to be my world my world is is education but i know in my world I have 600 employees for over 4,000 students it's important for me to make sure I have all the information before I make judgment and before I make decisions and I think in today's world we sometimes jump at information that we
don't really get all of it and I think we've all experienced that as of late and I also have a saying that Facebook is not real to me other than an information tool anything else that's it I rely on face-to-face I rely on relationships and and there's there's the google has done that they've they've proven they're not just a big brand they have proven that they're truly uh partners in this and i can i could sit here for hours on end but at this point i want to answer some questions that anybody might have
okay mr forster i'll start out by saying thank you for what you're doing and being proactive especially with your students and they're you know just a few years ago these kids were born and now they're going to be moving into a workforce that you're helping prepare them for. I hope you would be willing to maybe mentor some of your colleagues around the state that may be soon facing the same challenges that you've been dealing with, both in the good and the bad side. So I hope that we can work out some manner in which you can mentor them
and tell them what to watch out for and what things to take advantage of. Well, I'm
Eric Foister
Unverified
54:17
not sure mentor is the right word, but work with, because I'm sure I can get some ideas from them more so than us. But I can tell us, I would be willing to do that, and I already have. I've already had some superintendents reach out to say, hey, this is coming down the pipe, or possibly, what can you tell me? So I'm all about it. We're wide open in our city, wide open in our schools, and I really
encourage people to come. Well, thank you. Questions are for, I'll tell you what, I'm going to go ahead and get Mr. Adkins to speak
first, and those of you, if you want to get in the queue, that's fine, but I'm going to let him speak first, and then we'll take questions
Speaker 187
54:58
that might go to either or both. You're recognized, Mr. Adkins. Thank you, Mr. Chairman. So I
Speaker 189
55:03
think I'm going to start, and I'm going to talk about, so in West Memphis, we actually had the luxury that we started with another data center before the Google Data Center came to West Memphis. That really enabled us to learn a lot, and as Ms. Wilson said, I can reiterate emphatically that not all data center developers or hyperscalers are the same.
So from the very beginning, Google, their desire from all interactions that we had with them at the city level before we ever signed any MOUs or CDAs, their desire was how can they be an active part of the community. So from the very beginning, you'll hear or you hear on social media, you'll hear a lot of talk about that they move into disadvantaged or impoverished communities. And West Memphis tends to fit that bill.
But from the very beginning, they had nothing but a desire to improve our community and to invest in our community. So we started, like I said, we started with another developer. Luckily, that developer moved away, and the Google facility came in, and they started talking to us. And we started working through some of the agreements from a municipal level first. I'm actually the general manager of the utility, but I've been involved in that process from the very beginning, and I'll talk a little bit about utilities at the end.
As we were working through the process, we were very concerned and very diligent about making sure that it was a good deal for the city and that the city was going to get a benefit from having them locate there. They were open to every one of those conversations. When we started talking about community development agreements, they were open to that conversation. We were able to work through that. they're making once they have occupancy they will make a sizable contribution to the city annually
and that is really transformational for us at a municipal government level so as we work through all those things we had a memorandum understanding i i will say this as a side note the one thing so we had an nda with google and for future reference if you ever have to pass anything like that at city council make sure that you get a bucky's mou approved at the same time
Bob Atkins
Unverified
57:21
as the google mu because nobody asked us a single word about google everybody cared about
bucky's um but it was a it was a
Speaker 189
57:30
it was a good experience and they had a desire from the very beginning and they've maintained that desire through the whole process we started talking to them in April of 24, and they've maintained that position all along. So they really,
Bob Atkins
Unverified
57:45
there's two components that they operate within. So there's a corporate level that we work with, and then there's a project level that we work with. The corporate level, they focus mainly on benefits
to the community, like the energy affordability fund that we spoke about, that Ms. Wilson spoke about incidentally both superintendent foister and myself
Speaker 189
58:04
are members of that council that advisory council one of the things that I will say that they did a good thing about with that is that the entities that they used groundswell the utility had West Memphis utilities had been working with groundswell they're an established organization and that's what they do and so they partner with them
Crawley's Ridge they manage the LIHEAP funds and for us and so they they already had a pipeline for these individuals and that enabled them to really kind of get in there and start working on that when we start talking about energy affordability and weatherization and winterization on these homes these are families that oftentimes have to make a decision between do I pay my utility bill so that we're not in the dark and we have heat or do I buy food this week? And so this is really transformative for some of these families
in these communities. And like Ms. Wilson said, they've already done 40 homes and they're slated to do another almost 200 by the end of the year. So it is making a real difference for the community. We're also talking to them about, at the corporate level, about investing in other parts of the community. So they're talking to us about public safety. They're talking to us about public infrastructure they're talking to us about quality of life issues and they're willing to help and just like superintendent foister said i would reiterate that their desire is to be a community
partner from the very beginning google's approach it has been that they're going to be in west memphis long term and they have approached every interaction that we've had with them that
Bob Atkins
Unverified
59:41
way from a municipal government standpoint we meet with them weekly and the weekly there's both the corporate and the project side on on the call and we're able to work through issues and we and we talk about uh
Speaker 189
59:54
things that are impacting the city and how they're uh how they're influencing the city as we as we to talk about the project level so the project level those are the boots on the
ground folk and right now at the west memphis site there's about 800 contractors and uh associated folks working on the site they have different projects different initiatives and their and their focus outside of the development is how can they impact the community so they've already gone and the city did not ask them to do this this is their corporate culture and they go in and they do this so the city has they've gone into some of our municipal parks their city-owned parks and they've they've upgraded the parks so they've taken some of
playground equipment they're starting in the low income neighborhoods there and they're upgrading the playground equipment improving the fencing and cleaning the park up and they're doing all that on their own there's been instances where there's been roads and and streets that are close to the development the damage was not caused by them but they just went ahead and called and these are the project folks and said hey we have folks in here and and we'd like to be able to help we would like to come over and and take care of this problem that you have so that's huge
for us because that enables the city of limited resources to be able to use those resources
in other places i'm going to interrupt you if i could uh mr adkins thank you for all that i'm uh we're as you know we started a little late i'm going to try to move us along and you're making very clear that uh at this point in time google's been a pretty good corporate citizen for a new citizen in your community however I did have a question I wanted to ask you about you as the utilities general manager are involved with
infrastructure although y'all are a municipal power company
correct but you're you will not be directly selling to
the google that will be done by energy is that correct that's not correct
Speaker 190
1:01:56
tell me how that will work so as the chairman pointed out we are a municipal utility so
Speaker 189
1:02:03
we are actually an agency of the city and we are actually serving the water service and wastewater service to the site and we're also serving distribution voltage for about 25 megawatts of distribution to the site that that is used for the construction
temporary and then there'll be 20 megawatts of permanent power that will stay at the site that the city is providing to the site now you know
you heard uh ms wilson mentioned that this was a uh
i think she used a different word but an air cooled uh site but you will obviously they use water i mean it's a great big building it's gonna so you you are the water
provider your agency is the water provider for the that is correct project okay so is this for the first
Speaker 189
1:02:47
three buildings the first three buildings will be air cooled there's going to be a total of five we don't know where
buildings four and five were originally we talked to them about water cooled we had conducted studies to make sure that we had appropriate water out of the aquifer that we had the capacity to be able to serve them and so right now the usage that they have pardon me think about it in terms of like a large distribution center so in west memphis we have the bosch distribution center the water usage is roughly about the same and the sewer usage is about the same so it's very minimal water usage
the conversations that we did have with them were about using recycled water and that's still we're still having those conversations with them but there's no negative impact on the water usage for the community and we are providing that okay thank you um we have a
question from representative ladyman who who is that for representative ladyman well uh maybe both of y'all then go right ahead Okay. Maybe both of y'all
Representative Jack Ladyman
Unverified
1:03:47
can respond to this. This is a really big project, and I know y'all have been working on this a long time.
