Entergy Arkansas rate filing outlines investments, rate hikes and decreases

Entergy Arkansas filed documents with the Arkansas Public Service Commission this week that will raise residential rates through a new state law aimed at phasing in rate increases more systematically as large scale projects are constructed.

Additionally, Entergy’s parent company Entergy Corporation, touted long-term savings to Arkansans of $1.7 billion tied to forthcoming data center projects, while its Arkansas arm also said a 2022 federal law will allow the company to pass along savings due to a new nuclear production tax credit.

In a lengthy press release, Entergy officials said the rate increase filing, part of its strategic investment update provided to the PSC, will ask for a rider to phase in pass-through costs to customers for three new generation construction projects – Ironwood Power Station in Hot Spring County and Jefferson Power Station and Arkansas Cypress Solar and Battery in Jefferson County.

If approved by the PSC, the end result for a typical residential customer using 1,000 kWh per month, the 2026 Generating Arkansas Jobs Act rider update would result in an estimated $5.77 monthly increase (approximately 4.17%), primarily reflecting reliability and capacity investments needed to serve customer growth.

When combined, the rider and the federal nuclear tax credit would lead to a net bill increase of $4.22 (approximately 3%) for a residential customer using 1,000 kWh per month. This is due to an estimated $1.55 monthly bill decrease (approximately 1.14%) from the nuclear production tax credit, the company said.

“Arkansas is growing, and our electric system must grow with it,” said Laura Landreaux, president and CEO of Entergy Arkansas. “The Generating Arkansas Jobs Act allows us to build the infrastructure needed to support new growth, more job creation and new investments in Arkansas communities while keeping power affordable and reliable. In turn, this allows Entergy Arkansas to attract new large customers that will pay their fair share and put downward pressure on rates. Through these efforts, Entergy Arkansas continues to keep rates low for customers, as shown by its recent rate review with an overall change of less than 2%.”

The new generation projects Entergy has announced will help fuel power to two recently-announced data center projects in Arkansas – the Google data center in West Memphis and the Avaio data center in Little Rock. Google has agreed to support the construction of a new 600-megawatt solar and 350-megawatt battery facility, a move Entergy said will further diversify the company’s power portfolio.

“Our customers in Arkansas are going to see bills lower than they otherwise would have been if it had not been for Governor Sarah Sanders’ successful recruitment of Google and the Arkansas Public Service Commission’s review and approval of the contract,” said Landreaux. “And this benefit is on top of Google covering its full cost to serve.”

POLICY CHANGES
Entergy Arkansas’ filing is part of a new annual requirement from the Generating Arkansas Jobs Act of 2025. That state law allows Entergy to phase in smaller rate increases to customers on the front-end of construction projects versus applying a rate increase for the total costs of projects once they are completed.

Entergy said it will file this annual update around March 1 each year, with approved changes taking effect in June billings.

The nuclear production tax credit is a feature of the federal Inflation Reduction Act of 2022.

It created production tax credits for electricity generated by existing nuclear plants. Entergy Arkansas, which operates a nuclear plant in Russellville, Ark., qualified for those credits and monetized its 2024 nuclear production tax credits in 2025, allowing the company to begin flowing their value to customers immediately rather than waiting to apply them against future tax liability.

The Arkansas Public Service Commission must approve the latest request and is also considering a separate $1 a month residential rate increase submitted by Entergy Arkansas in February.