GOING GREEN: LaGrange moves forward on Walmart solar power agreement
Published 7:30 pm Tuesday, December 8, 2020
At its Tuesday night meeting, the LaGrange City Council authorized the city’s utilities to execute an agreement with the Municipal Electric Authority of Georgia (MEAG) and Walmart in order to facilitate Walmart’s goals of transitioning to renewable energy.
The agreement will allow LaGrange to partner with MEAG and other MEAG member cities to purchase solar power from a solar development.
It also enables the city to then sell that solar power to Walmart.
Walmart has a goal to serve at least 50 percent of their stores nationwide with renewable power by 2025 and 100 percent by 2035.
At the council’s Tuesday morning work session, city Utilities Director Patrick Bowie said that Walmart is already working with other utility companies and developers around the country to secure renewable energy contracts.
Walmart is the city’s sixth largest customer — LaGrange sells them about 17-18 million kilowatt hours per year, bringing in about $1.3 million in annual revenue.
That includes power for the Walmart Supercenter on New Franklin Road, the Walmart Neighborhood Market on Lafayette Parkway and the Walmart Distribution Center on Callaway Church Road.
“They’re a large customer of ours, and we really need to try and do what we can to accommodate their needs, if we can do that,” Bowie said.
LaGrange’s utility revenues, coupled with sales taxes, are the main contributors to the general fund and have enabled the city to not levy property taxes since 1998.
A deal between MEAG and a solar development is currently being negotiated, Bowie said.
Bowie prefaced his presentation at the work session by emphasizing Walmart’s status as a major utility customer, saying the city needed to work with the company, lest Walmart decide to pursue other options, such as installing their own panels or lobbying the state to allow them to circumvent utility companies and purchase power directly from the solar developers.
Bowie said Walmart would prefer to work something out with the city, which would lose revenue if Walmart were to pursue another route.
Bowie said that MEAG, a public corporation that provides engineering support, joint purchasing and emergency aid to its member utility companies, would participate in the development of a large solar installation. Several energy developers are putting large solar installations in South Georgia over the next three years, he added. There are also tax credits MEAG can take advantage of.
Those installations should be able to produce about 100 megawatts, Bowie said. To accommodate the needs of Walmart in LaGrange, the city would need to purchase about six megawatts of power. For context, Bowie explained that the solar panel installation installed by The Ray at exit 14 of I-85 produces one megawatt.
The effort would involve getting other MEAG member cities involved to enter the purchase-power agreement with MEAG.
The risks associated with owning the solar installation would thus not be held by LaGrange.
There are a few challenges, however, which led the council’s approval to be subject to several conditions.
Bowie said the city already produces more power than it needs. Additional kilowatt hours brought in from the solar installation would need to be sold off-system to other utility companies.
“The second issue you have to address is that solar power doesn’t match up with Walmart’s load profile,” Bowie said.
“Walmart has a pretty consistent load … it’s pretty steady.”
Solar power generation, however, goes up during sunny days and in summer, but down when there’s less sunlight.
Contract provisions with Walmart will hopefully be written to charge Walmart the same retail rate, while having a separate solar bill based upon the difference between the solar power’s cost and its market rate.
Any profits made by selling off excess solar power the city acquires would also be transferred to Walmart, because they would assume the risk.
“Basically, if the market goes up, they’re going to get a benefit, the market goes down, then they’re going to pay the cost,” Bowie said.
“So, we’re insulating our customers from any risk associated with that work. And we’re insulating the city from that as well.”
Ancillary expenses like transmission costs, scheduling costs and administrative costs would also be rolled into Walmart’s bill.
Another condition to reduce risk will be to make corporate Walmart responsible for all the solar power in the participating cities.
If a store closes in one town, the solar power can be transferred to another store in a different MEAG city, so the local utility isn’t left holding excess solar power.
Bowie said adding solar is also good from a public relations perspective.
“Right now, we don’t have any solar in our portfolio. There is growing political pressure for renewable portfolio standards and other things, so this will allow MEAG to point to some solar power that is now being put in our portfolios,” Bowie said.
Continued economic development in LaGrange means there will eventually be a need for more energy in the city, so this project has the benefit of getting “that solar on the books,” Bowie said.
Mayor Pro Tem Nathan Gaskin asked if the if the program could be expanded in the future to provide solar power to other companies that may want to switch to renewables.
He cited the likelihood that the incoming Biden administration will be friendlier to renewable energy initiatives, which might accelerate energy transition efforts among corporations.
Bowie said it could be expanded, but the city would have to subscribe to additional capacity.
Mayor Jim Thornton said the project would also give the city the ability to bid on other developments.
“If an industry or large commercial development came to town and wanted to be 100 percent solar, right now we would not have the ability to bid on that project, but Georgia Power would, because they have solar capacity,” Thornton said.
Bowie agreed, saying the project would be a “good trial run” for the city, which has no prior experience billing solar power, and a trial run for MEAG, which has no experience with solar.