Energy - Joint
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Bills discussed (1)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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HCR1009
· 2 mentions in chapter, agenda
Matched: “F. Discussion of House Concurrent Resolution HCR1009 – To Advance the Study of Nuclear Fuel Recycling”
|
TO COMPLY WITH ARKANSAS ACTS 2023, NO. 259; TO REQUEST FEDERAL FUNDING FOR THE NEXT … | Ladyman | Approved by the Governor |
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Unknown speaker
0:00
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
committee come to order chair sees a quorum thank you all for coming today looks like
we're a little light on the senate side although I think I saw a couple of our members back in the hallway maybe they'll slip in in just a moment since representative shepherd had a trial today in El Dorado and he asked us to go ahead and under the rule the next senior house member of the majority party can be up here as co-chair and so i ask
that's representative ladyman who will participate quite a bit in this agenda today so i asked him if he would join me but first let's get through our housekeeping measures yeah whatever you want to say thank you mr chairman uh i just wanted
Representative Jack Ladyman
Unverified
4:21
to thank the utility companies that are here today i think you're here for item f i know you got short notice but i
appreciate y'all being here and i'm sure you've got good information and and i might add and this
is just for everyone's benefit if it helps you uh we're going to go a b c d but we're going to skip e and go to f which is kind of also a housekeeping item i hope and we'll come back and wrap up with the item E. So under the ALC rule, all committee expenses other than per diem and mileage must be approved by the committee and reported to the ALC executive committee. So I would ask if the committee would, would the chair would request a motion to consider adoption of authorizing the co-chairs to approve the expenditure of committee funds for special
expenses. I have a motion by Senator McKee. Is there a second? Second by Representative Beck any discussion all in favor say aye opposed thank you for approving that and also need a motion to approve
the minutes of the October 22nd 2024 meeting I didn't catch who it was that's Senator McKee again and is there
a second Representative Beck again any discussion all in favor say aye opposed thank you for that okay we will move on now to item D and this is related
to Act 707 of 2025 to create the technical feasibility study on new nuclear energy generation. And I'm going to ask if Representative Ladyman will go to the table to present, and also I would ask if Jill Thayer would join him because we have some technical assistance we need from her to help us get through this. And whenever you're ready, identify yourself for the record.
both of you, and then we will proceed. Jack, you get to go first, since you're
Representative Jack Ladyman
Unverified
6:33
already sitting down. Turn your mic on. State Representative, I'm on? You're on, yes, sir. State
Representative Jack Ladyman, District 32. Okay. Jill Thayer, Bureau of Legislative Research. Okay,
Representative Jack Ladyman
Unverified
6:46
thank you both. Representative Ladyman, you're recognized. Okay. Okay. Well, committee, I want to talk about a
little bit of history on Act 707.
You know, we passed this during the last session, and the title was to create a technical feasibility study on new nuclear energy. And, of course, what we want to do is be up with other states. There are a lot of other states that are doing a lot in the new nuclear field. The state of Texas, they just created a nuclear energy department within the governor's office of the state of Texas. That's just one example. So we want to stay up on this. That's why we proposed this study and why you all approved it.
But I'm going to read a little bit about the act and what we're here to do. So Act 707 of 2025 requires a technical feasibility study on implementing nuclear energy generation in Arkansas. The act states that the Department of Energy and Environment shall hire the consultant to conduct the study. However, the department was not given the funding to hire this consultant in the bill.
I am requesting this committee to hire and supervise the consultant to conduct the study set out in Act 707, which you all have a copy of in your packets. The consultant will then report to this committee rather than to the Department of Energy. So as I said in that statement, the committee would hire and supervise this consultant. Act 707 sets out the following criteria for the consulting firm to conduct the study.
So these are the requirements that this consultant would have to have. Be well-established in the nuclear industry. Have a large majority of United States nuclear operators as its customers. Have had nuclear licensing as its primary business for a substantial length of time. Be staffed with individuals who have knowledge and expertise. in nuclear reactor design and operation, studies of and expertise in the feasibilities
of various nuclear reactor technologies and designs, have nuclear reactor licensing regulation and law, and nuclear reactor siting. And they must be neutral with regard to reactor technology and designs. The reason that's in there, There's multiple types of these new small generators, so we want an unbiased opinion here. In addition, the Act requires that preference be given to a company that is managed and owned substantially by military veterans
with nuclear operating experience from their time in the military service. As you all know, in the Navy, there are a lot of people that are exposed to operating nuclear plants on nuclear submarines, so we're looking for that expertise. Because this is such a specific field of study, there are limited consultants that meet all of these qualifications. You all have in your folders materials provided by Excel Services Corporation,
a consulting firm that meets the requirements set out in Act 707. I am requesting that the committee authorize BLR to move forward with negotiating a contract with Excel Jill Thayer with BLR is here to answer any questions about the contracting process Mr. Chair, I'm happy to answer any questions and
I have a motion at the proper time Thank you I was going
to ask if perhaps, and first I'll get Ms. Thayer to answer it instead,
is would it be appropriate for Representative Ladyman to make his request now in the form of a motion and then we would be in a discussion phase for that? Or would it matter
Speaker 33
11:00
either direction? I think once you had a motion on the floor, I wouldn't be able to necessarily answer questions. It would just be debate among the committee members.
So we should leave it as it is for the
Representative Jack Ladyman
Unverified
11:11
moment? Yes, sir. Okay. Mr. Chairman, I don't believe Ms. Thayer or anyone from the audience could speak if we made the motion.
I understand, and we'll be asking for that comment. So
then I guess at this point, Jill, I ask you to proceed with describing the procurement process
Speaker 34
11:30
Mr. Chair. So if you all accept Representative Ladyman's request, then I would reach out to the company to begin the process of getting a draft contract with the terms. It would have the scope of work in accordance with Act 707, the maximum contract amount, and the term of the contract.
And then I would bring that back to this committee for you all to review the draft and approve whether or not to move forward. because it would be a contract with the Bureau of Legislative Research. Legislative Council has to have final approval before Director Garrity can sign. So once we got your approval, then that would go through the Executive Subcommittee and then to Legislative Council. So that would be at Council's August meeting at the
earliest. All right. Are there any questions by the committee members of what Ms. Thayer said?
Senator Matt McKee
Unverified
12:24
Everyone clear on that? Senator McKee. Thank you, Mr. Chairman. I think you all know how important I think that this is, and if you were in here when we passed 1572. So originally this was going to be funded by the Department of E&E. So would it still be funded through that office, or what would the funding look
Representative Jack Ladyman
Unverified
12:51
like? It would be funded through legislative council.
Legislative council. Discretionary funds. any other questions by committee members is there anyone in the
audience would like to speak or has anyone signed up michelle okay okay well i guess at this point we need to we would consider your motion then if
Representative Jack Ladyman
Unverified
13:20
you want to make that in the form of a motion representative ladyman
okay mr chairman I move that we authorize BLR to move forward with negotiating a contract with Excel Services Corporation
for purposes of conducting a technical feasibility study that meets the requirements of Act 707 of 2025 for the use and study of the Joint Energy Committee and that the draft contract be brought back to this committee
for review. okay any questions of first is there a second for the
motion second by representative McGrew any discussion or questions for representative lady man
about the motion sir McKee again are you you
Senator Matt McKee
Unverified
14:16
didn't I don't know if you punched Yeah, there we go. Thank you. There you go. Go ahead Mr. Representative Laban I would I guess since the funding source has changed respectfully ask that you would amend your motion Instead of that BL that we would be authorizing BLR to negotiate the contract I would request that that we authorize them to begin conversations about
contractual agreements so that we could get a better understanding of of what the scope of the work would be and what the cost of that work would be since the source
Representative Jack Ladyman
Unverified
14:47
of funding has changed. Would you ask me your question
Senator Matt McKee
Unverified
14:50
again, because it's more specific? Would you be willing to amend your motion to begin discussions about contractual agreements with Excel instead of negotiating that contract until this committee has a better idea of what those costs might be since the source of funding has changed?
Representative Jack Ladyman
Unverified
15:06
Well, Senator, no, I would not. I don't believe that there's unanswered questions. We would still have to approve the contract, which would include the cost. There's an estimated cost. Many members of council have had meetings on this, talked about the funding of it. There's agreement on funding it. The estimate is, I think, $380,000. The consultant has confirmed that that's basically in the ballpark of what the cost would be. So we know that. I see no reason for delaying this.
Nuclear energy is a hot item, and we are losing ground. We do not
need to delay. We need to move forward. So I would stand with my motion.
And I want to add, Senator, that we've got the safeguards that are not only our policy but built into the rules where the ALC executive committee would be looking at it. So we're not proceeding without the proper review, and I think by adding that one more step, it would just potentially delay us.
So we'll go on with it. Mr. Chairman,
Representative Jack Ladyman
Unverified
16:12
if I might add one thing. Yes, sir. The contract would have to come back to this committee, then it would have to go to a subcommittee of council, and then it would have to go to council. So it's going to have three reviews, so
changes could be made at any point along the line. Right, and if anything Unexpected should pop up then then this committee
could come back and and revisit the issue But at least at this point where I think everybody knows the direction we're headed
and I think that the ALC rules will are applicable here and will protect us from any
Unforeseen problems. So any other questions or discussions about the motion? Oh
Okay, hold on Representative Beck Thank you, mr. Chair, and I certainly appreciate
Representative Rick Beck
Unverified
16:57
and I do understand We need to be moving on this Arkansas is Certainly behind the eight ball on this at this particular point and this will help them move forward the concern that I have or the question that I have
The firm looks like they're very well capable of doing this But were there other firms that submitted possibilities you mentioned that there was ALC that members of ALC had and our members of council had reviewed it and it was kind of their recommendation to proceed with this. So were there other companies reviewed? What was that process like that got us to this particular company?
Representative Jack Ladyman
Unverified
17:42
There were other companies looked at along this whole process,
but this company and a representative of the company is here if y'all want to ask questions I would call him up and you can feel free to ask him questions but this bill also has a very short timeline to implement I think it says 60 days after funding so if we went out for proposal the technical way it would take three months that's what I've been told so we need to move faster on that
this company is totally qualified other companies have been looked at the cost is not exaggerated so we felt
like with the timeline this is the best way to go I agree the proposal looks good
Representative Rick Beck
Unverified
18:34
I don't doubt the credentials of the company i was just concerned about the lack of other companies well i can't call
Representative Jack Ladyman
Unverified
18:47
miss thayer back up here because we're in the discussion phase but
there's a process that we have to we would have to go through and counsel for sole source uh choice and if y'all were in the meeting yesterday there were i think four of those sole source documents I don't know whether y'all were in that meeting but there's
a procedure to go through to answer those questions about why are we picking the sole source it's a very detailed process I wish I could ask Ms. Thayer to do that but she can't speak at this time
I think it's safe to say that Representative Beck, excuse me
that we're looking at a very limited number of potential consultants on this it's not like everybody can do this and the criteria that's in Act 707 includes that they both will be Navy nuclear, that they all be Navy nuclear veterans and with staff with an Arkansas licensed attorney which kind of brings that universe down even smaller. Anything else, Representative Beck? No, as
Representative Rick Beck
Unverified
19:49
long as we're making, if we're going to sole search sole, this is
the sole only contract that we're going to be looking at, at that point just as long as we're meeting all the requirements as far as the council has to to do that I'm okay with it okay thank
Speaker 86
20:05
you and representative Whitaker thank you sorry I pushed it thank you mr. chair okay thank you following
Speaker 89
20:17
up on representative Beck I was wondering do we
Representative David Whitaker
Unverified
20:20
have documentation of the sole source do we have sole source documentation for this project no but that would have to
Representative Jack Ladyman
Unverified
20:30
be gone through in the council process all right so there's the salmon you know the salmon sheets that we get yeah those we see that yes that would have to be it during the council
Representative David Whitaker
Unverified
20:41
approval process thank you because it's a really important part of this process yes thank
Representative Denise Garner
Unverified
20:49
you okay representative garner thank you mr. chair and on that same note and i apologize i'm new to the committee but
um what are the qualifications of this particular company that make it uh make us ready to to decide on sole source?
