Entergy sets out US$600M Google-backed Arkansas grid expansion

In 2028, battery systems totalling 1,400 megawatt-hours are expected online under an expanded Google power agreement that Entergy Corporation NYSEETR announced on Monday. Google will cover approximately US$600 million in planned infrastructure investment plus a solar power purchase agreement, according to Entergy's Oct. 19 release. Google will pay the full resource costs under a 20-year contract.

Google, part of Alphabet Inc. NASDAQGOOGL NASDAQGOOG, confirmed on Monday that it is investing with Entergy Arkansas in new energy and grid infrastructure. Entergy Arkansas supplies electricity in the state and says the resources will serve its broader customer base.

Entergy estimates the second phase will deliver at least US$500 million in customer savings over 20 years, starting in 2028. The expansion remains subject to Arkansas Public Service Commission approval.

Entergy shares NYSEETR closed at US$103.80, down 1.25 per cent, on the New York Stock Exchange at 4 p.m. EDT on Oct. 19.

The investment supports additional data centre buildings at Google's West Memphis campus and a faster ramp-up of the original development. Entergy says the new contract puts the resource costs on Google, and the new resources will not be charged through the Generating Arkansas Jobs Act Rider.

Including the original West Memphis agreement, Entergy's Oct. 19 estimate is US$2.1 billion in net benefits to help cover shared fixed costs. The utility says customers' bills will be lower than they would otherwise be because Google contributes toward those existing costs.

"Google will be paying the full cost of the resources needed to support the additional service provided by Entergy Arkansas through the 20-year term of its contract," Entergy said in the release.

Arkansas Approval Precedes The 2028 Service Target

The planned additions include a 1,000-megawatt-hour battery at Driver Solar near Osceola and a 400-megawatt-hour battery near Hot Springs at Jones Mill. Both are expected online in 2028, making that the operating milestone for the new storage.

The package also includes a 440-megawatt AC purchase agreement from Big Island, a solar facility under construction in Mississippi County as of Monday's announcement. Entergy says that agreement was added following commission guidance on the initial resource filing.

The transmission work includes expansion of the Galet substation near West Memphis and two new 230-kilovolt lines serving the expanded campus. Entergy puts the expansion's expected in-service date in 2028, pending approval.

Entergy says the contract's provisions will be available to the commission, its staff and the Arkansas attorney general during regulatory review. Its planned filing will follow commission recommendations aimed at making the customer benefits more visible.

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In Wyoming, Black Hills Corp. NYSEBKH said on Oct. 6 that its separate Cheyenne agreements with Google run through 2048 and provide for full recovery of generation capital investment over the contract term.

Black Hills expects returns on generation investment and microgrid management fees to begin contributing to earnings in 2027. It forecasts approximately US$150 million in net income from that arrangement in 2030, under its separate Wyoming service model.

For Arkansas, Entergy's next step is submitting the expansion for commission approval. The announced operating target remains 2028, with the batteries and wider expansion dependent on that approval.