Alabama Municipal Electric Authority’s solar power research, aided by a project in Dothan, will soon pay dividends to its customers.
AMEA announced a major solar power project agreement with Lighthouse BP, a subsidiary of British Petroleum, on Wednesday. AMEA provides power to 11 Alabama municipal utilities – including Dothan Utilities – and the deal could save AMEA’s customers $40 million during the 20-year deal, said Fred Clark, AMEA president and CEO.
An 800-acre solar farm containing 350,000 solar panels in rural Montgomery County serves as the foundation of the deal. Lighthouse BP will fund the construction of the solar farm, and AMEA agrees to buy all the power it produces for a 20-year period once the farm is online in 2022, Clark noted.
The farm is expected to generate 100 megawatts of power, equating to about 245,000 megawatt-hours of power annually, according to an AMEA document.
Clark said the project provides benefits to AMEA customers in a couple of different ways. First it ensures AMEA has options for low-cost power if market conditions change in the next few years.
“Our industry is moving toward more natural gas (for electricity production),” he said, noting that could cause natural gas and power prices to increase. “This places a hedge against natural gas prices. Coal usually follows natural gas prices, too.”
Dothan Utilities electrical operations superintendent Chris Phillips said if market conditions continue to improve, DU customers will see a benefit in the “power cost adjustment” portion of the bill. The power cost adjustment, which takes into account fuel prices, could fall into the negative – results in credits to DU customers.
Clark said the deal also provides economic development officials another tool they can use in recruiting businesses to their member cities. He noted several companies seek locations where they can obtain some renewable, “or green,” energy from that state.
AMEA has been studying the viability of solar power in Alabama, one of the wettest states in America, for about 10 years. AMEA even funded small-scale solar farm research areas in its member cities, and one of the first projects installed was at Westgate Park in 2017.
Clark said the research – combined with a 30-percent federal tax credit for investing in solar projects and the lower costs of solar powers – indicates large-scale projects like the Montgomery County initiative viable in Alabama.