May I jump in? Yeah, sure. Representative Garner, the act itself is fairly
clear about certain technical criteria and two of the things I mention, one is that it be owned and managed by U.S. Navy nuclear veterans And the second part is that they must have on staff an Arkansas licensed attorney with knowledge of both the nuclear regulatory process and Arkansas law.
So, again, that narrows it down to some very, very few even possibilities. And so Excel, I think we have pretty strong justification
Speaker 99
21:47
under the statute to sole source this. Great. Thank you. Yeah, and I would add
Representative Jack Ladyman
Unverified
21:53
one thing to that. Excel is a well-established energy company, been around for
a long time, and very established and has a good record. So you've got the information there on their company, and you've got bios of their leaders.
Representative Denise Garner
Unverified
22:12
And I was just wondering if there was something specifically that they did that some of the others don't do.
Representative Jack Ladyman
Unverified
22:20
Well, I think it's their depth in the nuclear arena. that gets them approved because they're involved in many segments
of that industry sounds good thank you if
any any members want to take a look at handout number two which is from mr. metters with
with excel is i think kind of answers a lot of the questions that some of
you may have so i call that to your attention uh any other questions or discussion
if not then we have a motion and a second uh uh all in favor say aye aye opposed all right thank you uh mr meters would would you like to to say anything since we we asked to move forward or are you okay at this moment all right thank you this is mr meters with uh excel okay thank you okay we have done that sit we've set that wheel in motion and we'll work
there to save us all a lot of our guests time we're going to also go on to item F and we
already have representative lady at the table so Senator Penzo do you want to join him your co-sponsor that you want to join him at the table And if anyone on the committee is unclear, handout 6 describes what they're going to talk about.
You've already been recognized, but Senator Penzo, would you identify
Representative Jack Ladyman
Unverified
24:16
yourself for the record? Clint Penzo, Senate District 31. Okay. Gentlemen, proceed. Okay. Thank you, Mr. Chairman. committee we're talking about hcr 1009 you have a copy of that and what we wanted to do here was move the recycling discussion forward and that resolution required i think blr to send a letter
with this resolution to our congressional delegation which that was done there's been a lot of discussion back and forth about that but we haven't really moved the ball down the court many of you are aware that we had a trip to Argonne National Labs on Friday we had 10 legislators and 10 non-legislators who were involved in nuclear at that meeting it was a really good educational meeting. So what we want to do is go the next step. And we feel like the next step is that we
have to talk to the executive branch at the federal level. And before I, I'll let Senator Penzo talk before I've got a motion to make at the proper time. But if y'all are aware, back on May the 23rd of 2025, President Trump issued many executive orders pertaining to energy. One of those was the revigorating the nuclear industrial base. And within that
executive order, it set 240 days for the Secretary of the Department of Energy to come up with a report to present to the President to close the nuclear loop, which means the waste, to come up with a report on how to address nuclear waste and close the nuclear power cycle.
So we feel like it's time that we really start to do more things to implement HCR 1009. So I have a motion at the proper time after questions. Senator Penzo, did you
Senator Clint Penzo
Unverified
26:46
Yeah, thanks, Representative Ladyman. For those that weren't able to make the trip, haven't been to Argonne before, there's some things y'all probably need to understand about you know representative
ladyman just mentioned nuclear waste we think of what's comes out of the reactor the spent fuel rods is nuclear waste it's nuclear material but it's i don't consider it waste that material still has 95 percent roughly of the potential energy still in it at argon labs they've had a process that was developed years ago. Pretty much they are the base of every nuclear program
in the world, whether it's American, Russian, Chinese. A lot of the technology was developed at Argonne Labs. So this spent fuel, every fuel rod that has been through Nuclear One is currently sitting in the parking lot there is no disposal for that spent fuel right now the technology is there to extract their uranium out of it and what's left over are rare earth
elements that can be used when medical um electronics so we've we've got hundreds if not thousands of years of uranium sitting in the parking lot there's a process that's there to pull that uranium out and reuse it so if there's five percent waste there the the waste the waste that is in that parking lot has a half-life of hundreds of thousands if not millions
of years so we have to worry about storage for the long term if it's recycled the waste product has a half-life or a life of that we have to management of 300 years that's
a feasible full future. We can't plan for hundreds of thousands of years of storage. We can plan for hundreds of years. So those
that were able to attend kind of understand, got to see the process
of how the recycling works. Of course, we were around a different isotope uranium that wasn't as reactive um but it can be done with the more reactive uh isotopes that spent fuel can be reused and reused and reused over and over and over again until there is almost no waste left i think the
term you're using senator now is reprocessing not recycling uh
Senator Clint Penzo
Unverified
29:38
no reprocessing and recycling is different than what you're
talking about reprocessing i won't put words
Okay, yeah, so this uses molten salt, sodium. So it's dipped into a bath of liquid sodium at 600 degrees, and then the uranium
migrates out to these cathodes, and then it can be pulled off the cathodes and reused. It's a different process than the reprocessing that they do in France right now.
You know, there's always the fear of nuclear proliferation with reprocessing, but with recycling, that's not a possibility because they're not pulling out just plutonium. It's mixed, all the uranium, plutonium is all mixed together, so therefore you don't have the fear of it being used to make nuclear weapons. So it's a significantly different process than what they're using. I stand corrected.
You're obviously a few chapters ahead
Senator Clint Penzo
Unverified
30:41
of me in the book. Well, it is a little bit different. So that's just a little taste of what it is.
So I just want everybody to understand that this can't be used to make nuclear weapons. We don't currently have a disposal process for our current spent fuel rods. So everybody that's worried about nuclear waste dumps, I mean, we don't have any of them in the country. They're sitting in a parking lot. They're secure. They're in concrete casks. they're safe for maybe 70 years i think is the lifespan on the casks i could be off a little bit but we have to deal with this every 70 to 100 years for 100 000 years or we can just recycle it
the waste products are reduced to a very minimal amount and they have to be dealt with for 300 years they're not nearly as reactive as what's in the parking lot and like i said this is this is the greenest form of energy out there um we've already got the uranium we don't have to mine anymore we don't have to because all of our uranium comes from you know a place where they go in and deforest mine strip mine it and then you know we were exporting a footprint uh like we do with
all green energy the the the footprints exported the the rare earths have to come from somewhere to make batteries to make solar panels to make you know in the windmill production all these things and we're sitting with them in the parking lot that can be recaptured and utilized in industry in arkansas this could bring in a tremendous amount of money for arkansas if if we were to put a foot forward and and you know try to get recycling programs set up in arkansas
So I'd be happy to answer any questions. I won't
take up any more time. Any questions for Senator Penzo, Representative Beck? So this is going to
Representative Rick Beck
Unverified
32:47
be like maybe wouldn't you agree type of deal. Or maybe you won't agree. But is it not true that the reprocessing or recycling process that this would go through also allows us to produce some of the fuel that some of these new reactors would actually need which is right now uh we are very short of people that can make the halo fuel for the new processors
Senator Clint Penzo
Unverified
33:13
wouldn't you agree i i would agree uh you know the the federal government is trying to set up new new plants and stuff to manufacture and process the fuel for like uh uh some of the new uh smrs that are coming online and and this recycled product is a drop-in replacement so So we don't, like I said, we wouldn't have to mine uranium, rely on Russia for our nuclear fuel. We've got it sitting in the parking lot in Russellville just waiting to be used.
So we can take a product that is currently considered waste, recycle it. It seems too good to be true, but, I mean, the technology has been there for years. And they're actually, the U.S. government is actually teaching other countries how to do this right now, and we're not utilizing it in our own country. So we need to be at the forefront in Arkansas instead of waiting for other states to jump on board because, like I said, this could generate a tremendous amount of revenue for the state of Arkansas
and eliminate our nuclear waste problem. so any other questions representative Nazarenko
thank you Mr. Chairman and I was on that trip
Representative Jason Nazarenko
Unverified
34:36
with you and it was a great experience a lot of really good information that came out of that one of the things that you mentioned Senator Penzo and thank you for the information you were talking about like the spent fuel and just kind of
how much was left over I remember they were talking about If I remember right, it might have been 96% was left even after it was processed at site one. So that's why we've got tons of usable fuel right there that we can grab. And you mentioned the value in tax dollars or dollars that could actually come into the state of Arkansas, recapturing this, you know, very usable fuel that we're not using now. And the other thing that was really great that I saw was the number of jobs that this could also create, that job creation dynamic.
I don't know the number that was thrown out there. It was over 1,000 jobs, so it was quite a few. So for me, would you agree that this is all safety concerns in there? like when we were we were there listening this process is not like other process that's happened in other places where they've had issues and they've got no history of any kind of any kind of incidents accidents or anything with this process is that what you captured when you were
Senator Clint Penzo
Unverified
35:58
there as well yes this this process is different they use an aqueous process and when we're talking about reprocessing this is this is molten salt sodium liquid you know it's a it's a totally different and then the the reactors the the small modular reactors that are are sodium reactors they they don't melt down they're already melted yeah i mean well yeah the the the way the way it works within them um as it gets as it gets close to critical the it expands and just by the nature
of being in sodium instead of liquid you know light water it's it's a different dynamic so it they there is no risk of like a sodium reactor melting down right um so yeah they're they're much safer and and jack can probably speak better to the uh uh he's got experience with the uh or more knowledge of what they do in france and how many jobs have been created over there and maybe Maybe he can elaborate on job creation.
But, yeah, I mean, it's going to stimulate the economy in many different ways.
Representative Jack Ladyman
Unverified
37:08
So do you want to elaborate? Well, I think Senator Penzo did a good job of covering that.
Of course, I could talk for a couple hours, too, but just a couple of things. You know, the waste that we have, if it was reprocessed, the amount of energy that we could draw from that, there are estimates that it would run the country for hundreds of years. with no other source that's how much energy we're talking about and the rare earth metals you know the president has talked about buying a country or making a deal with a country that's in war
to get rare earth metals we've got thousands probably of pounds sitting around so those two things and uh clint mentioned the uh the france the plant in france which i visited last year and they do reprocessing now let me just tell you the difference in the primary difference in reprocessing and recycling is in reprocessing you get plutonium in in recycling you do not you don't get pure plutonium if you get pure plutonium you have to have an army there to guard
that the nuclear fuels plant in welmington north carolina ge where i worked uh we had an army there that had to guard that enriched. Because it's weapons-grade material. Because it's weapons-grade, and, you know, you would have to have that. What does that do? That increases the cost, right? So if you're recycling, you don't have that additional security cost that you would have with new fuel. So we could talk more about that, but, you know, the reason for this, what we're presenting here is the president has set up
A Nuclear Energy Dominance Council, which is chaired by the Secretary of the Department of Energy and co-chaired by the Department, or Vice Chair, Department of Energy. So what we want to do, and my motion will say this, is we want those people that are on that commission to know where Arkansas is positioned and the amount of work that this body, some have already gone that worked on this, for 10 years. You look back 10 years in our history, we've started running nuclear bills back 10 years ago.
