The state Public Service Commission has approved the latest version of a settlement of an Entergy rate increase. It slightly reduces the impact of the rate increase for residential customers against an original settlement reached by the company, major industrial users, the attorney general's office and others.
Rates will still be going up, though, paradoxically, they'll decline this summer because of the currently lower cost of generating fuel. Fuel is not part of the rate base.
Arkansas Public Service Commission Approves
Revised Settlement Agreement In Entergy Rate Case
(Little Rock) –The Arkansas Public Service Commission (Commission) has approved a Revised Settlement Agreement (Revised Agreement) in the Entergy Arkansas, Inc. (EAI) rate case. The new rates will be effective for all customer bills rendered on or after June 30, 2010, for the first billing cycle of July 2010.
On September 4, 2010, EAI filed an application with the Commission seeking an increase in its non-fuel revenue rates in the amount of approximately $223.2 million. EAI’s last approved base rate increase was in 1985.
Since 1985, EAI has made additional investment in utility generation and transmission and distribution facilities, in additional to experiencing significant storm restoration costs and increased operating and maintenance expenses.
After months of discovery and litigation, some parties to EAI’s rate case reached an initial Settlement Agreement which was filed for consideration by the Commission on May 10th. The initial Settlement Agreement was disapproved by the Commission in an Order issued on May 20th.
Subsequently, on May 25, a Revised Agreement was filed, which was signed and approved by all parties to the case. The parties to EAI’s rate case – in addition to EAI – are the General Staff of the Commission, the Attorney General of Arkansas, Wal-Mart and Sam’s West, the Arkansas Electric Energy Consumers, the National Audubon Society and Audubon Arkansas, Federal Executive Agencies, the University of Arkansas System, the Kroger Company, and Hino Motors Manufacturing U.S.A., Inc. The Revised Agreement resolved the three issues that were the basis for the Commission’s disapproval of the original Settlement Agreement.
The Revised Agreement calls for an increase in non-fuel base rates of $73.8 million, some $149.4 million less than the increase originally sought by EAI. The Agreement, as revised, addresses cost allocation concerns raised in the Commission’s May 20th Order, and results in a new non-residential deposit requirement policy that allows Entergy to exercise discretion in requiring deposits for new and expanding businesses. The Revised Agreement also addresses objections made by Hino in the rate case related to a tariff under which Hino takes service from EAI and that concerned additional facility investments made by EAI when Hino opened its plant in Arkansas.
The Commission conducted public hearings on EAI’s requested rate increase on May 4, 2010, in El Dorado and on May 6, 2010, in Batesville. In addition, the Commission took public comments at both evidentiary hearings in the case held on May 19, and May 27, 2010, in Commission Hearing Room 1 at its Little Rock office.
EAI provides service to approximately 687,000 Arkansas retail customers in 63 of Arkansas’s 75 counties. EAI is headquartered in Little Rock, Arkansas.