LaGrange, Georgia, negotiating solar power deal with local Walmart store
December 21, 2020
by Peter Maloney
December 21, 2020
The city council of LaGrange recently authorized the city’s utility to sign agreements that would allow the Georgia city to offer renewable power to the local Walmart store.
Walmart has a goal to serve at least 50% of their stores nationwide with renewable power by 2025 and 100% by 2035.
Buying renewable solar power through the city allows Walmart to realize better prices and keeps revenues from one of the city’s largest customers in the local economy, Patrick Bowie, the city’s director of utilities, said.
Walmart provides the city with about $1.3 million in annual revenues.
The solar power purchase will require multiple agreements, which are still under negotiation. “We are trying to finalize them by year end,” Bowie said.
As a member of the Municipal Electricity Authority of Georgia, LaGrange relies on MEAG Power for its generation and transmission resources. For actual power sales, the city uses The Energy Authority.
MEAG Power is in the process of wrapping up negotiations with the developer of a large solar power project in southern Georgia. LaGrange, meanwhile, is finalizing a deal with Walmart for sales of solar power that will be matched by a back-to-back purchase agreement for a portion of the output from the solar project with which MEAG is contracting. It would be MEAG Power’s first participation in a solar power project.
Walmart’s electrical load in LaGrange is between 17 million and 18 million kilowatt hours (kWh) per year, which would require between 5.5 megawatts (MW) and 6 MW of capacity.
The deal is complicated by the fact that LaGrange currently has excess power and that Walmart’s load does not synch up with intermittent solar output. To protect itself from purchasing more power than it needs or paying more for solar power than it pays for its conventional power, LaGrange is negotiating a sales agreement with Walmart under which the retailer would be responsible for the difference between the cost of solar and the cost of wholesale power the city buys from The Energy Authority. If solar power is more expensive, Walmart would absorb that cost. If solar power is less expensive, Walmart would benefit from the lower costs.
LaGrange is also signing an agreement with Electric Cities of Georgia, which provides LaGrange and 51 other public power communities with distribution support services. Under the agreement, Electric Cities of Georgia would provide LaGrange with the billing services to balance the books on power sales between LaGrange and Walmart.
To help mitigate the risks associated with the solar sales, Walmart would be able to shift power sales to its other retail locations in Georgia.
One of the details that still needs to be worked in the negotiations is to see what level of participation other cities want in the solar power deal, Bowie said.
LaGrange is an industrial center, but so far none of the city’s other large commercial customers have requested renewable power. It is hard for solar power to compete with the city’s current low power rates, Bowie said.