So our legislature and actually the people of Arkansas support this, and we've done a lot of work. So we want to put in front of those people making a decision the work that we have done here in Arkansas and to tell them that we're ready to work with them to close this
cycle. So, Mr. Chairman, if I may, I'll make
my motion at this time. We have some more discussion. Representative Torres, you're recognized. thank
Representative Randy Torres
Unverified
39:53
you mr. chair just a quick question i was on the tour and really
this very valuable experience would this position our state for federal department of energy funding potentially uh yes that's that's what we're
really working for because the spent nuclear fuel fund uh well we don't know exactly where the
Representative Jack Ladyman
Unverified
40:14
money is it is a trust fund it
Speaker 137
40:17
is a trust fund and some people say there's
Representative Jack Ladyman
Unverified
40:21
51 billion dollars in there and it's in there for this purpose so we would need to access those funds uh to move forward in arkansas with what we're trying to do
but one thing i forgot to say that senator penzo mentioned this plant in france that does reprocessing employs 6,500 people there's a whole city built around this plant so that's the jobs and if you look at the size of france and the size of the u.s the number of plants that we have versus how many they have you're talking huge numbers of jobs so did i answer your
Representative Randy Torres
Unverified
40:58
question you did and then as just to confirm is this process called pyro processing is that the
Speaker 142
41:05
no that's purex well no this is pyro this is pyro right you're right yeah purex is what they do in in france in
Chair
Unverified
41:16
france yeah this is pyro processing okay thank you representative uh representative mcgrew
Representative Richard McGrew
Unverified
41:24
you're recognized thank you mr chairman and i think y'all probably already we hit on this but i also was on that trip it was it was an amazing trip very interesting educating also the statement you made about the state doing this now I think it was a statement
was made up there that one of the states is going to have to do this the federal government's not going to jump in and do it and the state that does it will be first and there was also talk about some executive orders so that seems like the timing is that we're you know in doing things timing is real important it seems like the timing is right I was also in a meeting with congressman Westerman this this week he was talking about how high energy was on the level of the federal government how important it was to a nice security and how how much interest they're putting in it
so wouldn't you say that timing we're hitting it right on
Representative Jack Ladyman
Unverified
42:19
the dot I agree uh representative McGrew that's a very good point I got an email this morning I get this weekly and it talks about what the states are doing and and you're absolutely right the federal government will not do this A state needs to do it with funding from federal government. That's what has to happen. But I got one just this morning. It had nine states on there that were doing things in the nuclear arena. And when we started this 10 years ago, we were out in front, but we're losing ground.
So timing is very critical right now. So
Senator Clint Penzo
Unverified
42:51
you're absolutely right. Yeah. And moving forward now is important. I mean, Trump's executive order, he's, I mean, this is kind of a new thing that lines up perfectly what we're trying to do
here in Arkansas. Like Representative Ledeman said, he started working on this a while back, 10 years ago. So this is something that, you know, finally everything's kind of lining up.
the federal government's wanting to push forward with a recycling program, and that just happened very recently. So we're ahead of the game right now as far as, you know, getting things lined up for the recycling. It's just are we going to let other states pass this by, and are we going to lose out, or are we going to push forward? Well, as you said,
Senator Penzo, Representative Layton, we've got this stuff sitting in the yard up at Russellville. Yeah. It's not like we've got to go find it.
We know where it is. It's still there, isn't it, John? It's up there in the yard, I guess. So we know we have the material, and now there's both incentives and a friendly administration
Senator Clint Penzo
Unverified
44:04
for us moving forward on that. And we've worked out most of the details of implementing this.
This probably isn't the time to go through all those details we can at a later time, but we have pretty much a solution to every step of the way
and could implement this very rapidly. Okay. My understanding
is that the concurrent resolution requires co-chair Shepard and I to sign
a letter to request this, and so your motion is to clarify what that is. That's what my motion will cover, yeah. Would you please, if there are no other questions, please proceed with your motion, Representative Layton.
Representative Jack Ladyman
Unverified
44:41
Okay. Well, just a couple more things before I do that. Senator Penzo mentioned that me and some others here have worked on this for 10 years. There's people in the audience that have worked with me, and they've worked on this more than 10 years.
There are a few of them here in the audience, and I appreciate their work on this. Also, the timing question, President Trump's executive order and the report that's due, that will be due on January the 18th of 2026. So it's important for us to get in the game and be part of the conversation starting today, really. So, Mr. Chairman, I move that the Joint Energy Committee chairs write a letter to the Secretary of the Department of Energy to request a meeting to discuss HCR 1009 and how it can be used to implement President Trump's executive order issues.
issued on May the 23rd, 2025, titled Reinvigorating the Nuclear Industrial Base. That's my motion. Okay. Any questions about the motion? Is there a second? Second. Second
by our representative Beck. Now,
any discussion on the motion? if not all in favor say aye
aye opposed thank you congratulations you passed the motion i hope this
is moving us forward on some important issues we we might remember this as a day that moves arkansas to be more and more energy independent thank you mr chairman thank you committee and And Representative Layman, if you'll resume back up here beside me, we're going to now move to item E. And this is discussion of the disposition of the White Bluff and Independence Generating Stations. And before I first I'll ask Mr. Bethel, if you must, and anybody else you have would like to come to the table,
I'm going to do this in that order, do energy first. if y'all on your way up i'll mention uh this and it is relatively short notice and i apologize to everybody on that but it was uh just uh late last week that mr bethel called me and gave me some information about uh where this issue was and i thought it's important that it be shared with the committee uh and and that has to do with uh and we're not going to go too far back and talk about the consent decree and all the things that got us to this point but uh at this moment where
there's scheduled uh decommissioning of the two entergy and possibly the swept co plan as well but uh and mr bethel recognize if you and mr castleberry introduce yourselves for the record yes sir mr chairman and committee members i'm
Speaker 157
47:41
john bethel director of public affairs for entergy arkansas and with me is kurt
Speaker 158
47:46
castleberry and he works with us in the area of resource planning has a lot of experience and he can and describe his experience and mr castleberry is prepared to
provide an overview of the the proposed transaction amongst the co-owners there are representatives of the other co-owners the electric cooperatives and the municipal utilities present and they will also be available to to address transaction from from their point of view as well and so we per your request we made sure that uh we
Speaker 159
48:16
were all here and available to provide that overview to the committee and i i'm grateful
to all of you for coming but we'll start if you're ready mr castleberry you
Chair
Unverified
48:27
go ahead and give us the general overview from energy's perspective certainly i will thank you mr chairman and uh committee members yeah we're happy to be here today and uh hopefully we can provide you an overview of uh what i think is a very positive transaction for certain in fact i I think it's a very good transaction. And specifically, I'm talking about the agreements that all of the co-owners of the White Bluff and Independence plants have signed very recently.
And I think, again, I'll get into the details, but I think it's a fantastic transaction for all of our customers in Arkansas. And the utilities that are parties to that transaction represent a lot of those. In fact, I don't know the exact numbers, but I would say probably the lion's share of all customers, electric customers in the state of Arkansas. But, again, it's a win-win transaction. It's a win for all the utilities involved. It's certainly a win for all the customers of those utilities involved.
It's a creative transaction that does a lot of good things in the area of just being simpler than our previous arrangement, which has been in place for almost 50 years. We've worked diligently
Speaker 163
49:42
together over literally two to three years, very closely together, all
Chair
Unverified
49:48
the utilities, and I think we're all happy. And that's a good thing. But it was, you know, there's a lot of moving parts, but I think we have honed it down to something that makes everyone happy.
uh and i could tell you that it from my personal perspective it's been a pleasure working with all the utilities representatives of acc of conway city of jonesboro west memphis i'm leaving somebody out acc conway jonesboro west memphis predominantly and uh i you know all the all of us were focused on figuring out what's the best thing for all of our customers and how we get there we were faced with a big challenge with those coal plants and
having to cease coal operations in 28 for white bluff and 2030 for isis we have to have to get replacement generation and we got to get it in a time period where all of us are trying to attract new customers to our state to bring new jobs to our state and you can't do that without sufficient economic generation and I think this transaction helps accommodate that now let me give you just a few of the features of
Speaker 163
51:06
the transaction it's important to know that it provides for the
continuation of coal operations as long as we can and as I said a minute ago for white bluff that's to the end of 2028 and that's the end of 2030 so basically
Speaker 163
51:28
is again a good thing for our customers. As I said before, it simplifies our co-ownership relationship in a dramatic way. And it does that by concentrating Energy Arkansas's interest in the White Bluff facility and then concentrating AECC's, Jonesboro, Conway, and West Memphis's interest in the ISIS
Chair
Unverified
51:49
facility with AECC being the operator of independence. And that's
Speaker 163
51:54
important because it allows each of other utilities to pursue the replacement generation of their choice. And they're able to look at the universe of options and figure out what is the best investment makes for our customers. We're all in different places. Some of us have portfolios heavily weighted to nuclear. Some of us have portfolios heavily weighted to other technologies, you know, gas and wind and solar but we're all at different
Chair
Unverified
52:21
places but this transaction allows us to more
pursue the the technologies we need to meet the needs
Speaker 163
52:27
of our customers and importantly and throughout this transaction I've always said that if there's one thing that really has a lot of value here it's that transmission interconnection at White
Chair
Unverified
52:40
Bluff independence and for you for those that don't know what that is that is the
Speaker 163
52:46
is that is the ability to build a generator and then interconnect it to the bulk power transmission system and if you started to do that today by building a generator you would have to ask my so who's the
transmission operator to do a study for you to see what kind of investment you would have to make to interconnect that generator to the transmission system. And it might be hundreds of millions of dollars for you to interconnect the generator that you would build there. These two plants, White Bluff and Independence, together have about 3,600 megawatts of generation capacity interconnection. If you were to go to MISO and ask to do that, it would be an unbelievably expensive proposition. But this transaction provides that we'll get to continue to use that
and use that for free so all of our customers can continue to enjoy the
Chair
Unverified
53:39
benefits of that transmission interconnection, which if we don't do anything the right way here, we will lose that and we will have to start over, and that's not where we wanted to be. So again,
Speaker 163
53:49
I've always said it's not gold, it's platinum, and so this transaction is importantly, it maintains that. And also, there's a saying called an economy of scale benefits. We recognize that we could put a transaction together that forecloses on that and we couldn't capture that but this one does not do
that it allows us the ability to capture the economies of scale specifically like using some of the existing infrastructure that share you know there's water wastewater treatment facilities there there's water intake facilities there there's other facilities that why can't we just reuse that we've got to decommission those coal plants at some point as well the the transaction provides for us working together to come up
Chair
Unverified
54:38
with a larger decommissioning plan for both sites instead of one decommissioning plan for white bluff and one decommissioning plan
for independence and certainly that will save customers money we're obligated by law to continue to maintain the environment, the environmental monitoring of the sites for 30 years after they stopped burning coal. It's what we call environmental maintenance. And we've got a plan as well that allows us to continue to do that on a bigger basis to keep those costs down as well. And then, of course, these are large sites. Like I said, 3,600 megawatts of roughly of capacity of both sites combined.
bigger is better when it comes down to cost and so when you're able to focus and in and build larger facilities whether that be a gas-fired facility or whether that be repowering the facility with burning natural gas or burning you know some other fuel or batteries or solar plants or whatever bigger is better this transaction allows that to happen so those are kind of some
Speaker 163
55:42
of the major tenants of it but you know I'm excited about it I say it's been a pleasure for
Chair
Unverified
55:52
me personally to work with all the all the utilities there I think we had a very nice relationship good collaboration a lot of creativity it's been going on a long time but I think we're a very good point for the customers that buy electricity from us and for putting in place an arrangement that will help us to attract new business and new jobs to the Arkansas because we'll have the right generation at those sites in order to do that. So unless there are questions or, John, you have anything to add, I would yield to the group.
Speaker 157
56:25
I just wanted to offer one clarification. I think Kurt mentioned that one of the parties being AECC, and that means Arkansas Electric Cooperative Corporation, and so that's the electric cooperatives. If that was confusing to anybody, just wanted to make sure you all had that information, if
that's helpful. Thank you, Mr. Bethel. This is a little more sophisticated committee on that, I hope, but everyone knows who AECC is, at least in this room. But I appreciate you clarifying that for us. I have a couple of questions, and then we'll turn it over to committee members.
