West Memphis, Entergy sign off on agreement

West Memphis, Entergy sign off on agreement

City will relinquish utility rights to site to foster economic growth

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An agreement to cede some electrical service territory to Entergy was passed by West Memphis City Council during its final March session. Council members heard Economic Development Executive Director Phillip Sorrell present the idea that had been already been recommended by the utilities commission.

The area is an 1,800-acre site in the remote northwest part of the city with Interstate 40 frontage along the south edge and running north to Highway 64 along the east side of Highway 147 north of Lehi. There are now no city utility services in the area. Sorrell saw the advantages in promoting the location with high visibility along Interstate 40 frontage.

“We are partnering with Entergy to market the site for a Mega-site for large industry,” said Sorrell. “The primary reason for this is because Entergy has a program called Select Site.

They do a lot of economic development work. By doing business with them, they bring a lot of resources to the table to help us market the site that we can’t replicate. It potentially helps us take property out there that has not been an attractive industrial marketing site and turn it into something that could be quite valuable for the community.”

The Entergy Select Site status saves the city some expenses in making the site shovel ready for a new project. Soil inspections and environmental studies are completed and certified as officially ready to develop. This may eliminate guess work from prospective business interests and may expedite real estate transactions by having feasibility

studies and preliminary site work certifications

on the books.

“We’re saving ourselves about $50,000 on getting the site certified and in my opinion it exponentially increases our chances for success by having them as a marketing partner,” said Sorrell. “We have some Interstate frontage and some attributes that work well for us here. Facilities now like visibility and Interstate access, which we have along I-40.”

The Arkansas Economic Development Commission has encouraged city officials

to lock arms with Entergy to amp up interest for

any heavy industrial prospect. The AEDC, in part, strives to increase capital investment and jobs in the state.

“The state is behind us and supports this,” said Sorrell.

“We see it as a win-win.”

The area is in the remote northwest corner of the city and no city utilities services are currently available on the farmland.

“It is remote from our existing facilities,” said Sorrell. “It would be costly to extend electrical services out there. Particularly if it becomes a large 75 MW or larger facility, which is what we are targeting.”

Sorrell, Utilities General Manager Todd Pedersen, and Mayor Bill Johnson told city council that the power load required by a big industry was beyond the development capabilities of the city utility and could easily require more electricity than it takes to run the whole city now.

“I know we are giving up the area as far as electrical service but you can’t loose something you don’t already have and right now we do not have existing homes taking services out there,” said Sorrell.

Pedersen brought a perspective and compared electric demand from a million square foot distribution center like Family Dollar saying it uses about three MW, while the whole city supply amounts to about 90 MW. He said not only would it be to daunting for the city to develop the electric infra structure, but it would be beyond the capabilities for the city to fix it should something go wrong and offered his opinion that Entergy would be better suited to develop and deliver the power supply for big industry.

“Typically these large sites have transmission line voltage of 69 kV or above,” said Pedersen. “Everything we do in the city is medium voltage. We do not have the personnel staffing or the equipment to maintain that.”

“To put it in simple facts, potentially there could be something as large as three times our city usage,” said Johnson. “You may get something out there with 200 MW and just to be honest, were are not capable of handling it.”

Mayor Johnson hoped for a direct revenue stream even in ceded the electric territory.

“Phillip and I talked about asking for a franchise fee, and see if we can’t get a little of the revenue back,” said Johnson.

“We’ve talked with Entergy about this as well,” said Sorrell.

City Council voted unanimously to enter a Memorandum of Understanding to reassign the territory.

The agreement would be made pending state approval.

“You’ve passed it. I’ll sign it,” declared the mayor.

By John Rech