Electric utility bill moves out of committee UPDATE | Arkansas Blog

Wednesday, March 9, 2011

Electric utility bill moves out of committee UPDATE

Posted By on Wed, Mar 9, 2011 at 1:23 PM

Though the final legislation is still a work in progress, a House committee today speedily approved the SWEPCO/Arkansas Electric Co-op bill originally drafted to retroactively put a stop to judicial review of the Turk power plant in Hempstead County. Gov. Mike Beebe objected and the bill is being redrawn.

Opponents still object to the bill. Some notes from that side are on the jump.

I'd still like to know why the PSC sat down and participated in drafting a bill mostly written by and for utilties the PSC regulates. Seems like a conflict of interest to me. I sent a series of questions to the PSC about this yesterday. No response.

The best question posed on the jump is this: If this bill is NOT about the Turk plant, what's the rush to jam something through?

UPDATE: The Sierra Club, too, has added its objections to the revised bill. Read on.

NOTES FROM SWEPCO BILL CRITIC


HB1895 passed with discussion limited to 10 minutes for each side, despite at least 10 people sitting there who had waited for almost 2 hours to speak in opposition.

Even with Governor Beebe’s changes, the proposed legislation remains an invitation to expensive mischief by national companies at the expense of Arkansas’s ratepayers. Ratepayers? Who are they? I did not hear the word used once this morning in discussions about these major changes to how the PSC reviews power plant need and siting.

The bill (we still have not seen the amended bill) we expect would harm Arkansas’s ratepayers in the following ways:

1. HB1895 allows “need” for a particular power plant to be based on an earlier, separate “declaration-of-need” proceeding.

Ironically, those types of proceedings initially were intended primarily to force utility companies to carefully assess alternatives to power plants (such as the abundant merchant generation already located in Arkansas, or the energy efficiency programs so long delayed here).

The proposed legislation will re-write the law so that the resource planning process will, instead of protecting ratepayers, actually speed up power plant approvals. Elsewhere around the country, the process is used to protect ratepayers and diversify utility resources (alternatives to building power plants).

Ratepayers deserve a careful review of alternatives before committing to an enormously expensive plant.

2. The waiver provisions contained in the proposed legislation (amended 23-18-511) allow our public utilities to seek extensive and costly review by our state agencies, and then to disavow the process if market conditions or any other change of circumstance better advantages the company.

The fact that the utility would be able to bail out at any time will undermine any substantive review—indeed, render it pointless, but will cost state agencies resources and personnel time. The waiver provisions address a key question that is before the Arkansas Supreme Court at this moment in the SWEPCO Hunt Club case. Any legislation passed at this point cannot help but influence the court’s decision.

3. Hb 1895 puts determining the power plants under
23-18-106, the resource planning statute.

Normally, the burden is on the power company to prove that it's costs
are prudent before raising rates.

But 23-18-106 says that, if a plant is built under an approved
resource plan, there is a rebuttable presumption that the costs are reasonable and prudent. Because of this, the burden is shifted to the public to prove that cost over runs. Turk plant costs are currently over $400M.

HB 1895 if enacted, would send a message, that in Arkansas, 25 years after Grand Gulf, whenever our utilities’ national parent companies reach a point in their development that they want to build another multi-billion-dollar plant, the state government is powerless to stop them.

If this legislation is not about the Turk plant, why are we rushing to pass it? Arkansas ratepayers deserve better.

FROM THE SIERRA CLUB

Today HB 1895, as amended, cleared the Insurance and Commerce Committee. The bill, which just passed out of the House Committee, would create far reaching changes to existing law, and would affect issues currently under litigation.

Lev Guter, associate field organizer stated, “Today, the House Committee passed a bill that will make it easier for dirty coal plants, now and in the future, to get approval. This bill severely limits the rights of Arkansans to speak out and protect our air and water quality. We urge the full legislature to oppose this bill and place our public health over the interests of powerful coal utilities.”

The Sierra Club will continue to oppose the bill, and will monitor and speak out against the bill in both the House and the Senate. The bill has troubling language in several areas, including—counter to current law and a unanimous decision of the Arkansas Supreme Court—separating the utility permitting process into multiple portions rather than one unified proceeding. Additionally, HB 1895 will allow utilities the ability to apply for a PSC permit and then, if denied, bypass the PSC entirely—exactly the issue that is currently being litigated before the Arkansas Supreme Court with regard to SWEPCO’s Turk power plant.

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