First, Mr. Castleberry, I'm going to use layman's language and kind of come back and say, is this what you said? But the White Bluff plant and also the Newark plant have transmission capabilities up to 36 megawatts, at least at one. There is no technical difference. If I have a stove in my house that burns wood and then I come back and I hook it up with gas and it burns gas,
it's still going around through all my house through the vents it's heat is this analogous to that in that if the generation source at these plants has changed from coal to gas or
some other medium then that again and I understand that my so
and the the grid operators have to approve all this but it's probably a presumptive thing if it's the same amount of amperage than we're looking it that's correct a minimum amount of regulatory approval to switch over to a different power
source am i interpreting that correctly you
Chair
Unverified
58:10
are you're right on point uh we have to go through the miso process to get that new generation you know uh approved by them that won't be a problem they have a process that you do that but you're exactly right it's the same thing you know we've got megawatts there now and we're going to
Speaker 163
58:28
have megawatts there of a new generation type but megawatts or megawatts so that's where we
are now uh is there a and you mentioned several
technologies but are has has a at least a tentative decision been made on energy's facility in jefferson county of what that replacement of generation fuel will be we are uh we are really close to working uh that
Chair
Unverified
58:51
and we will be filing that decision or those new resources with the Arkansas Commission right now where we are on that is we're looking at you know like I mentioned a minute ago how we use existing infrastructure to the highest and best use because we want to try
to keep rates low we don't want to have to you know throw the baby out with the bath water if we can use something that's already there we want to but I can't sit here today and tell you that we're going to do x or y but I I will say this just to get on the table we're going to make sure we have enough load following base load capacity to serve the needs of our customers and like we said in the previous hearings that's probably going to be uh the most economic choice these days is natural gas but we're also looking at you know other technologies as well you know
repowering is another one you know those facilities can be repowered uh you know when you do that they're not as efficient as a highly efficient uh natural gas fired facility and then you know battery storage is more economic and solar facilities are more economic some of our customers particularly the economic development customers you know are making that requirement as well so long answer I know but we're looking at all
Speaker 163
1:00:02
that but we will you know we're getting close to you know making our our choices. So I
hope I'm hearing you say maybe it's wishful
thinking on my part but that you were talking about this new
whatever the new generation is it will be base load and it will be dispatchable we have
Chair
Unverified
1:00:23
uh like i said it you know i may have said 3600 before it's probably closer to 3200 because each of those yeah yeah but i don't want to when you're talking i don't want to miss it that far right each unit today is
Speaker 163
1:00:37
a little over 800 so let's say there's 1600 in round numbers
Chair
Unverified
1:00:42
we have 1600 megawatts of interconnect capacity 24 7 right so you want to use all of it you don't want to use just when the sun shines right and so so we are planning on you know to make sure that happens that's the best way to use
Speaker 68
1:00:59
it okay john anything to add on that no
i think he he answered your question okay and i will now uh let's move to committee members representative
Representative Steve Unger
Unverified
1:01:10
of hunger you're recognized thank you mr. chair so decommissioning two coal
plants will they be disassembled yes okay I'm an old Navy guy who worked on old ships is there anything really mechanically wrong with these things or they are have they just simply been depreciated on a schedule they are
Speaker 176
1:01:32
I mean they're they're they're in good shape we've maintained them very well you know through our lifetime they're almost 50 years
Speaker 163
1:01:40
old but mechanically they're they're good but they're 50 year old technology and so you know
representative Unger we're trying to figure out what we can keep and that will you know mesh well with the
Speaker 176
1:01:53
new generation that we put there but they're they're they're in good shape we've maintained them well and and mr. Mr.
Speaker 173
1:02:01
Castleberry mentioned the prospect of potentially repowering the facility, and that would mean you would
Speaker 158
1:02:06
be able to use some of it with a different fuel source. You may want to talk about that a little bit as to if that was economic, how that would play
Speaker 164
1:02:17
out. Like I said, we're looking at a universe of generation technology options.
Chair
Unverified
1:02:21
Repowering, like John said, is definitely one of those. And, you know, we've got to look at the economics of all that, but you could start burning natural gas in those units now instead of burning coal. You could burn sawdust in those units now instead of burning natural gas or coal. You could burn a lot of things, and we're looking at all that. But the units are, like I said, they've been well-maintained. They're 50 years old, but they have been well-maintained. Barwell, Mr. Chair. Go right ahead, sir.
Representative Steve Unger
Unverified
1:02:53
I guess my concern is, I'm going to try to choose my words.
We've got a 50-year-old bird in the hand that we're getting rid of for a perhaps bird in the bush that hasn't materialized yet. And when I think about what the electrical load is going to be in the future, which I don't know what it is, I had heard in the state of Texas they are anticipating that their electric load in the next five years is going to grow.
It's almost like a country of Germany that they're looking at. So we're going to have Germany size electric load in five years. And so I'm just concerned at our capacity. I'm concerned about shutting things down just because they depreciated. And there's nothing mechanically wrong with them. And I hate the fact that these, to think of these things getting disassembled when we could just put a fence around them and
save them as a strategic asset in case we need them. And so I'm a little unsettled here.
Chair
Unverified
1:03:59
Can you settle me? Well, I mean, it's imperative that we replace the generation that's going away. And
Speaker 163
1:04:06
you're also right on the spot. You're spot on when you say about what the load growth
Chair
Unverified
1:04:12
is going to be in the future. I'm sure all of my colleagues in the utility industry will tell you today that they're looking at lots of prospects that will, I mean, it's just unbelievable. Double your current load in a matter of five years. double your current load not in 30 years but in a short number of years and so we are working
diligently to try to figure out how best to do that and we unfortunately or fortunately however you want to look at there are 50 year old units I mean we've got to do something at those sites I mean we have a need to do that by 28 in White Bluff and 2030 at Independence and we've got to replace those and we've got to replace those in a way that uses all that interconnection that I talked
Speaker 163
1:04:55
about in a minute ago so we're gonna we're gonna do that in the lowest cost most efficient
way that we can thank you all right thank you representative senator penzo you're recognized
Senator Clint Penzo
Unverified
1:05:07
thank you mr chair uh representative hunger kind of ate up at some of my questions but mine too but go ahead so but but i still do have some so will we
be uh will there be any new generation created in arkansas prior to the 28 and 30 shutdowns yes is there anything coming online yes what what will that be uh i'm trying
Speaker 163
1:05:34
to remember the date john helped me on lake catherine
Speaker 158
1:05:38
i think it's uh 27 that's what i'm thinking 2027 lake catherine uh new natural gas fire generator uh replacing the one that's retiring there at at lake catherine and then uh we would also have plans that we will uh come forward with uh soon on what the replacement generation will be at the at the white bluff location as well and so yes we intend to make sure we've got as kurt
Speaker 157
1:06:08
mentioned earlier plenty of uh capacity to serve our customers uh seamlessly what's the
Senator Clint Penzo
Unverified
1:06:14
anticipated downtime for uh between like if you refuel or repurpose the plants uh um what's the expected downtime between shutting down the coal plant before they can be uh brought back up to speed because the infrastructure like you said transmission lines things like that that's that's the money in setting up a new plant yeah uh so you know you just need a new heat source yeah uh you know and of course you mentioned natural gas I'm curious about the downtime and
also is there a consideration for SMRs yeah I mean we're always looking at
Speaker 163
1:06:55
SMRs I mean we we talked a lot about that in our integrated resource plan that we filed with the Commission but small modular reactors for these sites I mean that's one of the things we're looking at but we got other other opportunities we have energy arc so we have argus on nuclear one now that would might be a
Chair
Unverified
1:07:15
natural place to put it sm more frankly uh but to your up for your first question the short answer is not long uh if
you build a new facility next door
Speaker 163
1:07:24
to it right like a new natural gas fired combined cycle turbine or something uh then you would just want to turn the coal off and turn it on simultaneously okay you would you would continue to operate as a coal plant at the same time you're building the new one right if you if you if you're taking the coal plant and you're going to you know start burning natural gas in it rather than coal there might be a little delay there because you have some you're you know you're using a boiler you know you're going to change fuel you're going to
have to you know you know make a transition period might be a little longer than the first example i said but not long i mean we can't afford it to be long and we're and that's one of the beauties of this transaction is that it provides us the ability all the co-owners the ability to execute their plans in a way that there's
Senator Clint Penzo
Unverified
1:08:16
a seamless transaction from today till tomorrow okay can i have another follow-up go right ahead okay um what you mentioned uh nuclear one
site uh how much more capacity for transmission do you have at that site if you were to put a another smr there
Speaker 163
1:08:33
We would have to go, SMR would be a lot. You'd have to go to MISO and figure out
Chair
Unverified
1:08:40
how much you needed to add so we don't have any headroom there today that's just open. So
Speaker 163
1:08:46
that would be part of the investment one would
Senator Clint Penzo
Unverified
1:08:50
make in putting an SMR there or anywhere else for that matter. Okay, understood. Yeah, we were kind of when we're looking at the cost of developing a sodium reactor in Arkansas, you know what what that would look like and you know utilizing one of the uh one of these coal
facilities would obviously uh you know help with the cost of doing something like that if we are able to move
forward with these recycling programs and things of that nature so yeah i'm gonna tell you
Speaker 163
1:09:18
uh i mean it's a it's a great thought senator um the coal facilities are 28 and 30 yeah and so Well, you've got to, I said it's imperative we replace that generation by those dates. Right. We are all over nuclear. We like nuclear a lot. I think all of us in this room do, I hope, because it is very, you know, it's just, you know, zero emission, you know, very reliable capacity.
As a utility at work for energy, we have a lot of it. We want more. We just got to make sure customers can afford it. But those sites at Independence and at White Bluff are very large sites. Like White Bluff has like 3,600 acres footprint. Independence has about 1,900 acres. Those SMRs don't require near that much. So you could go ahead and replace the generation that you've got to replace with natural gas or coal or natural gas or solar or batteries or repower or whatever.
You go and replace that in 28 and 30, but you still can put your SMR
Chair
Unverified
1:10:21
there and just go through the MISO process and get more transmission capacity. There's certainly something to consider there. Okay. Thanks for the information. Yep. Thank you. And
I'll go ahead. Representative Beck, I'll come back to myself in a moment. You go ahead. Thank you, Mr. Chair. I saw a lot of
Representative Rick Beck
Unverified
1:10:45
what you were saying is kind of flying over a little bit.
Above my pay scale, maybe that's the way to say it. But you talked about the great, I mean, advantage of this 3,600 megawatts. We're talking about the two facilities and some kind of transmission thing that you were going to gain as a result, and that's what made this a great thing to do. I don't doubt that. But could you just a little bit deeper into that? And maybe are you saying that these facilities currently have the ability to transmit that much power out?
and that is that what you were referring to yes sir okay all right so i like that the one of the things that you said that you said a megawatt's a megawatt and and the flag went up there because you know a dispatchable megawatt is not a base load no fair enough fair enough i'm just talking about i think you corrected yourself later on i thought you did uh but i want to take it one more step deeper all right during winter storm yuri 80 i'm told 80 percent of all of the natural
gas wells in oklahoma's the gas they froze up there was no natural gas to be had as a matter of fact some major customers here in arkansas were asked to shut down and we had to do the governor had to get involved with it actually at that time and make sure the gas didn't get cut off to these these people because of that so my concern is and i'm i'm gonna weigh out on limb here so you'll probably have to correct me here but it's my understanding you can have a couple
three weeks or a couple months or a month or so of coal sitting out there on that yard but if the natural gas stops the natural gas stops now there may be that maybe intentions to liquefy natural gas and do something there to give you that uh supply cushion or something of that nature but Without that, you know, I like natural gas generation from the clean aspects of it and the dispatchability of it and all that. It's great in that aspect.
