Entergy asks for 12 percent rate increase for residential customers | Arkansas Blog

Friday, April 24, 2015

Entergy asks for 12 percent rate increase for residential customers

Posted By on Fri, Apr 24, 2015 at 3:30 PM

click to enlarge UNION POWER STATION: Part of rate increase would pay for plant purchase.
  • UNION POWER STATION: Part of rate increase would pay for plant purchase.

Entergy Arkansas
has asked the state Public Service Commission for a $167 million annual electric rate increase to pay for system improvements and purchase the gas-fired Union Power Station near El Dorado.

The increase means a monthly increase in 2016 of about $13 for a customer using 1,000 kilowatt hours. Entergy has 70,000 customers in 63 Arkansas counties. That's a rate increase of more than 12 percent. Entergy Arkansas's website said, including all costs, 1000 kwh now costs $102.28, not counting state and local taxes.

Entergy says the improvements it's seeking to have customers finance through bills are needed for economic development and modernization. 

“These investments will not only strengthen our grid but will allow us to leverage the industrialization that is happening in our region and maintain customer rates below the national and regional averages,” said Entergy CEO Hugh McDonald in a prepared release.

I don't know yet about some of the facets of rate filings that can become contested, such as the rate of return — or profit — that Entergy can make on its investments in the system and also sometimes non-direct expenses sought from customers.

Unknown today, too, is what role the attorney general's office will take in the case. Historically, that office has used its division that specializes in regulated utilities to stake out consumer-oriented positions. Though not always. The previous attorney general,Democrat Dustin McDaniel, won some reductions in past Entergy cases, though he also tended to be friendly to coal-burning power plants. The new attorney general, Leslie Rutledge, is a Republican who campaigned on her dislike for government regulation.

The PSC membership has also changed. Former Republican legisator Ted Thomas, who had experience as a PSC staff member, was named to one opening on the commission by Gov. Asa Hutchinson. A former aide to Gov. Mike Beebe, Lamar Davis, has also joined the commission.

UPDATE: Entergy is indeed seeking a big jump in its return on equity, from 9.5 to 10.2 percent. (You are earning 10 percent on your retirement investments, aren't you?) Entergy says the 10.2 percent is consistent with other utilities.

UPDATE II: From Attorney General Rutledge's spokesman Judd Deere:

“The Attorney General’s Office is reviewing today’s filing and the supporting documents. As this matter moves forward, Attorney General Rutledge will represent all Arkansas ratepayers.”


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