Entergy Arkansas, a utility of New Orleans-based Entergy Corp., announced Friday (March 18) a fuel rate increase that’s expected to go into effect on April 1 to offset rising cost of natural gas. The average residential customer using 1,000 kilowatt-hours per month can expect a nearly $8 bill increase, or a rise of 7.5%.
This week, Entergy Arkansas submitted the filing with the Arkansas Public Service Commission to increase the Energy Cost Recovery Rate (ECR), which accounts for about 9% of a residential customer’s total monthly bill. The rate will increase from less than 1 cent per kilowatt-hour to 1.8 cents, according to a news release.
The new rate is expected to be in effect from April to March 2023, unless an adjustment is needed, and will show on customer bills as fuel and purchased power cost. According to the release, the rate is normally adjusted each spring and fluctuates depending on changes in the cost of fuel used by Entergy Arkansas to generate electricity and wholesale prices paid for additional electricity.
“The total increase that customers could see on their bill will vary based on their individual energy usage and the kilowatt-hours consumed at their home,” said Ventrell Thompson, acting vice president of customer service.
Over the past two years, the Energy Cost Recovery Rate declined, and the existing rate is the lowest in more than 10 years, the release shows. Historically, natural gas prices have been a lower-cost fuel, but the prices rose by 93% in 2021, from 2020, according to industry benchmark Henry Hub.
“At Entergy Arkansas, we carefully plan and invest our resources to provide reliable power and keep rates as low as possible,” said Kurt Castleberry, director of resource planning and market operations. “Fuel diversity pays off and so does our investment in our nuclear fleet to keep them producing electricity at historically high levels.
“Last year, our nuclear generation sources set a record,” he added. “Low cost, emission-free power provides about 70% of the electricity our customers consume to help insulate them from the cost swings of natural gas. This kept the ECR rate from going even higher.”
Entergy Arkansas has about 722,000 customers in 63 counties.