Entergy Arkansas’ residential customers will feel a few extra bucks in their pockets, thanks to a rate drop of nearly 5% that takes effect April 1.
As a regulated utility, Entergy Arkansas files a “fuel and purchased power cost” adjustment, or rider, each spring with the Arkansas Public Service Commission. This rider on customer bills is the means by which Entergy Arkansas recovers the costs of fuel used in power plants and power purchased from other sources.
The current bill for a typical residential customer using 1,000 kWh of electricity is $101.31, excluding taxes. After the rider is reduced during the first April billing cycle, that same customer’s bill will be $96.50, a reduction of 4.75%. The new rate will be effective from April 2013 through March 2014.
“We’re pleased to be able to announce a rate reduction. Every little bit helps, and 4.75% is more than a little,” said Entergy Arkansas President and CEO Hugh McDonald. “This lower rate has a lot to do with Arkansas Nuclear One,” McDonald added. “Arkansans are truly fortunate to have that plant generating a good share of our power.”
The reduction in the rider is attributable to several factors:
- Entergy Arkansas’ nuclear sources, Arkansas Nuclear One and Grand Gulf, will experience less down time in 2013 compared to the refueling outages necessary in 2012. Therefore, the company will be less reliant on more expensive sources of energy.
- Compared to 2011, in 2012, Entergy Arkansas generated more power with nuclear and gas-fired generation and less with coal, which reduced costs. The company also purchased slightly less energy in 2012. What was purchased in 2012 was at a lower price than in the previous year.
- A portion of the output of Arkansas Nuclear One that had been excluded from base rates has now been allowed by the Arkansas Public Service Commission to be included in base rates. Fuel cost savings for the reallocated portion of ANO are included in the April 1 fuel and purchased power rider rate adjustment.
- Entergy Arkansas collected in rates more than its actual fuel and purchased power costs in 2012. This is the reason for the annual adjustment, to true up cost forecasts with actual expenses.
Entergy Arkansas, which celebrates its 100th birthday this year, provides electricity to about 700,000 customers in 63 counties in the state.