# APSC Docket 25-055-P — Altitude Capital / Google Special Rate Contract (production overview) **The single most consequential docket in this investigation.** The APSC proceeding on Entergy Arkansas's Application for approval to enter into a Special Rate Contract with **Altitude Capital, LLC (Google subsidiary)** for Google's planned **hyperscale data center in West Memphis, Crittenden County, Arkansas**. Filed 2025-09-05. **This is the docket that contains, in sealed form, the financial terms by which Google contributes to the cost of [[Arkansas Cypress]] and the GAJA Rider's new generation**. The companion proceeding to [[psc/docket-25-055-p-special-contract-2026-05-22/_overview|Cypress CECPN docket 25-054-U]]. ## What's inside (curated subset) Nine filings: - [[25-055-P REDACTED Application]] — Doc. 15, 2025-09-05. The Application itself, **redacted to a single 177-byte page in the public record** (essentially blank). The HSPI version is sealed (Doc. 26). - [[Palmer Direct on the Google SRC]] — Doc. 16, 2025-09-05. **Names Altitude Capital, LLC as Google's subsidiary and Google as the West Memphis hyperscale data center customer.** Cites Cypress Solar specs ($46M sales tax, 700-800 construction workers, 600 MW + 350 MW battery, $9.6M property tax first year). Discusses Google demand flexibility / curtailment commitments. - [[Dalrymple Direct on the Google SRC]] — Doc. 17, 2025-09-05. Overview of SRC terms and benefits to broader customer base. - [[Google SRC Order No. 2 Procedural Schedule]] — Doc. 31, 2025-09-16. Sets evidentiary hearing for 2025-11-17. - [[Google SRC Order No. 4 SRC Suspension]] — Doc. 41, 2025-10-03. The Commission **suspends the Agreement pending final order** (PPR Rule 6(a)). - **[[Google SRC Order No. 5 Cypress Inextricability]]** — Doc. 55, 2025-11-03. Records the **Joint Motion to Submit for Approval** filed by EAL and Staff (with AG non-opposition) with a 9-part stipulation; the Commission **defers cancellation of the hearing given the docket's "inextricability"** with the Cypress CECPN proceeding 25-054-U. - **[[Google SRC Order No. 6 CIAC Questions]]** — Doc. 56, 2025-11-05. **The Commission's pointed questions to EAL and Staff on the Contribution-in-Aid-of-Construction (CIAC) classification of Google's payments**, citing Ark. Code Ann. § 23-4-1304(x)(2)(A) and (B). The Commission asks why transmission payments are classified as CIAC but generation payments are not, and directs eight new RIM-test sensitivities. - [[Google SRC Order No. 7 Hearing Maintained]] — Doc. 64, 2025-11-12. **Denies cancellation of the November 17 hearing.** - [[Google SRC Order No. 8 RIM and MBSA]] — Doc. 68, 2025-11-18. Post-hearing order directing supplemental testimony and revised RIM scenarios using the MBSA assumption (filed by Nov 21; Staff response by Nov 25). ## Key takeaways ### **The customer identification — public for the first time** [[Palmer Direct on the Google SRC|Palmer's direct testimony]] (Doc. 16, p. 2): > "My testimony is presented on behalf of EAL to support the Company's application for approval of a new special rate contract ('SRC' or the 'Agreement') with **Altitude Capital, LLC ('Customer' or for purposes of this filing, 'Google'), a subsidiary of Alphabet, Inc. ('Parent Company').** > > The Agreement is crucial for EAL to provide electricity supply to support Google's establishment of a new, hyperscale data center in the City of West Memphis in Crittenden County, Arkansas..." This is the most explicit identification of Altitude Capital as Google's subsidiary in the public regulatory record. It supersedes the [[Entergy CEO Direct Testimony|CEO testimony in the base rate case]] for the level of detail. ### Cypress Solar / Google financial framework Per [[Palmer Direct on the Google SRC|Palmer]] (Doc. 16) and [[Google SRC Order No. 5 Cypress Inextricability|Order No. 5]] (Doc. 55): - Cypress Solar = 600 MW solar PV + 350 MW BESS — **$46M state sales and use tax during construction**; 700–800 construction workers; **$9.6M property tax first year of operation**. - "**Cypress Solar to add generation to the Company's resource portfolio**." — Cypress is being built specifically to serve Google. - The data center "will be interconnected to EAL's high voltage 500kV grid." - **"Google is incorporating demand flexibility in its operations to assist during times when the grid is constrained**" — Google offers curtailment commitments to mitigate ratepayer impact. - The SRC commits EAL to develop Cypress Solar, and Google to financially support the development through SRC rates. - "Once in service, Cypress Solar will provide energy and capacity to support service to a significant portion of Google's incremental load." - The SRC was filed under Act 373 of 2025 / Rate Schedule 73 (initially called the "Strategic Investment Recovery Rider," then renamed to **GAJA Rider** per [[Cypress Order No. 4 CECPN Approval|Order No. 11 in 25-049-TF]]). ### The Staff-EAL stipulation (9 parts) Per [[Google SRC Order No. 5 Cypress Inextricability|Order No. 5]] (Doc. 55), Staff ([[Regina L. Butler]] direct, Doc 43) recommended approval. The 9-part stipulation: - (a) approve SRC as in public interest - (b) **defer certain revenues to a regulatory liability**, amortized over SRC term - (c) exclude regulatory liability from rate base / WACC until Cypress in service - (d) begin amortizing regulatory liability per Elbe's Exhibit CKE-4 (HSPI) - (e) amortize ITCs over Cypress Solar useful life - (f) flow ITCs to customers via Rate Schedule 73 (GAJA Rider) as offset to revenue requirement - (g) reflect unamortized ITC liability in WACC as zero-cost capital - (h) include amounts paid by Google in Rate Schedule 38 (Energy Cost Recovery Rider) - (i) include amounts paid by Google in Rate Schedule 47 (Capacity Cost Recovery Rider) ### **The CIAC dispute — the Commission's intervention** [[Google SRC Order No. 6 CIAC Questions|Order No. 6]] (Doc. 56) is **the most substantively important document in this docket** because it shows the Commission challenging EAL's and Staff's stipulation. The Commission cites Ark. Code Ann. § 23-4-1304(x)(2)(A) (CIAC payments must be deducted from strategic-investment costs recovered through rates) and (x)(2)(B) (other-form payments shall be recognized over the life of strategic investments). The Commission asks: - **Why is transmission classified as CIAC (100% Google) but generation NOT?