PSC to hear testimony on proposal settlement of Entergy Arkansas rate request

The Public Service Commission on Friday approved a request by Entergy Arkansas Inc. and intervenors in the utility giant’s upcoming rate case filing to excuse several witnesses from testifying at a public evidentiary hearing on Jan. 19.

John Bethel, executive director of the PSC, said the Commission will consider a proposed settlement of Entergy’s pending rate case request, which would lower the utility’s earlier filing to recoup nearly $167 million in new revenue.

Entergy Arkansas first filed the rate request in April, asking the PSC to allow the utility giant to cover expenses to upgrade the power grid and purchase the 495-megawatt power plant Union Power Station near El Dorado for $948 million in December 2014. According to Entergy spokeswoman Sally Graham and testimony from Entergy Arkansas staff on the rate case docket, the joint settlement deal would raise a monthly bill for a typical residential customer using 1,000 kWhs of electricity by 8.3%, or about 27 cents a day.

At the upcoming hearing before PSC Chair Ted Thomas and Commissioners Elana Wills and Lamar Davis, Bethel said the three-person regulatory panel will consider the proposed settlement deal after hearing testimony and questioning the witnesses from Entergy and intervenors supporting the settlement pact.

Friday’s order by the PSC excuses all witnesses and legal counsel from appearing at the Jan. 19 hearing, except those who filed testimony on the settlement agreement. Those scheduled to appear on the regulatory docket at the regulatory agency’s Little Rock headquarters include Entergy Arkansas CEO Hugh McDonald and Myra Talkington, manager of regulatory filings for Entergy Services Inc.

PSC staff scheduled to testify on the docket include Kim Davis, Matthew Klucher and Jeff Hilton. Other witnesses scheduled to appear before the three-person panel include M. Shawn McMurray from the Arkansas Attorney General’s office, and intervenors Jeffry Pollock of the Arkansas Electric Energy Consumers (AEEC), and Larry Blank with the Hospitals and Higher Education Group (HHEG).

In April, when Entergy Arkansas filed its first general rate case since 2013, the state’s largest electric utility said the adjustment would change the monthly bill of a typical residential customer using 1,000 kilowatts per hour (kWh) by nearly $13.00 or 45 cents a day. The proposed settlement deal will now lower that same bill by an additional 18 cents a day, Graham said.

Previously, McDonald has said if the rate plan is approved by the PSC, Arkansas’ current rates will still be well below the regional and national average. According to the U.S. Energy Information Administration, the national average monthly residential rate per 1,000 kWh is $127.30.

Bethel said the Commission will also begin conducting public comment hearings on the Entergy rate case in El Dorado and Batesville on Jan. 26 and Jan. 28, respectively. “Anyone interested in providing public comment may do so at any of those hearings,” Bethel said, adding that utility customers may also submit public comment online through the PSC website or by regular mail.

Graham said if the proposed settlement deal is approved, the new base rates would be reflected on customer bills beginning in April 2016. She said the increase is expected to be further offset by significant decreases to the Energy Cost Recovery (ECR) rider and the Production Cost Allocation rider (PCA).

Due to declining fuel prices, including historically low natural gas costs, Entergy is expected to file for a decrease in its ECR rider effective April 2016, about at the same time that base rates will increase. “When Rider PCA is redetermined in July 2016, the new rate is expected to further reduce the impact of the base rate increase,” Graham said.

Earlier this summer, the PSC gave final approval for petitions requesting to intervene in the upcoming rate case docket. That list includes the Arkansas Attorney General’s office, AEEC, the Federal Executive Agencies (FEA), grocery giant Kroger Co., HHEG, Bentonville-based Wal-Mart Stores, Inc., Evergreen Packaging Inc., Arkansas Advanced Energy Association, the Sierra Club, Sam’s West Inc. and Scenic Hill Solar LLC.

To view the Entergy Arkansas rate case docket 15-105-U, click here.