But I do have my concerns with exactly what happened in Winter Storm Urie if we go to that route. And then the final thing, and then I'll let you know, excuse me, is that we talked a lot about you talked about that well we could use sawdust I think you said and other things to do that you also talked about solar and batteries and and and kind of some of
the questions earlier were related to you know the burden of bush versus the burden of hand so it's kind of the concern I have and I think some of the other members of the community committee have here is this is it going to be that this you're going to create something that is truly you know the same it's 3600 of dispatchable just it's as special as coal would be plus it would have a logistical background as far as its supply as to what what powers that
facility an smr is obviously a good a good choice in that in that but but you know we're kind of being asked to say okay we're going to take 3600 of your megawatts away and we're going to replace it we're going to replace it but but uh the the some of the projections that i've heard is that we're looking at 30 to 35 increase over the next four years uh the totality of the next four years as far as load is concerned that is a huge huge amount of load increase and I hope the committee
understands that that is you know one-third more wires in the air one-third more generation and all of that compared so you know I understand that we need to get rid of the coal fire plants but it seems like this is not an optimal time to do that because we are you know there's a lot of people that will tell you that the 30 whether it's 30 maybe it's 20 or whatever there is no plan to to take care of that that we could get that generation online to do that so with that
i would say why is it necessary to get rid of those coal-fired plants right now as opposed to creating i understand that the transmission aspects of it but as opposed to being able to say okay let's add some other general let's add 3600 megawatts of generation on it and then talk about taking them out and replacing them at that point because i am concerned about the growth uh and debate you know arkansas thanks to the co-ops and thanks to to energy you know we're
one of the most reliable lower priced energies in the nation i don't know if most people realize that when i get my bill sometime i don't i'm only kidding but we really are and i want to make sure that we we keep that and so i would like you to address that in terms of this this move because it seems like some of the things you're suggesting are maybe don't quite match up with with what i've been told yeah
Speaker 163
1:16:06
well i tell you i i agree with everything you just said and and i wish we could
do that and i have to i'm just coming from a planner's perspective i wish i could just keep the coal plants running plus 28 and 2030 and and give a little cushion if you will to do that but unfortunately we can't and I can't I'm not a logger that's why I said I'm a planner so I can't get into the reasons why legally and all that stuff but you know I've got a glide path to replace a lot of generation by
Chair
Unverified
1:16:41
2028 and 2030 and like I said a minute ago it's imperative that we
do that if we don't do that that ain't good that's really bad and as you point out we have a lot of economic development opportunities like something
Speaker 163
1:16:57
that i have never seen and that's a really good thing but we've got to have the generation to serve them or they won't come here the the the legislation that was passed by by this assembly really helped that really helped accelerate getting those generators uh cited approved and the commission's a review of it you know in a period
of time that was a huge help and thank you for that from a planner's perspective but we've got to we don't have
Chair
Unverified
1:17:27
the option of just keeping the coal plants running you know you know past you know 28 and 2030 respectively whatever site you're looking at and so we've got to come up with with with a plan that uses all that interconnection capacity you you mentioned
Speaker 163
1:17:42
uh we've got to consider all the universe of options that are available to us because when you're planning you need to have a diverse portfolio or to your point about uri when the natural gas
froze up you know if you're 100 in natural gas then you can't get the gas and i was there buying $600 MCF gas during URI, and if URI 2.0 comes again and all we have is natural gas, then if that happens again, that could be a problem. So you've got to have a diversity of technologies, the diversity of fuel supplies, and we consider all that when we're putting together our entire portfolio for sure. But again, I wish we had the luxury of doing what
you suggest about keeping it available for a little while but we just don't why is 28
Representative Rick Beck
Unverified
1:18:33
and 30 you keep acting like it's actually driven in stone somewhere so so explain exactly why that is and let me interrupt if I may represent him back I was about
to ask if and I said earlier we weren't going to talk about the consent decree maybe i have
to retract that statement because obviously it's the elephant in
the room we have to at least address it uh representing back you and i both know that is where that those dates came from uh and i'm i'm i've always wondered my question was going to be did this come down from mount sinai on tablets and and we know it didn't it was negotiated by energy and and the plane of the Sierra Club which but I we are in a different environment today than we were then we have a different president and we have
one that has issued an executive order more or less saying you know coal is good and we need to use it for national security reasons how does that affect the tablets that came
Speaker 173
1:19:46
down from Mount Sinai previously yes Senator Johnson Senator Beck I would point out the 2028 and 2030 dates are set in the consent decree that was part of the settlement agreement between all of the co-owners
Speaker 157
1:20:00
and the United States Department of Justice and the Sierra Club was the
other party to that proceeding and in the Insurance and Commerce Committee meetings during the recently concluded legislative session, Justin Allen, on behalf of Entergy Arkansas,
Speaker 158
1:20:18
presented a legal analysis, and you can go back and see that, but that demonstrated why, even in the light of the president's
Speaker 157
1:20:30
executive order, attempting to overturn or to challenge the consent decree would result in prolonged, expensive litigation with a
very low probability of success, and would leave us
Speaker 158
1:20:42
with increased uncertainty about what our generation portfolio will be going forward, would put our economic development prospects at risk, and therefore, Arkansas is better off moving forward with the plans that we are describing to you today, and the real estate transaction is the first step toward building the next generation of generation facilities to serve our customers
in a way that's going to continue to provide affordable electricity. And thank you for approving the recent legislation that gives us the tools to more cost-effectively build that new generation to the benefit of our customers as well. That is an important key ingredient to us moving forward. But, Senator Johnson, you did ask about the consent decree, and that does control those dates, and we don't believe that there is a feasible option
to move in any other direction on those two coal
units. You and I might get to disagree on that, John, and my feeling simply is that I think about these coal plants, especially in light of some of the recent developments that show us, and everybody talks about AI and what's going on, but I think we can all agree that our demand is going to go up, and it's going to go up not just based on population increases
but on new technologies. And so the demand curve is on the upswing, and it may cause some of these things to be revisited. I remember historically, not personally, but we had plenty of aluminum in the 30s, and then we found ourselves in a war It needed a whole lot more airplanes, and the Germans had blockaded the South American ports that would bring the bauxite to the U.S. for more aluminum.
And so the powers that be, starting with the president, turned to Saline County, Arkansas, and said, open up all those mines and start mining that bauxite and building these airplanes. And we may be in a similar situation now that this— And I have my problem with the consent decree is because it was based on the presumption that there were Clean Air Act violations. And after Loper Bright, where the Supreme Court basically said that agencies don't set the law, Congress sets the law.
So it was a question of whether there really was a Clean Air Act violation. But we're not going to try that here. Mr. Allen may have been right in his analysis, but he also might not have had all the factors into that. But to try to get us back on schedule here, I simply want to say that in light of President Trump's executive order, I think it's probably incumbent upon Arkansas and probably other states as well to revisit some of those decisions and see if there might be some way. And I'm not saying we're not going to close coal plants.
I'm saying, but we may delay that or have a moratorium on closure. And I think that someone in the administration used that term moratorium on some of these closures until such time as the alternative fuel sources, which I applaud and I appreciate you briefing us on that. But let's not have that that moment as Representative Beck reminded me of when I had to call Governor Hutchinson and say, please make a phone call. So our Green Bay packaging plant outside Moralton is not going to have to close because it would have been a disastrous thing for that area, which was in my district at the time.
So with that, I'm going to we're going to try to clear out our speed. we've got our other witnesses we want to bring to but uh senator mckee you are up i'm
Speaker 48
1:24:38
sorry thank you mr you're there okay thank you uh and thank you gentlemen for
Senator Matt McKee
Unverified
1:24:44
answering all of our questions i want to first of all say thank you to entergy and the co-ops and our municipal utilities for providing reliable electric service uh to the folks that we represent i know that it amazes me
on a daily basis the system that's that we've created over the last hundred years and how it operates reliably uh 99.9 percent of the time so thank you for the work that you do i think some of the members hit on this a little bit but i was going to get a little bit more technical can you tell us how many more megawatts you have planned to put on the grid between now and the closures of the coal plants respectively and how much of that is eaten up by new development
and if there will be any period of time at which we will be relying on the MISO or SPP footprints to import power to cover those shortfalls. Just the latter part of your question first no
Speaker 163
1:25:39
we don't want to we plan not to rely on others for serving our customers so we've got to add generation to meet our customers demand and energy as well as a planning reserve margin so you got the planning reserve margin is just kind of like a spare tire you know it's just a little bit extra in case something happens so uh yeah we have like i mentioned the lake catherine plant before
which john said was 27 i didn't recall when that was senator but uh any economic development project that we got coming and we're talking to a lot of now in commercial negotiations it all involves we have to have a generation to meet your demand and energy requirements we're not out there with a 30 percent reserve margin and said we got plenty come on and that was why the legislation that you helped sponsor was so important to help us get there to to capture those jobs and those prospects but we've got plans to add those generators when we add those customers and we've
got plans to replace this generation at white bluff and independence as we as as it has to be transferred from coal to something else but that's a that's our you know that's our plan and
Chair
Unverified
1:26:55
our plan is kind of articulated it's not kind of it is articulated in our 20-year integrated resource plan that lays out over time what Intergy Arkansas expects to add don't have it in front of me you can look at you probably have knowing you you've probably already looked at it but you know
it has a lot of gas-fired resources in there over time. It takes a while to get them built. It has
Speaker 163
1:27:19
some solar and some battery in there. It even looks at some other technologies as you get out and out past year 15, if you will. But we've got to add a
Speaker 158
1:27:31
lot of generation. There's no question. And I appreciate that. Senator, you asked about we are not prepared today to identify and articulate our specific replacement plans at the site, But we are under an obligation to have adequate generation to serve our load plus planning reserve margins,
and we intend to meet that obligation, and we'll do that.
Senator Matt McKee
Unverified
1:27:50
Okay. And for the benefit of the committee, if you haven't seen the most recent FERC report, I don't know if it's the most recent. I saw it came out in December or something like that. The southern MISO region is a high concern to our federal regulators because of the proposed closures of the coal plants. And while Arkansas has been planning on those closures for longer than most other locations, if we put ourselves in a position where we're reliant on that footprint
to supplement our needs, it could be a problem. So I appreciate you answering those questions and appreciate the work you do. Thank you. uh representative backfield hold
on co-chair ladyman has a quick are you are you are you
you're good okay representative lady okay thank you mr
Representative Jack Ladyman
Unverified
1:28:45
chairman well thank you all for being here
and it's been a good discussion but i'd like to go back to why we're really here the two plants that we're talking about and moving forward what you're going to do so uh when you talk about replacing coal with natural gas so the the power purchase agreement i guess that you
also you're good there right that doesn't change your purchase whoever's purchasing your power is still going to be purchasing your power there's no change required of that if you change full street fuel source is that correct no i
Speaker 163
1:29:17
don't i don't know exactly excuse me if i'm not tracking your question
who the purchases of our power are retail customers right is
Representative Jack Ladyman
Unverified
1:29:25
that what you're talking about? Yeah, that's what I'm talking about. So I should ask that
question to me. So when you change from coal to gas, you have a higher water demand and gas demand. So is that available at that site, the gas that you're going to need? Because, you know, we have three major gas lines that come from the oil fields down in Oklahoma and Texas, goes up to the northeast. But that's
basically running from corner to corner is that
gas line close to that gold coal plant yes it is
Speaker 163
1:29:58
and today it's not there but when we add our new generation it will be there and
Chair
Unverified
1:30:04
it's you know it's a cost but it's not you're not having to build one from fort smith to right wherever i mean 30 mile yeah okay great
Representative Jack Ladyman
Unverified
1:30:14
um what about the water and you know if you have natural gas it's got to be a cleaner process maybe reverse osmosis on the water and i mean is that something that you're
able to do the the amount of water you need
Chair
Unverified
1:30:30
yes i mean the coal plants today use a lot of water and so i mentioned previously that they have you know not only wastewater treatment facilities but also intake from the white river at isis in arkansas river for white bluff so that
Representative Jack Ladyman
Unverified
1:30:50
water source at both sites okay so in the short term nuclear is probably not a lot
not an option when we're talking about a 28 so basically natural gas is basically your
Speaker 163
1:31:02
only option is that correct well i don't know i wouldn't say it's the only option but it's certainly a a very attractive option if you will i mean our state has a lot of natural gas there's Our country has a lot of natural gas. It's relatively clean burning, of course, compared to coal, and it's economic. You know, we've got to have rights that people can afford to buy electricity. So natural gas has
Speaker 173
1:31:28
got to be a part of the equation. And Representative Leidyman, I would point out, too,
Speaker 158
1:31:33
is that for Entergy Arkansas, we have Nuclear One, which accounts for over 65% of the kilowatt-hour sales that we have in the state.