You've got a long history, so you're as educated as any city in Arkansas, I would think. So my question is, big project, talking to a big company. So what was your biggest challenge to overcome to get this project off the
ground? What was the most difficult hurdle? This may be more for you, Mr. Atkins.
Speaker 187
1:04:24
So probably the biggest thing was making sure that when we look at things,
Speaker 189
1:04:30
we wanted to make sure that there was no negative impact for our citizens. From a utility standpoint, that there was no negative impact on water or electric consumption. We just had an upgrade on our treatment plant and we wanted to make sure that there was not a negative impact on the rest of the residents on that treatment impact. And that there was no negative impact for any of our residents or rate payers in terms of utility bills or taxes or anything like that. In all actuality, it's actually having the opposite effect because we're spreading our fixed costs over our larger customer base.
And so 75% of our utility bills are fixed costs, right? And so Google is paying a large percentage of those, and so it actually has a stabilizing effect on our rates. So those were all very important when we started to work through this. But then we also wanted to look at things like how is it going to impact public safety? We don't have a data center in West Memphis. How are our fire personnel going to be able to respond to an incident there? Do they have the appropriate training? when we brought those things up i i can tell you that google folks they were like we we will send
you to any of our other data centers and we will help you to get the appropriate training and tools and equipment to where you can you can do that so those were and then and then the infrastructure around the city we actually built a new road into the facility it had been in the plans for a long time this was the catalyst to help us get that done so it's a bypass for our main broadway thoroughfare that goes
Speaker 190
1:06:03
through town but those were all things that were really important to to us as we were negotiating
Representative Jack Ladyman
Unverified
1:06:09
with them mr foster i might ask you uh you know you the kids you showed
that they're accepting that and they're learning um but what about the adults i mean the the teachers and the parents what was their attitude i mean did you get any negative pushback from any living next to it or whatever or were they all in on what it was going to do for your school so full disclosure i live
Speaker 185
1:06:31
i drive by the facility every day coming into work and quite frankly i
Eric Foister
Unverified
1:06:35
didn't know it was actually coming till i actually got there so i didn't hear a whole lot of negative things at all and you know kids are kids you know if it's not a
video game or right in front of them social media they're not they're not privy to all the things but as far as parents and community teachers i mean this has been embraced uh as a whole in our community and our school
Speaker 189
1:07:00
system as well thank you if I could just tack on to that we did a lot of work up front talking about how it wasn't going to have any of those negative benefits we didn't name Google but we talked about the positive benefits that a large development would have for our community and how there
Bob Atkins
Unverified
1:07:17
would not be any infrastructure issues or problems that
we weren't going to use water up or use all the electric or make rates go up and So we did a lot
Speaker 189
1:07:26
of work up front to the community, with the community, through town halls and kind of grassroots messaging to kind
Bob Atkins
Unverified
1:07:32
of take, to talk about all those things in advance of the announcement. And we've realized a lot of success with
that. Okay. Thank you. Before we go any further, I just want
to tell everybody that I'm going to be a little bit shorter with my time I'm going to allow, simply because we are going to try to get out of here before dark 30.
And it is a little warm today, so
I know y'all can't wait to get back out in the heat. But Representative Magruder,
Representative Jessie McGruder
Unverified
1:08:04
you're recognized. Thank you, Mr. Chair. Just have one question or a statement. Wouldn't you both agree that you have two of the best state representatives in the
Speaker 211
1:08:13
state of Arkansas? That question's out of order. That wasn't rhetorical, wasn't it? But I'll let y'all answer it.
Eric Foister
Unverified
1:08:24
Was that a rhetorical question? So I can honestly share that I try to keep them in the loop with everything we do. And what's good for our community is good for schools. And what's good for our schools is good for the community. And so we – I can't – I mean, jokingly, I think you know just by him making that statement, you know where we're at with our relationship. And I respect them both, communicate with them both. They have been extremely helpful to me personally as well as to the school.
So whether it is a superintendent or a utility manager, I think everybody in this room on this side of the table agrees that it's great to have those communications and good relationships. So thank you, and I will not rule your question out of order, Representative McGregor. I have
one more in the queue, and that's Representative Brooks. You're recognized. Thank you, Mr. Chair. I appreciate the
Representative Keith Brooks
Unverified
1:09:17
latitude since I'm not on this committee, but obviously given the last question, there's a broad latitude to say things on this committee.
I appreciate it. Thank you, gentlemen, for being here and the information that you're providing. Mr. Foyster, this question is for you. Relative to funding for the school district, obviously we know that we're funded based on the uniform rate of taxation, property taxes. Has there been any discussions or projections made about how that would impact you? I saw a recent story about a metadata center in a parish in Louisiana that had significant positive impacts for the teachers in terms of annual bonuses.
So have you had any projections made or discussed with Google about how this might impact the schools in Crittenden County? So I'll answer it in two parts.
Eric Foister
Unverified
1:10:05
So the first part is obviously the revenue from the tax. so we we still don't have exactly i'm still trying to plan that out as a superintendent i'm trying to plan out two three four years ahead so i don't know what that tax revenue is going to be and as you know with school finance just because our revenue comes up we may lose funding because of
the equalization so we're trying to figure out where that balance is and what our increase is going to be but there is going to be an increase so the second part we've had internal conversations with google about other projects other things that we want to do to support our district we have some facility issues we're blessed with some resources but facility we have one of the oldest high schools in the state of arkansas so we're looking at those type things my first thing is
is about our people because you can't it's hard to find teachers and it's hard to find good teachers So then I'll make a plug. We've got one of the first merit pay We have our own school district merit pay in West Memphis schools, which is about four hundred thousand dollars We're going to divvy up on teachers. So it's significant. So that's important to me But I don't know how to plan that out yet until I have all the information
Speaker 185
1:11:17
and I right now I don't have all that Okay Thank you, and I give a
little leeway to representative Brooks while he is not a member of this committee
He is chair of the House Education Committee, and I knew he would have a relevant question for you. So thank you for that.
With no further questions, thank you both for coming and for the hard work you're doing to serve your folks in Crittenden County. Thank you for the opportunity. Thank you as well. Next, we'll have a presentation by Andrew G, Mr. John Bethel, Director of Public Affairs, and Mr. David Palmer, Vice President of Regulatory Affairs, if you two would come forward.
uh and and i also need to give the committee another heads up here i think this one might take a little longer than some of the others and i might cut if i do cut it off it would only be because i've recently learned that we will probably be scheduling a a another meeting in about four weeks and uh Mr. Bethel you'll get to come back then so I'm only saying that is that I'm usually
we have a hearing like this we flesh everything out we're not going to go on and on and on with this
today I promise you that we have some hard deadlines and we will we will get out of here but with that Mr. Bethel Mr. Palmer I will ask you to introduce yourselves for the record and then you're
recognized. Good afternoon. I'm John Bethel. I'm Director of Public
Speaker 218
1:12:55
Affairs for Entergy Arkansas. Afternoon, David Palmer. Turn your mic on. Show him how to do it, John. That
button. David Palmer, Vice President, Regulatory Affairs, Entergy Arkansas. Thank you.
