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Entergy Arkansas Reaches Rate Settlement

October 27, 2016 By Cheryl Kaften

Entergy Arkansas and the four parties to its request to increase 2017 electric rates have reached a settlement (Docket No. AR: 16-036-FR) on an uptick of $54.4 million. The utility – the largest in the state, with 705,000 customers in 63 counties – originally had filed for a rate hike of $67.7 million with the state’s Public Service Commission (PSC), according to an October 26 report in the Arkansas Democrat-Gazette.

Entergy, the Public Service Commission’s general staff, the Attorney General’s Office, the advocacy organization Arkansas Electric Energy Consumers, and a group of hospitals and colleges were involved in the settlement.

“All of the parties have agreed that the revenue requirement reflected in Entergy’s last filing should be the level that’s approved by the commission,” John Bethel, executive director of the commission’s general staff said.

Entergy Arkansas’ filing was authorized under a new law that allows the state’s utilities to file an annual rate-adjustment plan. The $54.4 million rate increase reflects an increase of 3.38 percent for each residential customer. That means an Entergy customer with a monthly bill of $100 would begin receiving monthly invoices of $103.38, effective the first billing cycle in January.

However, there is some relief in sight: According to the report in the local news outlet, temporary charges paid by residential customers soon are to expire, effectively reducing bills.

One interim charge will expire before January and another will be reduced, Bethel told the newspaper. With those adjustments, the actual change will be a 0.52 percent decline in a monthly bill, Bethel said. So a residential customer with a $100 bill will have a bill of $99.48 beginning in January.

What’s more, there still could be another adjustment to residential Entergy bills. The utility paid $18.5 million in January to buy four buildings at its Arkansas Nuclear One site. The AG’s office has questioned whether the $18.5 million purchase of the buildings was appropriate, Bethel noted.

“[Entergy Arkansas] has provided sufficient support that the purchase is appropriate and no adjustment to the amount [included in rates] is warranted,” Michael Considine, who testified in the case on behalf of Entergy, said in a filing.

But the parties to the case decided to include the purchase in the current rate increase, subject to a refund to customers in the future, Bethel said; adding that, if it is decided that the purchase isn’t appropriate, it will be addressed in Entergy’s rate-adjustment case next year.

The settlement addressed all the parties’ issues, Laura Landreaux, vice president of Regulatory Affairs for Entergy Arkansas, said in an email to the Democrat-Gazette. The annual rate case is an effective regulatory mechanism for adjusting rates, Landreaux said.

“It also better aligns the time frame in which Entergy Arkansas makes an investment and when customers receive the benefit of the investment,” Landreaux said.

Bethel said he can’t predict whether the commission will approve the settlement or make changes to it. If the commission approves the settlement, a hearing scheduled for November 1 on Entergy’s rates will be canceled.

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