And so we have an existing reliable resource that will continue to operate, and that will be a big benefit to our customers in the state and our ability to meet the needs of our customers as that resource is still there and isn't going anywhere. Just one more question. Looking
Representative Jack Ladyman
Unverified
1:31:59
forward, you know, supply and demand. So we know that the demand for natural
gas is going to go up. We're building a lot of new plants. other states are building a lot of new plants so what do you all project the price of gas
i mean i know a lot of people look at that i used to do that at a factory i worked at where you look at what the price is going to be six months a year and five years
and so forth so what do you all see there do you see a major increase in the cost of
Chair
Unverified
1:32:30
gas which might raise our rates all that's laid out in our integrated resource plan but the short answer is yes we make estimates of what we think the price of gas will be over our in our irp over our 20-year planning horizon and yes the demand for gas will go up but we also think the supply
Speaker 163
1:32:44
is going to go up too right so people are punching
more holes in the ground and getting getting gas particularly based on the you know the
Chair
Unverified
1:32:52
the new administration's objectives uh so but yeah i mean the price of natural gas is going to change from
Speaker 163
1:32:58
what it is today it may go up we we we have make those estimates uh for sure as well as we do for all other fuel and other technologies
Speaker 229
1:33:06
but you don't see it as a major increase in our utility costs well i don't know i don't know
Speaker 163
1:33:13
what you know what the cost is going to be as it relates to how
Chair
Unverified
1:33:18
it goes into rates you know like i said a minute ago we we don't want to put all of our eggs in one basket you know like john mentioned the nuclear is out there you know it has
Speaker 163
1:33:30
very low costs uh fuel costs it's like a penny a kilowatt hour it's the upfront thing yeah it's the capital that gets you but the capital sunk it's already there right but but the nuclear is there and we're just trying to make sure that thing operates you know 24 7 365 because we want our customers to get those penny kilowatt hours uh but they're they're there and that's stable i mean that's
not nearly as volatile as natural gas or some of the others and we have long-term contracts
Chair
Unverified
1:33:58
for for the fuel there and so that's a big part of the reason that our fuel costs are stable even over our long-term horizon because like John said you know more than two-thirds of our energy comes from
Speaker 163
1:34:09
the nuclear plant in Russellville and the one in in Mississippi called Grand Gulf so that's a good thing for our customers but you know as you add natural gas as you add other technologies to fill up in our case that 35 percent then you want to make sure that you
Speaker 164
1:34:27
you don't put all your eggs in one basket there and you
Speaker 158
1:34:32
have a diversity of supply and and representative ladyman one thing that was was mentioned during the passage of the legislation was the opportunities as uh for for arkansas natural gas to as the price moves uh you'll probably see more drilling activity in arkansas and that gas resource being being brought back to the market it was it was displaced by cheaper sources of natural gas uh several years ago, but there is a great amount of proven natural gas reserves in the state that if
the price moves you'll see more drilling activity and that was one of the things that I think people in the gas industry mentioned and I know Secretary Corey was in the room earlier and he had mentioned that previously as well as the price
Speaker 157
1:35:13
moves there are known reserves that would probably come online to act as a moderating force and that's what our fuel representatives have
Representative Jack Ladyman
Unverified
1:35:20
told us as well. All right. Thank you for those answers, and I appreciate y'all keeping our rates low
and those people sitting behind you. Thanks. Thank you, Representative Lainey. And Mr. Bethel, I'm sure that Representative Beck's constituents looks like he stepped out,
but they'll be thrilled to know that we're going to be maybe buying some more of their gas up there in the Fayetteville Shell area. And that's good for Arkansas, and it's good for them as well. First, I want to apologize for the relatively short notice of this hearing, but I'm grateful that y'all were able to come and answer the questions. And I'm sure we've got more work to do on this, but I'm grateful for your coming today. Thank you. Thank you. And now if folks from Arkansas Electric Cooperatives will come forward,
I promise I won't keep you as long as we kept the energy people. Mr. Haston, can you all sit in and both introduce yourselves for the record? Yeah,
Speaker 238
1:36:25
Chairman, I appreciate you having us here. Andrew Lohoski with Arkansas Electric Cooperative, Vice President, Market Operations. And I'm Buddy
Speaker 239
1:36:32
Haston, CEO of Arkansas Electric Cooperative. Thank you for having us.
I want to start, Mr. Haston, when I first met you, I found out that you're a Navy nuke guy. And my
first reaction, does that mean that AECC is going to have all these SMRs online all across the state? That's why they got you here. And I admit that kind of as a joke, but now in light of everything else that's been said today, that might be a pretty good place to start with just a general question to you. Is that something that could possibly, that your organization might be looking at?
Speaker 242
1:37:13
Yeah, interestingly enough, the consulting firm you just hired, if you look at their CEO for Xcel Energy, he sat about as far away from me as Andrew is through Navy Nuclear Power School back in the 90s. So it's funny that we both sat in the same classroom, and here we are CEOs in very different businesses. But, yeah, I think that program generates a lot of good folks,
Speaker 239
1:37:41
teaches you all about nuclear power as far as us at the co-op there's some things there's some
realities about nuclear power right
Speaker 242
1:37:50
and it's the funnest thing to talk about every every uh every data center in the world's talking about signing a deal meta everybody with xc energy with terra power, with NuScale, with, you know, GE Vernova. But the reality is, it's a, look, it's a technology that can be harnessed and done safely, but it takes a lot of doing to do that. The military
builds a nuclear reactor every year, so our country does know how to do it, but commercially in the civilian sector, we haven't, really, for about 30 years. Southern Company decided to go on that journey to build two AP1000 reactors in Georgia. Their initial budget, I think, was $14 billion. It was supposed to be started and online in about five years. You know, 2016 is when they predicted it would come online. The journey ended last year in 2024,
$36 billion later. And so what you really get into is every company only has so much stroke, and the stroke is your balance sheet, right? And you can only borrow so much money, and you can only finance so much money, and all of that is risk. If you go to the state of South Carolina, they have had a very different story. Georgia survived, probably just because Georgia's more densely populated, more money, more industry, so they survived that. South Carolina did not,
right? If you go look at the South Carolina nuclear program, it shut down midstream. People are still paying bills a decade, two decades later for a plant that was never built.
Speaker 239
1:39:35
So to say that there's a lot of risk, so it's not a conversation that should be taken casually like, we're just going to build an SMR. It takes a lot of planning, a lot of work. I know they say you should never look over your fence at your neighbor's cattle and covet them, right? It's a sin. But I do look across at Entergy's Arkansas Nuclear One power plants and covet them because I wish we
had them, right? When I go to
Speaker 242
1:40:03
conferences, CEOs, when they're asking and advising their lobbyists what to tell people in D.C., one of the things they say is, whatever you do, find a way to get these currently operating nuclear plants relicensed, because they do become the cheapest power you can do, right? And they are carbon-free, and that
Speaker 239
1:40:22
argument roils in America, whether you're on the side of carbon or not on the side of carbon, nuclear solves both those problems
elegantly. So the technology is wonderful, but when we're talking about the timelines that we're talking about with 2028 and 2030, they are an impossibility. We don't have a site that's prepped and licensed.
Speaker 242
1:40:43
Even if you said, oh, could we use one of these coal plant sites? I don't know. It's several years of study. You kind of got to go through the motions, right, to do that. And we're not a nuclear operator today. Intergy has that significant advantage. It takes incredible
infrastructure to be nuclear. That's why some countries bankrupt themselves to
Speaker 239
1:41:05
go nuclear. So the reality is we've probably, like most cooperatives in the country, I don't know of a single cooperative in America that owns and operates a nuclear power plant. I've operated them, but as a military guy, not a co-op guy. But there are many of them that are partners in these things. I applaud what you did in the section before here in saying, look, it
Speaker 242
1:41:27
may not be the next thing we build because it can't be done in that short a timeline,
But if you don't start preparing now, you'll never build it. So I thought there was a lot of wisdom by this committee in the previous discussions about, hey, we don't know what's possible in the future, but let's start making strides so that should nuclear make sense to come forward. These things get more cost effective the more of them you build. The first of a kind is very expensive. It's the tenth of a kind. A wise CEO once told me pioneers get the arrows, settlers get the land, and co-op guys like to be settlers.
So that's probably where we are in the nuclear space. We're highly interested. We do stay abreast of it. We probably do some studies here and there, but quite honestly, we don't go around and sort of talk bigger than we are because we understand how heavy a lift it is for nuclear.
I appreciate your answer. And let me say this, Mr. Jason. I know we can't put a nuclear plant of any kind in place as quickly as we could put a gas plant in place, for example.
But I've asked myself, and I generally, when I make speeches, I use this joke that if we built cars like we build nuclear power plants, nobody could afford to have a car. But part of our problem, and I think it's been clearly identified, and I think this administration is looking at that, is that it's not a technical problem. It's a bureaucratic problem and a regulatory problem. And I'm not saying we don't want safe nuclear plants because we do, but it's been discussed today, the newer technology,
especially the sodium reactors, much safer than some of the older designs. and not say everything's perfect, but if you go to the bureaucrats and you've got all these designs, finally you say, this is the design, this is the Jeep, this is when we're going to build a million of them to get through World War II, then you don't have to constantly go back and reevaluate the designs. You have a standard. This is the one we're going to do kind of what France has done, which is cookie-cutter these things all around, instead of regulating them to death,
which is, I think, the American model. Isn't it ironic that the greatest capitalist nation on Earth has regulated its energy production to death? But assuming those things are somewhat simplified, not totally, but somewhat, would that perhaps, And perhaps, I'm not going to say you'd change your answer, but if that environment changed, would that open up opportunities that perhaps in the past neither in Arkansas or any cooperatives had been able to do?
Speaker 239
1:44:23
Oh, absolutely. I mean, I can hope and dream and pray, and I do all three. Is there
Speaker 242
1:44:28
a reality, if you think about how much America has spent on wind and solar tax credits? I think last I checked, on record, it's around $500 billion is what we've already spent. And when you look at what's going to be spent to the end of what's currently in service, it's not quite a trillion, but I wanted to say it was like $864 billion. Well, I just said you can build two very large nuclear plants, each 1,000 megawatts,
so two gigawatts of nuclear, even at the most expensive prices on the planet, what Southern Company did, for $36 billion. How much could you build for a trillion? And how much energy did energy just say they get out of those nuclear plants? It's like exponential factors more than we can get out of these other carbon-free sources. So the answer has been staring at America for a long, long time. I would love if the government figured that out and said, hey, we're going to help companies to go nuclear. And, you know, maybe we have to partner with somebody for nuclear support, engineering, those kinds of things.
But as far as owning, operating, and being your own operator, I mean, trust me. nothing would excite me more than the shim rods one more time in my life but uh but but you know that's not what we're looking at today but we we do hope for that obviously we're always looking at the future and what's changing like i said we try to keep all doors open in front of us all we try not to close any doors or options but at the same time we are obliged we we have to keep our members power reliable and affordable therefore we have to make real plans based on the data that
we have right now and based on the laws we have and so that's what we do but to say that we do have our own dream sessions our own strategy sessions where we look for if that were to happen would we pivot and would we do
that we do that and i would think all good companies do that and before we get too far off on that tangent i want to bring us back to uh some of the issue we were just talking about uh acc is probably the will be the big owner the majority owner of
new arc when this uh finally is finalized uh what is the uh and again i know you're probably gonna have some more planning before you say this is what no i'm pretty transparent i'll give you some well just everything but
Speaker 242
1:46:46
the label well tell us what you've got
yeah absolutely for for that of that plant because it's a lot of your customers your members will want to know yeah and i i i
Speaker 239
1:46:57
listen to intergy and so i'm trying not to repeat things that kurt and and mr bethel said that they
Speaker 242
1:47:04
did a great job uh one aside though you know neil sadaka said breaking up is hard to do and so two and a half years ago me and kurt casaberry met at the lone star steakhouse by bass pro and talked about hey looks like we got to get divorced and you know we had to start fighting over the kids. And so we've been in sort of, you know, divorce lawyer court for two and a half years, figuring out who gets what kids. We said we wanted the smart ones. We think that was independence, but no. No, I just worked out the timing, the timing, the timing of the consent
Speaker 239
1:47:35
decree. And, you know, Intergy's portfolio is very different than ours. I've already told you, I'm a slightly bit jealous of some of their assets. And their portfolio is different than ours. Sort of, you know,
Speaker 242
1:47:46
what they're looking at and what they need to do for the future was different on us. And so we got to a point where being just jointly together on everything, timing and sort of that didn't work
Speaker 239
1:47:58
out. And so that's where this concept was born. All of us need to preserve those interconnect rights. And you've got to think back in time, and even
Speaker 242
1:48:06
still today, there was such a gold rush for renewable energy. If you start at the top and you go down for the next 100 interconnection requests, they're all solar. So you've got to get behind 101 before you can even like get service so if you don't have interconnection
Speaker 239
1:48:24
right now you don't connect now miso and spp have applied to ferk to change that but ferk rejected that so right now you got to get in line and first in line get served and even if you're bringing
resources that don't serve the solve the problem that's the american system we have
right now i'm sorry to interrupt buddy but that's what i meant by
Speaker 239
1:48:46
bureaucratic problem yeah no i totally agree so so as john and kurt were trying to allude to if you've got the responsibility to replace
Speaker 242
1:48:53
this power you you almost have to reuse that interconnect because you can't do it any other way it's just it's not a physical reality and now miso and spp know this is a problem their staffs are working on it they are working with ferk hopefully they'll come up with a with
a good solution that gets approved but in the framework that we're working under real constraints That was a real constraint. So looking at what we wanted to do, we've always known all along, given our portfolio, that we couldn't go nuclear. We didn't believe that the renewable energy category was going to be able to allow us to satisfy our capacity requirements in MISO for these particular units. For instance, if I build 100 megawatts of solar in the winter, I will get 2% credit.