Speaker 223
1:13:12
And good afternoon, Mr. Chairman, members of the committee. We're pleased to be here and to assist and we'll obviously show up anytime you need our help. We're glad to do that. I just want to hit on a couple of things before I take questions, but just we are pleased to help Power Arkansas. We're pleased to help support the health and welfare of the communities that we serve and the customers we serve in those communities. And part of that is ensuring that we are able to provide reliable and affordable power and serving large customers such as a steel mill or a manufacturing facility or a data center helps toward that.
because as Mr. Atkins mentioned, a large customer pays a large part of the utility's fixed cost, which helps cover costs that customers would otherwise pay. And with our data center customers, we are contracting with them under our Fair Share Plus pledge. And Ms. Wilson touched on that a little bit. It's we contract with those customers to ensure that they pay the cost to serve them, Plus, they pay additional amounts that help bring down the cost to our other customers.
And that has real benefits in terms of utility rates. And so for our relationship with Google and our contract with Google, it does provide over the life of the contract that they pay for the cost to serve them, plus additional costs that bring down the cost that other customers pay. For example, if it costs, real simply, if it costs us $100 to serve Google or a large customer and they pay rates that produce $130, that $30 increment is the plus that helps to offset costs that other customers would otherwise pay.
And you've probably seen information published in the newspaper about the Google contract specifically. And it's not complete, and there is more to the story than what's been published. But you can use that information alone to also demonstrate that Google is paying the cost to serve them plus. The amount that it cost to serve them as reported was $1.6 billion. The revenues from their contract is $2.1 billion.
The half-a-billion-dollar difference is the plus that helps bring down costs to our other customers and pay costs that our other customers would otherwise have to pay. You've probably seen information about the Generating Arkansas Jobs Act that you passed to help support growth in Arkansas. And as a part of that, there is a charge on customers' bills as we build facilities that are approved by the public service commission and the financing costs during construction are recovered through that charge on customers bills and by doing that
customers realize a benefit of a gradual change in rates rather than a large change in rates all at once and then on the back end by paying those financing costs during construction they don't pay those financing costs over the life of the asset which results in a long-term savings to customers. And our customers are seeing on the Generating Arkansas Jobs Act costs associated with financing the construction of the Ironwood facility in Hot Spring County, the Jefferson
Power Station in Jefferson County, and the Cypress Solar Facility that's also located in Jefferson County. And those charges are on the customer's bills because those resources serve all of our customers and particularly the the cypress solar facility will provide energy cost savings over the life of that facility in the neighborhood of 245 to 650 million dollars that our customers will see over the life of that facility and when google begins operating the
revenues that they produce will more than offset the amounts that our customers are paying through the generating arkansas jobs act that's a part again that's part of the plus associated with our fair share plus contracting with data center customers and so with that and in the interest of time uh david and i are available to to
answer questions that you may have of us okay thank you mr pethel i know this is a shock to you but i do have some questions I have been following the things going on that were reported in the Democrat Gazette, starting with the fact that you folks didn't seem particularly happy about the fact that there was a FOIA request made to the PSC and some people received some information related to this.
And I would be remiss if I didn't say I'm disappointed to see energy suing in federal court over a First Amendment issue. But Judge Rudofsky seemed to, at least for the time being, kick that can down the road. And I guess to the extent
you can comment on this, and I don't badger witnesses to comment on something that's in litigation, but this was unprecedented. I've never seen anything quite like this where, you know, someone came in and even my understanding, and again, correct me if I have this information wrong.
That's why I'm saying we're going to come back in October and look at this a little more carefully. But did Intergy in their filing specifically ask the judge to have the Democrat Gazette remove the information that was published from their website? I'll try to
Representative Ashley Hudson
Unverified
1:18:57
take that, and thank you for the question, Senator Johnson. Let me go
Speaker 226
1:19:02
back and reframe it a little because we didn't sue on behalf
or have an issue with a FOIA request to a state agency. That was not our issue. I believe state agencies respond to those all the time. When we were made aware of the information that was obtained through the FOIA, it was clear to us that some of that information was protected pursuant to a protective order at the APS-C. That was the basis of our request to federal court was to keep that information that is subject to that protective order from public disclosure. And the judge disagreed on the basis of some First Amendment arguments that I couldn't
articulate. But that was the only basis. We were seeking to protect confidential information that would not have otherwise been publicly disclosed, but for the
Speaker 228
1:19:50
inadvertent release. But it was released, and did you all ask in your – and this
is something that's been writing. It's not like you whispered it or anything. Did you ask that Judge Rudofsky, in his order, tell the Democrat Gazette to take it off their website? I mean, it's already been published. Some people may not know this, but they actually do have paper versions you can go buy if you want one.
I mean, I get mine Monday through Saturday electronically, but there actually is a paper copy. Is that correct, or did I misunderstand that? I would say we made two requests, was
Representative Ashley Hudson
Unverified
1:20:28
to the extent that could be redacted in some form,
Speaker 226
1:20:31
even though public disclosure was largely, to your point, already made on that information. Yes, we were asking for the judge's direction on how that could be accomplished. We were also aware that there was additional information that was also released in that FOIA that had not yet been made public.
And we were also focused on ensuring that that information did not subsequently get released. Okay, well, but the judge did deny
at least, and this is all temporary. I know you haven't had a long drawn out trial about this, but he did deny your request to order the newspaper to redact that or to take it off their website. Is that my
Speaker 223
1:21:12
understanding correct? Yes, sir. And, Senator, the information was inadvertently released in response to the Freedom of Information Act request. It was information that, as Mr. Palmer pointed out, was covered by a protective order
because it was customer-specific, commercially sensitive information that warranted protection from disclosure as determined by the Public Service Commission. And also, we would take the same approach to any customer's information. It is our obligation under law, and it is our obligation to take care of information that we have that's customer-specific and not to have that be disclosed. That was the issue. It was not a matter of challenging whether a Freedom of Information Act request is appropriate or not.
It was a fact that information that shouldn't have been released in the response was released, and it was trying to protect information that's customer-specific, just like we would do for any other customer that we
serve. Well and I appreciate that and being one of your customers I would want you to talk about my information although I did bring my last bill and I have a couple questions of you the and again as I said we're going to come back to this in in October but I have had pardon me for saying it
this way I have had problem digesting this stuff I'm the chairman of this committee I've served on it since i've been in the general assembly and uh this whole thing uh starting with generating arkansas jobs act and subsequently is i've it boggles my mind sometimes to to figure this out to sound like it's like with abbott and costello it's who's on first and who's on second and i've had constituents that are pretty intelligent and uh smart people they try to come up and they say
that it looks like a shell game to them first thing i want to ask about is uh in the and i i'm going to use this figure contested if you wish the 577 monthly fee for the three power generation projects you referred to uh i got my bill this is my latest bill and my if y'all haven't ever looked at your bill look on page two if you have an energy bill and it'll say current charges and and then it'll say energy charges, and at the bottom it says the Generating Arkansas Jobs Act.
Well, mine wasn't, you know, $5.77. It was $22.81. Now, I know that it's been hot, and I know that maybe I have a bigger house, but still, that's a whole lot more money, and I don't know where you came up with the $5.77. I assume that's some kind of an average or a median because there's obviously There may be somebody out there paying less than $5.77. Can you spread some light on this?