** Per Hunt's direct, Google pays 100% of transmission construction costs as CIAC, but Google's generation-related payments are NOT classified as CIAC — instead they're "payments for electric service that... exceed the rates Google would otherwise pay under the Large General Service rate schedule during its ramp period." - "**How can these payments be considered 'for electric service' before Google's West Memphis data center is constructed and in service?**" The Commission challenges the very premise. - "**Distinguish a payment to 'financially support the development' of a project from a contribution in aid of the construction of a project?**" The Commission challenges the line EAL drew. - **The Commission directs EAL to model 8 RIM sensitivities** — Maximum Contract Demand vs Minimum Bill Demand × with/without ITCs × CIAC-10yr-amortization vs other-form-over-Cypress-life. - Question 4: "**Please describe the analysis conducted by EAL to determine the percentage of Google's data center load to be served by Cypress Solar?**" The Commission pushing for the precise load-allocation question. The classification matters because it determines whether the rate base flowing into the GAJA Rider is full Cypress cost (Google pays back as offset revenue over the life) or full Cypress cost minus Google's CIAC contribution (smaller rate base, smaller GAJA Rider charge to other ratepayers). **The difference is the entire "$1.7B savings" claim's mechanism.** ### What's known / what's sealed - The SRC term ("Effective Date" and "Initial Term") is **sealed**. - The Google payment amounts and rates are **sealed** (Elbe Exhibit CKE-4, Hunt Direct, etc.). - The Cypress percentage allocation to Google is **sealed**. - The RIM Test results are sealed (Elbe Exhibit CKE-2). - The termination-fee provision is sealed (Dalrymple Direct at p. 15). - BUT: the structure of the deal, the names of the parties, the procedural posture, and the **Commission's specific challenges** are public. ### Procedural outcome - Hearing held 2025-11-17 ([[Google SRC Order No. 7 Hearing Maintained|Order No. 7]] denied EAL/Staff's motion to cancel). - Post-hearing Order No. 8 (2025-11-18) directs supplemental testimony / revised RIM with MBSA assumption. - Final disposition not yet ingested. The companion Cypress CECPN was approved 2026-03-03 (per [[Cypress Order No. 4 CECPN Approval]]). ## People and orgs mentioned - [[Entergy Arkansas]] — applicant - [[Altitude Capital, LLC]] / [[Google LLC]] / Alphabet, Inc. — the SRC customer - [[Arkansas Public Service Commission]] — decisional authority - [[J. David Palmer]] — direct testimony lead; signed certificate of service - [[Kristin Dalrymple]] — VP Business Operations and Strategy (overview of SRC terms) - [[Crystal K. Elbe]] — Senior Manager, Large Customer Pricing (rate design, RIM test) - [[David E. Hunt]] — Senior Manager, Regulatory Policy (deferred revenue regulatory-liability treatment, CIAC characterization) - [[Patrick J. Stack]] — Corporate Controller (accounting treatment, ITC federal tax credits) - Regina L. Butler — Director, Electric Section (APSC General Staff) — recommended approval - [[APSC General Staff]] / [[Office of the Arkansas Attorney General]] (no opposition) ## Concepts invoked - [[Special rate contract]] — the deal form - [[Strategic Investment]] — Cypress Solar's classification - [[Generating Arkansas Jobs Act (GAJA) rider]] (Rate Schedule 73) - Contribution in Aid of Construction (CIAC) — Ark. Code Ann. § 23-4-1304(x)(2)(A) - Other form of payment — § 23-4-1304(x)(2)(B) - Ratepayer Impact Measure (RIM) Test — required for SRCs under PPRs - Promotional Practice Rules (PPRs) - Investment Tax Credits (ITCs) for Cypress Solar assets - Rate Schedule 38 (Energy Cost Recovery Rider), Rate Schedule 47 (Capacity Cost Recovery Rider) — vehicles for routing Google's payments back to other customers ## Cross-references - [[psc/docket-25-055-p-special-contract-2026-05-22/_overview|Docket 25-054-U Cypress CECPN]] — the companion proceeding - [[Altitude Capital, LLC]] — the customer page (updated this session) - [[Arkansas Cypress]] — the generation resource - [[Generating Arkansas Jobs Act (GAJA) rider]] - [[Entergy CEO Direct Testimony]] — the earlier corpus reference to the Altitude Capital agreement ## Open questions / follow-ups - The **final order on the SRC** — not yet ingested. - **The eight RIM sensitivities** directed by Order No. 6 — EAL's supplemental testimony was filed; not retrieved. - The Commission's ultimate ruling on the CIAC classification — the most consequential ratemaking question in the docket. - The Effective Date / Initial Term / payment amounts — sealed and would require a § 25-19-105(f)(3) appeal to challenge the seal. - The **Hybar parallel** (Docket 23-025-P) — public-record SRC for context.