So I'll get two megawatts capacity credit
Speaker 239
1:49:47
for 100 megawatts built. But I have a requirement to bring 600 megawatts of capacity, right? So you can't build
Speaker 242
1:49:56
yourself there. So really, when you start to look at what we could do, really the only resource that we saw available to us was gas. And that's pretty much where everybody's at. Maybe some folks are doing some solar and batteries, but quite honestly, the real capacity is in gas.
And then when you start talking data centers and high load factors, you've got to have energy behind the capacity, so then it really becomes that. You can't build a coal plant in America. I think that's a shame, but you can't. So we knew long ago that we needed to replace this energy. So we announced last year that we were starting that journey. So we've already started building a power plant. Unfortunately, it's in Texas. We've had that discussion. Just know this, that we saved $200 million in infrastructure costs by locating it there,
and we're going to save millions over the life of the plant based on probably that location and what you can get for fuel pricing there. When you look at Arkansas, and it's in SPP, and when you look at that side of the state, it's more problematic building gas plants over there. MISO, not so much. So we do plan to build a combined cycle natural gas, two advanced class combined cycle gas plants, expected output about 1,350 megawatts.
We plan to have partners. You know, the other
Speaker 239
1:51:20
partners in this independence power plant, it will be us and the municipal power suppliers that are here today. And so between us, I think we'll end up with about 75%. They will end
Speaker 242
1:51:31
up about 25%. These are rough numbers. But, yeah, we would replace it with that. Why did we select Simple Cycle in Texas and Combined Cycle
Speaker 239
1:51:41
in Arkansas? This guy over here is really bright and he runs tons and tons and tons of mathematical
models and stochastic models. He models what happens if gas goes
Speaker 242
1:51:50
to $4, $5, $6, $8, what happens if we get carbon? We ask him, Andrew, we're scared, go run a math
Speaker 239
1:51:58
problem to make us not scared or tell us what to do. when we run all those scenarios
Speaker 242
1:52:03
and we do all that planning what we show is that in SPP it was more cost effective to build simple cycle because they have so much wind energy in SPP. MISO does not have that so it was more cost effective for us especially given our load profile to have
combined cycle natural gas because it's a lot more efficient so the more energy you produce the cheaper it gets with combined cycle so how we're going to sequence it and I was trying to remember of people's questions there was
Speaker 239
1:52:35
a concern we do have a hundred megawatts coming online this year at two small additions just to sort of get us going
Speaker 242
1:52:43
and then in the Texas power plant which feeds the west western one-third of Arkansas for our for our members it's in that market it will come online in 2028 before White Bluff comes offline but we have to be perfect in this
whole execution because i'll talk about that in a minute but we have to if we operate and execute our projects perfectly it should come on and be making power by november and by consent decree it's as soon as you pop your champagne uh welcome in the new year 2029 then white bluff can't be burning coal anymore so we we should be okay there we it's not a lot of time before but we should be online before the reason this whole uh sort of i call it a divorce settlement some of the first
stuff that we have to transition is is plant property or or land because each of us need access to go and develop our generation and so we will be building on site we do intend to put it at the same it's independence power plants got a lot of land there right we'll carve out another chunk of land and start building our power plant while it's still operating and so this gets to the question how long does it take to cut over it's not immediate you know we can't just throw a big switch like young frankenstein and all of a sudden it's all good but what we can do is have
it all pre-staged and ready to go coal plants normally take outages in the spring in the fall 30 60 90 100 day you know it depends so in those time frames we'll try to coordinate obviously Intergy is still going to be operating the plant, so we've got to be real good partners, and we've agreed to sort of both be good partners in all these things to help us get our new generation online. But that would be the plan. It will come online, be commissioned before Independence has to cease burning coal. So we will have done this grand and glorious swap of coal for gas, but that's at a pretty significant cost,
and that only serves the load we have. And then, you know, you've got the challenge of future load. And the challenge I think you have today, the supply chain lead time for gas turbines, if you want a modern gas turbine, we're working with an engineering firm out of Kansas City. They're very, very large. I just asked them for turbine lead times if I wanted to buy more than I've already purchased. and the lead times on gas turbines today are 48 to 60 months so if one of these data center guys
comes they want to build their data center and have it online in two years but a gas turbine is four to six to five years away and when you buy the gas turbine and it gets delivered you've got to still build the power plant around it so you ain't coming online in 48 to 60 months it's more like 72 to 84 months. So pretty much
Speaker 239
1:55:42
the world has gobbled up all the gas turbine capacity. Now, will more capacity become available? Will some of those orders get canceled? Is some of
Speaker 242
1:55:50
it speculative? We don't know. But I know today, if I start ringing phones, if I wanted to build
another power plant, in addition to the ones I just briefed you on, I'd have to know
Speaker 239
1:56:02
somebody or call in some favors. Maybe we're in the wrong business. We should
be in the turbine business. Well, but four years ago, those guys couldn't sell
Speaker 242
1:56:11
a gas turbine. That's right. You should have been in the solar business. And so those guys, if we'd have had a crystal ball, we would have built all these four years ago because they cost about half of what they cost today. But, you know, none of us does. And in our world, if we get too much excess generation in our system,
our members have to pay for that. And if it's sitting there idle, they're just paying for a real expensive power plant that's not useful to them. So we're always in this balancing game of how much excess power do we carry for new economic development and how much do we really just keep what we need to power
the members' homes, businesses, and ranches. I remember when, before fracking, when
everyone was concerned about natural gas supply, and so they told all the utilities, go build coal plants. So you did.
And now it's the other way. It's going to get rid of that horrible, dirty coal, and you need natural gas now. Now, fortunately, natural gas has made a big comeback, and that's good for consumers. That's good for Arkansas. But as you say, those things change, and it's hard to have a crystal ball. I have one final question. It's a simple one but kind of a pointed one. And were the co-ops consulted prior to entering into the consent decree by Entergy with the Sierra Club?
Speaker 242
1:57:41
Yes, I think it's fair to say they were consulted. I wasn't here, conveniently. No. No,
Speaker 241
1:57:48
but no. I've been a minority partner in a business
before, so I know you have less rights when you're a minority partner. No, I believe Intergy,
Speaker 242
1:57:58
I wasn't here, but I think there's paperwork to show that the co-ops were consulted. And I would maybe take slight exception with Intergy's statement that we are parties to the consent decree.
I don't think we are. I don't think there's, we are not a party to that agreement. But we do have an agreement that us and the other minority partners signed that said we would not oppose them becoming a party to something like that. And so, yes, back in 2016, 2018, I got here just about a year too late. In 2018, the co-ops kind of understood that these power plants were going to get tangled up and encumbered.
Speaker 239
1:58:43
And then you've got to get a whole bunch of lawyers to figure out exactly what
Representative Randy Torres
Unverified
1:58:53
encumbered looks like. Okay. Thank you. You have a question? Yeah, quickly. Representative Leib. I hope this is a quick question. You talked about the interconnectivity issue, about new connections. So I don't think we ask energy this question, but if you add additional capacity to a current connection, is that an easier road? I mean, like you put another turbine in a plant and you up it by 50 megawatts.
Can you do that easily, or is it the same problem getting
Speaker 242
1:59:21
in line? Andrew might know the line question better, But they still have to do the same studies, and then those studies sort of still follow the same process, and then whatever upgrades would be required, you'd have to make those upgrades to make sure that the system can handle all the power that's planned to be put
Speaker 238
1:59:39
in there. And I'll let Andrew add any commentary. Sure. So there's a specific replacement process, which is up to the current amount of megawatts.
Anything above that goes to the back of the line, so we would be
behind all of the solar. Senator McKinney, you have a question. You came off the board, but. The answer. Okay. All right. Great. Yeah.
Speaker 239
2:00:02
Gentlemen, thank you so much. One other thing. You guys had a question that we did want to make sure you got an answer to. Yes, sir. The very
Speaker 242
2:00:10
valid question about, and remember, Entergy's portfolio is different, so their answer can be different. But my portfolio will be 62% gas or 65% gas when this is over.
And so I am much more dependent upon gas. and we have these reliability concerns. So one of the things we will be building into all of these power plants, all three that I mentioned today, they will be liquid fuel backup. So it's not as good as a coal pile on site because a coal pile can have up to 80 days of energy on site. You just can't store that much diesel fuel, but we will be permitting and siting for liquid fuel backup. It's been our experience that every winter event,
Not to say the future ones won't be different, but in general, it's about five days. You've got to be able to jump in the pool and hold your breath before you can get, you know, everything sort of freeze up. So we'll be planning on about a five-day supply. Now, you can kind of resupply while you go, but from a reliability perspective, so that we don't get trapped into that $600 in MMBTU gas, we could switch over to fuel oil. We did that during URI at our FITSU plant. It's only a 180-megawatt plant, very small
Speaker 239
2:01:21
compared to these numbers you're talking about today.
That 180-megawatt plant saved our members $34 million because it can burn diesel and not gas because
Speaker 242
2:01:32
gas got so expensive during that winter storm. So everything we're building will be reliable. Where we will be susceptible is if gas goes to $10 and stays there for 10 months, I think. But Andrew also, he's our Oracle. If you look out at the Henry Hub out to 2035, if you look at the near-term hedges and other things that we have in place out three years right now, gas is pretty steady out there.
And these guys sort of know what's planned to come online. I would tell you this, that natural gas is the number one producer of energy in America right now, I think, and that used to be coal. so that switch happened and gas is cheaper today than it was back then so the natural gas and the oil and gas industry has flexed and responded i don't know what the future holds but it is a key risk to us we become much more addicted to that
Speaker 239
2:02:25
commodity i wish our portfolio was more diverse but you are limited on what technology options are available and we'll thank you for
our time today thank you so much for your testimony again i apologize for the shorter notice but you've been very helpful to us and if folks with the municipal utilities will come forward and I promise I'm not going to keep y'all as long I think we can wrap this up but I'm also not going to put constraints on committee for really relevant questions so if
y'all will come forth and introduce yourselves for the record
Speaker 256
2:03:02
i'm brett carroll ceo of comic corporation in conway arkansas
Speaker 257
2:03:13
jake rice general manager city water and light jonesboro
Speaker 258
2:03:19
arkansas and i'm bob adkins the general manager of
west memphis utilities okay and thank you all very much and I'll use the prerogative of the chair since Mr. Carroll is my constituent.
I'm going to start with him because I'm obviously very concerned about the situation with Conway Corporation and before I do, I want to say thank you for keeping me informed about the things going on including some of the economic development opportunities that Conway Corporation is in the middle of that help my district, my constituents. No offense to the rest of you, but I know a lot about his, so I can ask him more questions.