Representative Ashley Hudson
Unverified
1:24:07
Sure, Senator. Let me try. As you noted, usage is up right now because
Speaker 226
1:24:12
of the heat, right? Residential customers pay a volumetric rate, meaning you pay per usage. You heard Ms. Wilson describe how some customers pay a demand charge. You're only paying a rate that's expressed in terms of cents per kilowatt hour. so if you're using a lot you're going to pay more we have for i'll say decades utility has quoted our rates on an impact of a thousand kilowatt hours of usage so the five dollars
and 77 cents is quoted as on a thousand kilowatt hours so if yours is four times that amount then you've got four times more usage than the way we
quote our standard rate well mine says three thousand nine hundred and seventy four kilowatt hours during that billing period and then it says the rate be the difference point zero
zero five seven four which is about five well a little over half a penny per kwh that's that's
how I'm looking but again we're gonna we're gonna I'm not gonna drag this thing out but we're gonna look at this once I actually have a chance to read all this stuff hear from the PSC and and and come back on this and I guess I will finalize what I'm doing and we've got people in the queue
how much of that of my $22 and 81 cents is paying for Google or any other data center or shall we say
large customer because that's certainly a
an issue that has been debated both directions and you're talking about how they're paying for it but you know when this bill came up and you remember I called it a
cost shift I say you're in the old days before you had the rider your company would go to the capital market whether it's issuing bonds or or you go to New York banks or or get your
stockholder equity to pay for but you know
the facility that generates power you guys paid for and now we the rate payers you know and some of us may not live long enough to see these plants finished are paying for it right now now some of the justification is well we don't want to hit everybody with a great big bill all at once well for 100 years we've been doing it this way why is it suddenly not going to work to use the traditional model where if you're a private
company a regulated utility you get a guaranteed rate of return determined by the psc and but you you know you pay your own up front cost if if sam walton wanted to move to my come to my hometown of conway which he did a long time ago and built a walmart store he didn't ask the customers to start paying up front before they bought the first you know uh shirt or pair of socks in that walmart But this is what we're doing now, and it's a cost shift that I'm not sure it completely parallels this issue with data centers,
although obviously they are a big industry, a big user of power, and you guys are dealing with them, and thank you for doing that because I support the data centers both for our competitive factors with our adversaries around the world and the fact that, you know, I've got one of these things and I want it to work. But I just want to know, suddenly I've got another extra $22.81,
and how does this all tie together?
Speaker 223
1:27:51
Under the legislation and under the charge that's on your bill,
you're paying costs that you would otherwise pay under the traditional method. Under the new method that was approved under the Generating Arkansas Jobs Act, you're paying the financing costs associated with construction during construction. Under the traditional historic method that was in place before that, we would spend the dollars accumulate those costs add that to what the cost of the plant was that we put into service and customers would pay those exact same costs plus interest over the life of the asset which cost more than paying those costs on the front end during construction and not paying
them on the back end as I talked about earlier it's the same cost but it's a timing difference it saves money in financing costs that customers pay and it saves money in what actually comes out of their pocket over the time that the assets in service serving them and the assets that are included the three power plants currently are going to serve
all of our customers well i guess i'm trying to differentiate how much of this comes from uh in this case we're talking about google is one but we
know there are others uh and how much is just the the usual growth because we're
uh uh again i've talked long enough i'm going to move on and let some other people ask questions and first up is representative meeks thank you mr chairman
Representative Stephen Meeks
Unverified
1:29:15
way over to far right uh so i just had a follow-up question on the solar facility that's being built to help support this project um is there going to be
any battery storage added to that uh solar project because i know one of the concerns that have been mentioned before is the demand response what happens if we get into an emergency situation obviously having that backup energy available
would go a long way towards helping to relieve that issue so just curious if that was part of the the plan
Representative Ashley Hudson
Unverified
1:29:46
here uh yes rep it is it's a 600 megawatt solar facility and a 350 megawatt battery energy storage system be part of it okay all right
thank you dad okay uh senator mckee you're recognized. Thank
Senator Matt McKee
Unverified
1:30:01
you, Mr. Chairman. Thanks for being here. Appreciate you.
So my concern surrounding the use of the rider for this project, whether it's Cypress Solar, is maybe you can help
me understand why Intrigy decided to take the contributions made by Google and apply them as other contributions instead of kayak payments. And help me understand the process of why that
benefits rate payers. Because unfortunately, I don't think that's how most rate payers look at that right thank you and it's
Speaker 226
1:30:31
it is a little hard to explain also so if i can maybe take it in pieces so if you step back and think about the timeline that miss wilson explained you
know they're they're actively pursuing construction of their facility with an expected in service date sometime next year with some level of needing to add their load in increments as they ramp up their data product whatever it is their ramp um we're faced with needing to get the facility under construction and completed because we need it to sync up with the load coming online we also are pursuing advantages through the tax code so we get tax credits for that facility that
there are requirements that have shifted even before even as we were negotiating with google so from a timing standpoint we're faced with well we've got to get the construction started we need the financial support to support the construction of the project there's also this build out that google's going to have to do before they're actually spinning that meter and paying those rates so so the the rider became the mechanism for cost recovery which included what mr bethel just described which was to go ahead and begin recovering some the financing cost support for
that resource which again all of the energy cost savings go to all customers as well so there's a bit of a you you're paying for all the costs but you're also getting all the benefits what we further did was design google's rates where they would cover the full cost of their service so there may be a line item on the bill that says here's a cost that they caused but their rates are designed to more than cover that cost it's just individually called out on the bill through
Senator Matt McKee
Unverified
1:32:17
the rider and will that be demonstrated over how many years i mean i i saw the report in for the godger rider that you filed last month i believe with psc so is that over is that over five years that that happens or what what does
Representative Ashley Hudson
Unverified
1:32:32
that look like we we've we filed the rider in early march the rates went in effect in june and we provide a five-year forecast of what those rates look like but we're talking over the life of Google's entire contract. And back to your other question relative to the kayak treatment or the non-kayak treatment,
Speaker 226
1:32:50
there were advantages both to the company and the customer for how we approach that single question. So I don't want to speak on behalf of Google, but there may be accounting or tax reasons why you wouldn't want a payment to a utility to be a capital payment towards an asset. From our point of view, the benefits come back either way because you're still going to offset the total cost of that resource by that amount. It's just whether you do it all at once or over time.
What we provided in our filing with the commission was what we fully expect. We see that the rates,
Representative Ashley Hudson
Unverified
1:33:29
because they are higher than the cost to serve, are already putting downward pressure on rates. So that opened the door for alternative
Speaker 226
1:33:36
treatment to further spread those benefits out over a longer period of time, ultimately getting to the same place. But you get the same benefits for all customers, but instead of being all at once, you get some rate smoothing, but also now you have long-term benefits.
Senator Matt McKee
Unverified
1:33:53
Okay. Because when you take, whether it's a $500 million or $600 million contribution from Google, I think what a lot of people expected was you don't have to request $1.6 billion, you know, in rates, uh, through the rider, right? You, you know, you just, you ask for one. And so that's, that's the short-term thinking, right? But I think that that explains why. Well, we,
Speaker 226
1:34:14
we take a step back. So what we would say is in this example, instead of 1.6, it would be 2 billion. So we're not putting 2 billion in rates. We're putting 1.6 in rates.
Representative Ashley Hudson
Unverified
1:34:27
The question is, are we collecting that rate through the rider or through some other mechanism? Either way, Google's revenues come into the equation and
Senator Matt McKee
Unverified
1:34:38
they offset all of our costs. Okay. And last question, Cypress, that helps fulfill obligations that arose out of the consent decree, right, that called on the cessation of burning coal at Independence and White Bluff. Does that help fulfill those obligations? I'm recalling the,
Speaker 223
1:35:04
It's part of the resources necessary to replace the generation that we are from ceasing to burn coal, but it's not the entire amount, but it's part of our resource mix going forward. And as you and I have talked about, we have an adequate amount of dispatchable generation that's available all the time and then the renewable resources that we have provide fuel cost savings that will help all of our customers as well. Okay. Thank you, gentlemen. Thank you,
Mr. Chairman. Thank you, Senator McKee, because you kind of phrased the question I had a little more succinctly, and I appreciate the answer on
Senator Jimmy Hickey, Jr
Unverified
1:35:50
that. Senator Hickey, you're recognized. Thank you, Mr. Chair. Mr. Bethel, of course, we know whenever the CWIP bill was done that yourself and some others and probably about five or six of us sat in my office for hours upon hours. And what I remember from every legislator that was in there,
basically every legislator in there, that the number one thing that we were going to worry about was rate payers. We understood that you all had shareholders. Although you're a monopoly, you're also a publicly traded company. And that was stated over and over and over again. And if I remember correctly, we had a 16-page amendment that went on to this. And the original one didn't even have the PSC in there. And, of course, you know, we've got through all this, and I've heard what some people say. You know, I don't particularly like this bill.
But you all sit down there, and you sit there, and you say, well, it's better that we're doing it this way because, you know, it's getting spread out, and the rates are less. But in my mind, I want to see that proved up, and maybe through the PSC and Mr. Webb. You know, I want to know that you all agree with that and publicly out there, because from my standpoint, I want to know that if you did do the financing less,
so in other words, if it wasn't put on the bill, if you took that money and just went straight to it so that that construction work in progress was not put on that rider, that it would not be more beneficial, you know, to our rate payers, which are our shareholders. I don't blame you for what you do for your shareholders. And, Mr. Palmer, I don't really know you, but read what you said in the paper. Also listened to what you said in here. You know, you said that, you know, it does help cover all of our costs.
Well, I assume all of your costs are also part of your dividends that you're paying to your shareholders. So, you know, from my standpoint, yes, I can see where the way that you're doing it does cover your cost, which I assume, wouldn't you agree, that a dividend's part of your cost, but that's for a benefit of your shareholder, which if we just applied it directly to the CWIP program and we didn't put this on the ratepayers bill, Y'all's earning per share may be less, but at least it wouldn't be on our ratepayers' bills.
I don't know, you know, I can sit out here and listen to all this, but I don't know how we justify that. I was hoping that since we put this back through the PSC that this type of stuff would be covered. But at this point right here, I think that there's enough people out here that need to see that, and need to try to understand it so that we can relay that back to our shareholders, the rate payers. So I don't know if you want to comment to that or where we go with that. I personally do not like what I'm seeing.
Speaker 223
1:38:45
Well, Senator, I appreciate that. And all of the costs that are included in the rider were authorized by the Public Service Commission, and they're subject to Public Service Commission review throughout. And they are costs that would be recovered one way or another. The traditional method that's been used in the past is to accumulate those costs during construction, add them to the cost of the facility, recover them over the life. I'm well
Senator Jimmy Hickey, Jr
Unverified
1:39:07
aware of that little spin that we put on it, you know, with the financing cost and this and that. And that only works, I guess, as long as everything's on the up and up.
It's just, you know, I have to look at it from another standpoint that although $5 a month is not going to draw any interest for anybody, the cumulative effect over the whole rate payer, you know, the lost interest that they're going to be receiving during the time that you normally would build and was paying your own interest and those costs, you know, we had to calculate those in and net those out. So, you know, I can look at it a different way like that, but I just, it just seems odd to me. It just seems odd to me that with as much talk that was done whenever we were trying to prepare this amendment,
And it's a complicated bill. I mean, I'll be the first to say, and it's even hard for me to understand, being involved with it some. But it's hard for me to understand, whenever you look at this thing, that from y'all's standpoint, and this is your responsibility, that your responsibility is to your shareholders, why that you wouldn't have reduced the cost of the CWIP instead of doing it the way that you've done it. And I just think that that needs to be proved up, and once it is proved up, I would like
an explanation from the PSC and maybe some other attorneys and things like that, that this is the most effective way to do it for the rate payer in this case. So, Mr. Chair, that may be more of a statement, but like I say, I just... Would I agree? Is
Senator Jimmy Hickey, Jr
Unverified
1:40:44
because I don't know, and I don't think any of us know.
Senator Hickey, you have brought forth something that is the reason why I see us coming back next month and looking at this maybe with a little bit better magnifying glass.
A lot of the information that we're talking about today is stuff we've just learned. Whether the articles in the newspaper were correct or not, we don't know, but they've been thrown out there, and it's data that we have to deal with. So I appreciate your comment. I agree with your comment, and I want to give Mr. Bithell and Mr. Palmer a chance to respond. But I can also tell you, gentlemen, if you all want to wait about a month, we'll be back and maybe have our questions a little more concise.
But certainly feel free to respond to what Senator Hickey said. Yeah, we're certainly happy to
Speaker 226
1:41:40
come back. I would say, and I don't want to take the wind out of Chairman Webb's sails, but they did, when we got the rider through the regulatory process at the APSC, they did establish some reporting requirements around some of the very questions you're asking. So we can expand upon that when I have it in front of me, but the cost comparison, the jobs, and all the things that the law addresses, the commission was very intently focused on when we brought that rider before them.
So there is some reporting obligations that we have that feed into their reporting obligations as well. But I don't want to speak on their
behalf. Okay. You'll be recognized. You can go to the top of the list, Senator Hickey, at that time.
Okay. Thank you. Representative Ennett, and I'm going to encourage you to be concise and quick.
Representative Denise Jones Ennett
Unverified
1:42:32
Yes, sir. Thank you, Mr. Chairman. I have a question, Mr. Bethel.
How much additional generating capacity will be needed for the Google and Little Rock in the bio data centers? Yeah, if
Speaker 226
1:42:52
I could take that. So beyond Cypress Solar that we've discussed, we don't have any additional plans because of those two
Representative Denise Jones Ennett
Unverified
1:43:02
customers. And will residential customers be paying to finance the construction?
you mean of cypress solar for cypress solar no for the um yeah for cypher yes yes that thank you
Representative Ashley Hudson
Unverified
1:43:16
that was part of our discussion of what's currently in the
Speaker 226
1:43:19
rider so cypress solar's financing costs are currently on bills in that rider okay one more question but
Representative Denise Jones Ennett
Unverified
1:43:30
you better be quick how was steel river solar in Mississippi County be used steel river is
Speaker 226
1:43:37
a independent project that Google pursued on their own so we don't currently have any interaction with that facility they they negotiated that on their own behalf and
they they dealt with the counterparty okay thank you thank you representative in it senator Penzo and I'm not putting you
Senator Clint Penzo
Unverified
1:43:58
seriously under the gun but please be mindful of our time I'll make it snappy thank you mr. chair what's the expected energy consumption of the Google data
Speaker 226
1:44:08
center I don't believe Google has said publicly exactly what their total demand yes okay so we don't I'd be careful I wouldn't want to
Senator Clint Penzo
Unverified
1:44:20
disclose it on their behalf okay so we don't know if the 600 megawatts over or under what we need is that
Speaker 226
1:44:30
accurate well it's not public i would say we have demonstrated we have adequate generation with the addition of their load when we put cypress solar into our what we call production
cost bottles which is how we model the entire bulk electric system with our load decide what resources we may or may not need when we put our generation fleet in the model with their load and cypress solar we see resource adequacy and we see our cost say we see cost savings because our variable supply comes down those are the cost those are the energy benefits that
Senator Clint Penzo
Unverified
1:45:07
facility okay quick quick follow-up on that uh so is the did did i
catch you saying that the the
Representative Ashley Hudson
Unverified
1:45:18
whole project's a two billion dollar project i think you're referring to mr bethel's
Speaker 226
1:45:25
intro well i mean oh well my on cypress solar on cypress solar only rough math we've got the cost estimate is 1.6 billion but that is exclusive excluding the financing cost we would otherwise put into that and recover over
Senator Clint Penzo
Unverified
1:45:39
the 30-year useful life okay and the full 1.6 billion cost is part of that 577 a month that goes to the right payer that full 1.6 billion
Speaker 226
1:45:49
no right now and don't quote me on the math we've got that five-year forecast that senator mckee discussed for the rider so we're in year one of the construction activity so of the five dollars and 77 cents per thousand kilowatt hours that we quoted there's about a dollar 76 that would be attributed to cypress solar that reflects the year one financing cost or the support for the financing cost for the year one capital outlay the full 1.6 wouldn't be in rates until it goes
completely into service in a couple years i can't remember the exact date and what's that change
Senator Clint Penzo
Unverified
1:46:29
the 1.76 what will that change to in the operational year i would be speculating if i try
Speaker 286
1:46:42
that's good for now. Thank you. But it is just the financing cost is all that's recovered during the construction period. And then the total investment is recovered over the life of the asset, spread out over the life of the asset. It's
not all recovered at once. Okay. Thank you, Senator Penzo. Representative Hudson,
Senator Clint Penzo
Unverified
1:47:01
you're recognized. Thank you, Senator. And I appreciate you letting me ask a quick question. And this kind of taps on to what Senator Penzo was asking you all about. I was looking through an old article from the Demgas from March while everyone was talking. And this was one of the first references to the $5.77 rider. In that article, it was reported that Intergy estimated residential customers would see a monthly increase of $7.09 in the first year.