I'm sure that Mr. Rice, Representative Ladyman, can load you up on him just as easily. Well,
we're going to do that, and
we want everyone to have this. But, Brett, I'm going to hit
you with the same question I asked Mr. Haston. And was Conway Corporation consulted prior to entering into the consent decree? I think the way Mr. Hastings
Speaker 259
2:04:28
characterized it is my recollection of that process as well. So you were informed?
Correct. Okay. And before I even move off that, I might as well ask the others if you would, Mr. Rice, respond. I would
informed. Okay. And I don't know your relationship, Mr. Atkins, but with West Memphis, were you all also part of that agreement then? So I guess if you want to concur with them, then we'll just move on to the next question. Okay, fine. Well, we've cleared that out then.
Now that I've played favorites with my homie, I will now go from – I'll just keep that order in. And, Mr. Carroll, could you tell us where your organization, of course, being in partnership on Newark Station with the co-ops, again, and I also, again, as I said, I know what it's like to be a minority partner in a business. But can you say where Conway Corporation is on the futures
and if there's any different perspective than what Mr. Haston had shared with us?
Speaker 259
2:05:41
Yeah, I'd be glad to address that. You know, I guess one of the things that I've learned, this is the first time I've heard a discussion about divorce proceedings. So I think what I've learned is that we're the kids. Y'all are the kids. And we're going to be living with a new parent going forward. It's really the kind of way that I think about that. But we've had a great relationship with all the other co-owners. I would agree with Mr. Casperry's characterization of the discussion and the way we've worked through this contract. It's been very collaborative. and we've, I think, worked out a solution that's going to be best for all of our customers.
But our plans are to be a minority owner in this natural gas plant in Independence. And so we're excited about that. The reasons and logic that made sense for us 45 years ago to be a co-owner makes sense for us today. And so we're a load-serving entity, and we're extremely incented to make sure we provide reliable, low-cost electricity to our customers. And that's our plan,
Speaker 264
2:06:42
and we're excited about the future that we have there.
I would be remiss if I didn't mention
the Fortune, the way it was described, the Fortune 25 data center that was planned for Conway. uh does the foreseeable future of being able to meet that need plus the other growth of the community that you serve uh does it is the prospect good in that regard or is there any challenges that we need to be aware of no i think the process prospect
Speaker 259
2:07:14
is good i do believe that you know the the bill that was passed this year the strategic investment bill is really going to
position arkansas well for all the the increase in low demand that's coming and so so i'm not concerned we're planning for that working together uh to make that to make that transaction occur and so obviously there's there's work that needs to be done but uh but i'm i'm confident that we can that we can do that okay thank you and i should say there's been a lot of discussion about nuclear my first job out of college was at arkansas nuclear one so i don't know if that gives me any street cred or not but but that's where i that's where i started my career so having those nuclear plants in uh in the arkansas portfolio is extremely important so i'm glad that there's plans to
continue to run them for the years to come okay thank you mr carroll mr rice just
turn it over to you and and i'll i'll kind of lean on representative ladyman if he's got some local questions to ask you but just uh i assume that uh jonesborough is uh also comfortable with your partnership with the co-ops and working together on on your projected needs yes sir we've been working
Speaker 266
2:08:21
on this for about 18 to 24 months it's been a great process we do feel like we've landed in a place that we're happy and we're in a position to serve our customers and
protect them with this new baseload gas resource just just like our
Speaker 267
2:08:34
coal plants have for the last four decades so very pleased to be where we're at today okay
Representative Randy Torres
Unverified
2:08:42
well first off uh jake let me thank you for having some of the lowest electricity in the state i'll use city water and light and it's that's a very good deal uh but and this might be for everybody
Representative Jack Ladyman
Unverified
2:08:55
uh i know i think jake you all have your own power source in addition to owning part of the plant over in newark i don't know exactly
how much i think you've got some lm units there in jonesborough yes sir would you like me to speak to that yeah
i'd like you to speak that and y'all too if you could on you have extra capacity is that going to help
Speaker 266
2:09:16
you be safe and keep your rates down so we are just thinking about what Mr. Castleberry said with Intergy. Intergy said they like to own their generation and serve their customers. We like to own our generation and serve our customers. We don't want them to be served somewhere else. So we believe in all of the above approach. We have solar. We have solar
in Jonesboro. We have a long-term power purchase agreement with solar. We have a hydropower arrangement. We have the local peaking gas turbines that you mentioned, Representative ladenmen they're critical to our customers they provide very valuable capacity for our customers they're paid for we're very appreciative for that so we have 175 megawatts they would they will cover our average load so very pleased to have those our peak loads about 312 megawatts
we have 251 megawatts of coal that we're losing and that is what's kept our that that has kept our rates down and our service reliable. That's the reason that we've got Nestle in Jonesboro, Post, Frito-Lay, Unilever, NicePak, customers like that. And again, we believe that this gas plant is going to fall right in where the coal plant's leaving off, and we'll do the same thing that the coal plants have done. So the same question
Representative Jack Ladyman
Unverified
2:10:31
that Conway Corp answered about do you have extra capacity if we have a data center or something like that coming in? Where do we stand
Speaker 266
2:10:39
there in dunsboro i think the way i would answer that is we are well positioned to serve future industrial prospects you know we have the large industrial park ctp south we're positioned well to serve that in terms of a large data center there's probably better places to serve that we probably could do an arrangement maybe that like conway's done i think i've read in in articles that they're serving the distribution low we could certainly do something like that but But the 800,000 megawatts, yeah, that's probably not best for us.
Speaker 259
2:11:14
Yes, sir. And just to clarify, we're not serving that high voltage either. That's going to be Intergy is planning to serve that. But the distribution load, we plan to serve. So you have your own capacity? We do. Our ownership interests in White Bluff and Independence have been what we've relied on the past 45 years. We don't have our situations different than Jonesboro. We don't have some of the peaking plants that they have. We do have a 95-megawatt solar facility. We do not own it, but we have the exclusive, all the output from that plant.
95 megawatts is what we have from that solar plant, and that was brought online a couple years ago, and that's been very beneficial to us, especially during the summer
Speaker 272
2:11:58
months. What about West Memphis? Hi, thank you for having me. I would concur with what both Brett and Jake said. We're a much smaller utility, So we're reliant on our ownership interest in White Bluff and independence ACC has been an incredible partner to us And it really has helped us to provide some of the lowest rates in Arkansas That's where our priority is
And entering into the new plant will enable us to do that for the next 50 years
Representative Randy Torres
Unverified
2:12:23
One other thing Jake, you mentioned hydropower I know you all have some I think Paragool does too What about hydropower? That's not talked about very much is there any uh growth in that area at all or what about hydro so the hydropower that
Speaker 266
2:12:39
we're involved in southwestern power administration there's a finite amount of that we're a preference customer we've been a preference customer since the early 60s i don't think there's any more of
that to go around so we're we're fortunate to be
a part of that let me say that i was had a friend call me and tell me that i can't get to my boat at eden isle because the water is so high and Greer's Ferry Lake right now so maybe you should tell them to uh I see you nodding can we uh so they need to open the generators up and start generating it uh at uh Greer's Ferry and maybe it'll bring the lake down plus it maybe lower your your per kilowatt hour cost on that that
would make us happy we don't want to flood the farmers on the White River but uh be that as it may it's uh that is good now now brett as i recall now there is no hydro at toadsuck is that correct that's correct so but many years ago i hate to say
this probably 40 years ago north of the rock retrofitted uh hydro plant at murray lock and dam uh and as we learned at the time it would have and great if when the McClellan-Kerr
system was built that every one of them had generated capacity,
but I presume that it's probably cost prohibitive per megawatt hour to be able to go backwards on either Toad Sucker or any of the others on the Arkansas River at
Speaker 278
2:14:10
this point. Am I seeing that correctly?
Speaker 259
2:14:13
I think so. We have done some studies in the past, but the studies indicated that that sort of retrofit would not
be cost-effective. It would have been nice to
put them in when we built the dams. You know, hindsight, of course, is 20-20, and I was told that when they looked at it, the output wasn't really feasible
because, of course, you know, every other source of energy was so cheap. And, of course, we learned that those things are fluid and they change. there uh any committee questions for our municipal power people representative ladyman anything more uh no i really
don't have any more questions but i
Representative Jack Ladyman
Unverified
2:14:54
really appreciate you all being here it was short notice very short notice and i appreciate y'all coming great can i
Speaker 266
2:15:02
say one thing yes sir i think we'd be remiss if we did not thank representative ladyman and the joint
committee today on your action on nuclear power. We are interested in nuclear power. We are keeping our eyes on nuclear power. As was presented here today, just the cost is too high today. We need the production to come along. We need the cost to come down. And I think our hope is, is we can transition into nuclear in the future. But we want to thank you for your efforts today. Well, I appreciate
Representative Randy Torres
Unverified
2:15:31
that. And you make me think about a question that you all might be interested in. I mean, you know, there's also a thing called micro units that are very small.
And, you know, utilities the size that you all are might be able to benefit from that. If you have an outlying area, Jake, like way outside on the edge of town, I mean, is that something that you all think about or have
Speaker 266
2:15:55
looked at, or is it a possibility? I think we are keeping our eyes on everything, and we have to think about costs, and we have to do it when it's right. That's the reason that we have the Frito-Lays and the Nestle's. We just have to watch those costs. And what we're hearing, that the power costs are multiples of what our power costs are now.
But we are keeping our eyes on that. And when the time is right, we want to be in a position to strike on those as well. And we appreciate
Speaker 259
2:16:25
your action today. Yeah, one thing I would just add to that, you know, Jake mentioned earlier an all-the-above approach, and that's certainly the way we feel as well. So we are collectively doing an integrated resource plan. Entrancey talked about theirs. The co-ops talked about theirs, and we're doing one as well. And that will certainly give us good direction about the resources we need to plan for to deal with this load that's coming down the lane.
So we're planning in that regard as well. I just
wanted to make you aware of that. Well, gentlemen, I just want to say thank you for coming. And also remember that working on these issues is a two-way street. we appreciate you at my behest joining us but also feel free to contact me or any member of our committee if you have ideas or things that we need to do i'm i appreciate what you said about our our initiatives as a nuclear power arena i think we've got to get out in front of this we can't wait until you know you it's like you know used to you know my great great grandmother
had a kerosene lamp well you had to have kerosene in it because that time's going to come you're going to need to light it. And we have to be planning way, way ahead. And I'm hoping things can fall into place that expedite the whole approval process for not just nuclear, but for all power plants. I think that the bureaucrats are the problem, or in President Reagan's words, government is not the solution to the problem, it is the problem. And if we can turn loose the entrepreneurship and the technology of American companies, I believe that we can solve a whole
out of these problems keep our energy costs low for for our constituents so thank you all and is there anything else needs to come before the committee if not we're adjourned thank you
Agenda
A. Call to Order
B. Consideration of a Motion to Authorize Co-Chairs to Approve Special Expenses Incurred by the Committee
C. Consideration to Approve the Minutes from the October 22, 2024, Meeting [Exhibit C]
D. Discussion of Act 707 of 2025 – To Create a Technical Feasibility Study on New Nuclear Energy Generation [Exhibit D]
E. Discussion of Disposition of the White Bluff and Independence Generating Stations
F. Discussion of House Concurrent Resolution HCR1009 – To Advance the Study of Nuclear Fuel Recycling
G. Other Business
H. Adjournment
Documents
Speakers
Senator Mark Johnson Chair
Unverified
Representative Jack Ladyman
Unverified
Speaker 33
Speaker 41
Speaker 34
Senator Matt McKee
Unverified
Representative Rick Beck
Unverified
Speaker 86
Speaker 89
Representative David Whitaker
Unverified
Representative Denise Garner
Unverified
Speaker 99
Speaker 110
Senator Clint Penzo
Unverified
Representative Jason Nazarenko
Unverified
Representative Randy Torres
Unverified
Speaker 137
Speaker 142
Chair
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Representative Richard McGrew
Unverified
Speaker 157
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Speaker 68
Representative Steve Unger
Unverified
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