And by year five, customers could be paying up to $21.85 a month. which would be four times what people are paying right now if you use the $5.77. And then if you look at what Senator Johnson was paying, which is
Representative Ashley Hudson
Unverified
1:47:44
already 20-something dollars, can he expect that his is going to go up to $80 in
Speaker 226
1:47:52
the next five years? No. Thank you for the question. I believe the March article was referencing when we – don't quote me on the math,
but we had proposed a different cost allocation than ultimately got approved by the commission. And so there may have been some reporting on what we had said previously. The legislation laid out a process where we had to go to the commission to get the rider established. And then we provided our first update to that rider this year. So when we went in last year to get the rider established, we do the utility rate making. here's how the costs come in, here's what would go to residential if we do this approach
versus that approach. When our filing had a cost allocation among residential, commercial, industrial customers that was that original math, and then what the commission approved had a different allocation. So when we quoted the approved, the residential number went to the $5.77. so so rate
Senator Clint Penzo
Unverified
1:49:06
payers don't have to worry then that this this five dollars and 77 cents or whatever
they're paying right now is going to go up by four or five times in the
Speaker 226
1:49:18
next five years is that is that accurate well we file a schedule that shows exactly what it's going to go up by based on the capital outlays we see for those resources so it will increase because we're building those facilities but when they're built it stops to mr bethel's point at the fully cost at the full cost of that plant and then that's it and then that cost is depreciated over the life of the asset so all we're what we're talking about is instead of the rate going up to the full amount and then
depreciated down we're able to get some level of support now and that reduces the overall amount that then depreciates over time but we we provide that forecast in our rate
filing okay thank you representative hudson uh senator ervin you're recognized does
Senator Missy Irvin
Unverified
1:50:06
that rate forecast ever get uh changed the rate
Representative Ashley Hudson
Unverified
1:50:14
forecast in the rider i think it would move if i were because
Speaker 226
1:50:18
when we say the financing cost we're basing that on how much capital we have to spend so just to make up a number if we have to spend 500 million dollars next year to support building those three assets we're going to recover the financing cost for the 500 million if that 500 swings because of how we've contracted with this construction company or that because we're using cost estimates for building these resources that would move it but otherwise it would largely
Senator Missy Irvin
Unverified
1:50:48
follow exactly what we filed and at any time that you make any kind of an adjustment to that rate schedule or
increase that goes before the psc at any time or is it just at a certain time of the year can you do that
Speaker 226
1:51:04
without going no it's a it's a we update it annually just like our other mechanism so we'll file early march for rates for june every year and the the
Speaker 286
1:51:14
law provides for an annual filing so it's a once a year revisit of of the setting of the so you can only adjust it
Senator Missy Irvin
Unverified
1:51:23
once a year you can't adjust it any other time that's only once a year yes ma'am okay and then like you said based on whatever you spend whatever you presented to begin with as far as an estimate to representative Hudson's question the math is going to be different or is it going to be the same that you presented or it could change it should largely be
Speaker 226
1:51:45
what was presented I'm just noting that those numbers may shift a little because we are building three large resources so over a three or four year construction window things might move a little but it should largely
track what was filed okay okay thank you senator um mr bethel mr palmer thank you for coming we're as i i warned you i guess i should say we're gonna have to come back
and talk about this some more And committee members, I spoke with my vice chair, Senator McKee, and we're trying to work out a thing so we're not here for another two or three hours. And so we're looking
at, since we really, this was not just about data centers, it was also about rates and the rider and the charges.
I'm going to kind of try to bifurcate this subject. We're going to hear from items 6 and 7, which is Central Arkansas Water and Little Rock Water Reclamation Authority, and then we will set a new agenda for our next meeting that will include, of course, energy, but also electric cooperatives and the PSC. And I want to apologize to Mr. Haston and Chairman Webb and Ms. Hofer for this postponement. I know, Doyle, it's not the first time you've had to sit
through a hearing and you didn't get to your bill or whatever.
But I also want to say to Chairman Webb, our prayers are with Justice Webb for her speedy recovery and having her back on the court. But just please extend all of our prayers to her that we'll be doing. And so if you would, thank you folks for being here. And if I would ask Mr. Bohannon, Ms. Block, and Mr. Benfield could come on up. I think we can do this panel pretty quickly, and we'll take everything else up at our next meeting.
Is there a motion for that, Senator McKee? Is there a second by Senator Irvin?
The motion is that we'll change the agenda and finish this next month. Yes, ma'am. Thank you.
Senator Missy Irvin
Unverified
1:54:02
But I do think that we want to respect. Senator Hickey had a question for PSC, and I don't know if Senator Hickey wants to next month. Okay. I just wanted to make sure. Thank you,
Senator Irvin, and certainly we'll make sure.
All right, and then second. All in favor say aye. Aye. Opposed? Okay, thank you. And thank the three of you
all for waiting, and we probably should have moved you all up right after West Memphis, but that's okay. We got you in today. I don't want to make you come back. If you would each introduce yourselves for the record, I would appreciate it. Yes,
Jean Block
Unverified
1:54:40
sir. I'm Jean Block, CEO of Little Rock Water Reclamation Authority.
Speaker 306
1:54:44
Ryan Benefield, the Chief Operating Officer with Little Rock Water Reclamation Authority.
Arkansas Water. Okay, thank you and since you're first on the list, Mr. Bohannon, I'm
Speaker 310
1:55:09
going to let you go first. Well, thank you all. Thank you, Chair, Senator Johnson. Thank you all for the invitation to be here. We have had a long afternoon, so I'll try to keep this as short as possible. Central Arkansas Water is a potential provider of water to two data centers in Central Arkansas, One being the Aveo Center in Pulaski County, and the other being the Google Center at the Little Rock Port Authority.
Speaker 311
1:55:36
I say a potential water provider because as of this point, there has been no application filed to receive water from Central, to receive water from us at either data center, and no plans for the development have been filed. So it is a potential. Now, I'm not trying to dismiss that, but we also do not know the final details of what they are planning to do on those sites as far as water consumption.
So until that occurs, we can talk about the generalities that you have heard in the press and in other conversations and our approach to it. And I think the important thing to realize there is that Central Arkansas Water does not look at this economic development project any differently than it looks at any other economic development project. And we are agnostic as to what those projects are.
It is not our job as a water utility to say, yes, we like this project, and no, we don't like this project. If a community is going to have a project, then we have to look at it and say, can we provide water? And if we are going to provide water, what are the terms and conditions of providing that water? In this instance, and how we are with all economic development opportunities, if there are capital improvements that are required to be made to the system,
The developer of the project is required to make those capital improvements. It doesn't matter if it's a Walmart store going on to an area that has not had service, a data center, an Amazon warehouse, or a residential subdivision. A developer comes in with a subdivision and says, we want to build 200 homes, And we say, here is the water infrastructure that you must construct and pay for.
Amazon Warehouse came in and said, we want to build a warehouse. We said, here is the infrastructure you are required to pay for. And so it's the same analysis. The only analysis that may somewhat be different is the size of the numbers that people have talked about in potential water consumption. So let's look at that a little bit in that central Arkansas water yesterday delivered 101 million gallons of water to the half million consumers that we serve.
On a maximum day that we have heard any data center throw around, it's about 4 million gallons. So we're talking about a 4% shift when we have the ability to treat 157 million gallons of water, and we already have 73 million gallons of water sitting in tanks. So our total water available based on our tanks were filled up the night before,
and we have treatment capacity during the day of the 157 is 225 million gallons of water that could be delivered, and the data center may need four on a maximum day. That is not what they're going to need every day. It's what they would need on a maximum day, and then you even heard them talk today, it depends on what type of cooling system they use.
We don't know that yet. That hasn't been submitted to us to look at. Now, I do want to state, before I be quiet because I said it would be brief, is I've told you Central Arkansas water numbers. And I want to be candid in that I can't speak for every water utility in the state, and I know that Hope is looking at one, and Clarksville is looking at one, and they're already building one in West Memphis. And I gave you our numbers. HOPE's maximum water capacity is 9.6 million gallons a day.
If they're looking at a data center, I have no idea what that impact is on their ability to provide water. So when you get down to it and you're just talking about what can CAW deliver, it's a different conversation maybe than what could be occurring in other parts of the state. And you already heard West Memphis earlier say they shifted to air-cooled because of water demand, and now they're looking at, well, maybe in the future we'll have additional water supply.
So this very much becomes a community-by-community analysis of what resources are available and is there sufficient water available to serve the potential demand? And with that, I'll be quiet, and they can either answer me questions or we can go over here. Thank you,
Mr. Bohannon. And I have to say, one of my favorite answers that witnesses have is, well, it depends. And that's, in effect, what you said, and I appreciate the fact I do have one very brief question.
At this moment, you don't anticipate having to choose between a data center or any other economic development project and those consumers like me that just want our water to come on when I turn the faucet.
Speaker 315
2:01:33
Not only do we not anticipate having to make that choice on any given day as to who we're providing water with, but we continue to make the commitment. When the next project comes along, we'll figure out a way to make sure that we have the water to be able to deliver it.
Speaker 312
2:01:53
Arkansas is a water-rich state. Water should never be the reason we deny economic development opportunities in this state. Thank you, sir. And
Ms. Block and Mr. Benefield, I'll recognize you all together and let you divide up however you all want to present this. Thank you, and good
Speaker 319
2:02:11
afternoon, Chairman McNair. Hold on. If I could hold just
a moment. Representative Ladyman, was your question specifically for Mr. Bohannon? Okay, if you'll let me hold. Representative Ladyman does have a question for Mr. Bohannon.
Representative Jack Ladyman
Unverified
2:02:27
Thank you, Mr. Chairman, and I'll be brief. Mr. Bohannon, thanks for
your information you gave, the capacity you got, and percentage and so forth. But what I think I heard you say is that we should treat data centers just like any other project, look at what the parameters are, look at what we have. So it should be just another business or commercial or whatever that it just produces data instead of widgets. Is that true?
Speaker 312
2:02:58
As a water utility, I believe that is how we should treat them. We are not in the business as a water utility of picking winners and losers as who gets to come to a community and operate. Thank you. Thank you. Thank you.
I'm sorry that we jumped around like
Jean Block
Unverified
2:03:24
that, Ms. Block, but you go right ahead. Okay, thank you. So good afternoon, Chairman McNair, Johnson, and committee members.
Thank you for the opportunity to participate in today's discussion. My name is Jean Block, and I am the CEO of Little Rock Water Reclamation Authority. Our utility is the largest sewer utility in the state of Arkansas. We collect and treat used water from Little Rock and the nearby municipalities of Kamek Village, Alexandria, and College Station, serving a population of over 200,000 people. We have three water reclamation facilities, and we return 36 million gallons of treated wastewater to the Arkansas River every day.
Joining me is our COO, Ryan Benefield. Ryan has played a key role in evaluating the technical impacts of the proposed Google Data Center project in the port of Little Rock to our sewer system. As conversations about data centers continue in Arkansas, we welcome the chance to explain our utility's role and share what we know as a wastewater utility. It's important to note that every sewer utility is unique. Each system differs in its treatment processes and infrastructure capabilities.
And today, my remarks will focus on Google's proposed data center in the port of Little Rock, and how it impacts our utility, our customers, and the infrastructure we manage. We have not been involved with any other data center projects outside our service area, including the proposed Aveo facility in Wrightsville. Our customer base includes residential neighborhoods, hospitals, small businesses, and industries of varying sizes. For decades, we have communicated early and often
with industries who are considering operations in Little Rock to ensure that they understand our requirements and capabilities. When an industry approaches us about serving them, we must first answer some key questions. Can we safely treat their wastewater while preserving our biological treatment process? Do we have enough capacity at our treatment plant? Will it impact our current customers? And can we support future growth? The answers to these questions and others inform whether we can
serve the industry and continue to maintain our mission of protecting public health and the environment. Before making any decisions about the Google Data Center, We considered these questions and to answer them, we commissioned an independent third party study in 2024, which evaluated the wastewater the data center would generate. I will note that Google covered all the costs of the study while LRWRA retained independent control of every aspect of it.
In 2025, we received the results of the study, which showed that our Fush Creek treatment plant can handle the data center wastewater without impacting our biological treatment process, our plant operations, existing customers, or our environmental compliance. Regarding available treatment capacity, our Fush Creek facility currently has about 8 million gallons per day of available capacity. Our analysis shows that we can handle the wastewater from the proposed data center,
continue to serve our current customers, and still have plenty of room for future growth in the port. Cost is another important issue. We understand that people worry that a project like this might impact utility rates. For LRWRA, the answer is no. In the same way we required Google to pay for the initial study, we would require them or any industry to pay all costs associated with transporting and treating their wastewater, including any special infrastructure needed for their project.
LRWRA customers will not pay these costs, and the project will not increase sewer rates for residents or businesses. We know data centers have sparked a significant amount of public interest, and there are still questions about infrastructure, environmental impacts, and long-term growth. These are important topics, and people deserve clear and honest answers. We are committed to sharing accurate information about the parts of the project that fall within our responsibility and expertise.
At our utility, our mission does not change from project to project. We work to protect public health, protect the environment, provide safe, reliable wastewater service, maintain reasonable rates, and responsibly manage the public resources entrusted to us. Thank you for letting us share our perspective today. I am pleased to be part of the discussion, and Ryan and I are happy to answer any questions you have. -
Thank you, Ms. Block. I do not have any questions in the queue, but if anybody, oh, I'm sorry, y'all jumped in fast.
Senator Matt McKee
Unverified
2:08:20
Senator McKee, you're recognized. Thank you, Mr. Chairman, and thank you all for being here today. I appreciate your patience in letting us get around to you and coming to talk to us about the experiences that you've had. So what I hear you saying is that when a developer comes to you, the details of their operation are extremely important. That's correct. If they're not forthcoming with those details, you probably aren't going to do business. And if you don't have the resources to support that industry, they're probably going to need to find another location.
Speaker 90
2:08:56
relates to Little Rock Water Reclamation Authority. Very good. Totally agree. Very
good. Thank you for coming today. Okay. Thank you, Senator. Representative Lightingman, I think
Representative Jack Ladyman
Unverified
2:09:05
you're going to have the last word. Thank you, Mr. Chairman, and thank you all for being here. And I liked your presentation very much. So what you said was you look at what you're concerned about is the biological or chemical load that is in that water that you're going to have to provide, you're going to have to treat.
And the process, I suppose, would be what's a data center, whatever it is, this customer would have to come to you and ask for a permit. And you would ask them questions about what is your pH load, what is your biological load, what's your metal load. It doesn't matter who that customer is. Everybody follows the same process, and you know what your capacity is, what you're capable, how much volume you can change pH. You know how much that is, and you look at that just as Mr. Bohannon talked about. That's correct. You know what your capacity is, and if you can serve that customer,
then it benefits the community. You're all in. If you can't, you tell them
you can't. Yes, sir. That's correct. All right. Thank you very
much. Thank you, Representative Leidyman and Senator Penzo. It did slip in there at the end, so you don't get the last word.
Senator Clint Penzo
Unverified
2:10:15
He does, Senator Penzo. And I'll come back to you, Senator Hickey. Thank you, Mr. Chair. And I actually have a question for Mr. Bohannon. And I'm sorry, it doesn't really pertain to data centers, but was it your water district that was running out of fluoride?
Did I see an article? Yes, sir,
Senator Clint Penzo
Unverified
2:10:33
in the water again. Oh, so you have replaced the – where
Speaker 332
2:10:37
did you source that from? Our regular supplier got a shipment to us, and they unloaded half
Senator Clint Penzo
Unverified
2:10:43
a trailer yesterday. Okay. Everybody was sending me that article over the last, yeah, here recently, so I just want to check. Thank you. No problem. Thank you. One more question, if you don't mind. Do it quickly. How much a year do you all spend in fluoride, on fluoride acquisitions?
Speaker 333
2:11:00
I should have been better prepared for that question, knowing how much it's been in
Speaker 312
2:11:05
the news. I will tell you this, that we're working on our budget, and they've told me it's a 300%
rate increase for 27. Mr. Prohannon, if you will provide me with that information, I will make sure that Senator Penzo gets it. Thank you, Mr. Chair. All right. Yes, sir. I want to thank everybody for coming. Senator Hickey, I'll come to you in a moment. Also, Dr. Lane, I didn't forget about you.
We're trying to shuffle. You will be invited to this October hearing, and we'll try to do that. I apologize. I thought I could slip
you in here, but if you'll bear with us, we'll take care of that. Senator Hickey,
Senator Jimmy Hickey, Jr
Unverified
2:11:50
you're recognized. Yes, I just, Mr. Chair, this is the thing. I've asked the question whenever we come back next month of the PSC that I would like them to do their own calculations of how it's more beneficial that that they that energy spread that out or if it would have been more beneficial that it was taken immediately you know so it wouldn't have went into
the rider so this is my thing I want to make 100% sure that somebody doesn't say well they cannot give this information out or you know we're bound by this or that and so i don't know if we need to get our attorneys involved and to try to work with intergy and also work with the psc and maybe the if intergy says well they're not supposed to do that but if they give their okay maybe maybe the psc can do it so the thing is is i just don't want to sit here for the
next month and then all of a sudden somebody says oh no that's confidential information there's proprietary information this and that i don't care if they redact some of that stuff out and we get the the cost although i prefer to have it all but i just want to kind of head that off at the past if we could mr chair and uh just go one step further
to make sure we get that information senator hickey it sounds
like you are trying to lay out some reasonable ground rules before we come back and look at this and i certainly concur with everything you just said uh because so much
of this information that we've seen in the newspaper is literally part of it even today. I think this will give us a little time to digest this, ask them those questions. We might not like the format that they want to do, but that we can at least get an agreement of how we're going to proceed because, again, the whole idea of splitting this up was not so we could come back next month. It's so we could get the real answers that we need. So I appreciate that, and certainly if we see things that their interpretation is not what we thought it was last year,
then we can look in January about maybe changing the law on that.
Senator Jimmy Hickey, Jr
Unverified
2:13:57
But may I, Mr. Chair, so let me ask you this. Are, before the next meeting, through the chairs, are the chairs going to attempt to work that out among both parties to make sure that the PSC can do that information? With your guidance, I will speak
to Co-Chair Shepard, and we will try to accomplish that. Thank you, sir. So we're all on the same page when we
show up in October. Right, and maybe they legally
Senator Jimmy Hickey, Jr
Unverified
2:14:21
can't do it, and if that's the way it is, that's the way it'll be.
If that's their position, we'll have to deal with
Senator Jimmy Hickey, Jr
Unverified
2:14:28
that. But if it's as simple as Intergy saying, no, it's okay to release it, then I'd want us to go
down that path also. Well, you're asking the right questions, and when we get those answers, we can decide the best way to proceed. Thank you,
sir. All right, thank you, Senator Hickey. I see no one else in the queue. Thank you all for coming, and if there's nothing else, we are adjourned.
Agenda
A. Call to Order
B. Consideration of a Motion to Approve the August 6, 2026, Meeting Minutes [Exhibit B]
C. Discussion of Data Center Development in Arkansas
D. Other Business
E. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — ENERGY - JOINT, Sep 15, 2026 | Agenda | 1 | Official source ↗ |
| EXHIBIT B - Meeting Minutes 08-06-2026 | Exhibit | 1 | Official source ↗ |
| EXHIBIT C2 - Joint Energy Comission Presentation Sept. 2026 | Exhibit | 4 | Official source ↗ |
| HANDOUT 1 - DC 101 Branded Leave Behind | Exhibit | 2 | Official source ↗ |
| HANDOUT 2 - Arkansas Economy | Exhibit | 2 | Official source ↗ |
Speakers
Senator Mark Johnson Chair
Unverified
Representative Rick Beck
Unverified
Speaker 7
Representative Denise Jones Ennett
Unverified
Representative Jack Ladyman
Unverified
Speaker 46
Speaker 32
Chair
Unverified
Speaker 67
Senator Matt McKee
Unverified
Speaker 52
Speaker 116
Representative Jessie McGruder
Unverified
Representative Lincoln Barnett
Unverified
Speaker 137
Speaker 140
Representative John P. Carr
Unverified
Representative Richard McGrew
Unverified
Speaker 169
Bob Atkins
Unverified
Eric Foister
Unverified
Speaker 177
Speaker 178
Speaker 180
Speaker 181
Speaker 184
Speaker 187
Speaker 189
Speaker 190
Speaker 185
Speaker 211
Representative Keith Brooks
Unverified
Speaker 218
Speaker 223
Representative Ashley Hudson
Unverified
Speaker 226
Speaker 228
Representative Stephen Meeks
Unverified
Speaker 247
Speaker 220
Senator Jimmy Hickey, Jr
Unverified
Speaker 170
Senator Clint Penzo
Unverified
Speaker 279
Speaker 235
Speaker 286
Senator Missy Irvin
Unverified
Jean Block
Unverified
Speaker 306
Speaker 310
Speaker 311
Speaker 315
Speaker 312
Speaker 319
Speaker 325
Speaker 90
Speaker 332
Speaker 333