Entergy seeks 3.75% bump in state's rate

Commission set to decide on increase bid next month

Posted: November 9, 2017 at 4:30 a.m.

Electric rates for Entergy Arkansas residential customers will rise 3.75 percent next year if approved next month by the Arkansas Public Service Commission.

The largest electric utility in the state with about 715,000 customers in 63 counties, Entergy reached a settlement last week with the parties to its case before the commission.

The commission heard testimony Wednesday on the settlement.

The increase means a residential customer with a $100 monthly bill now would have a bill of $103.75 a month when the change goes into effect on Jan. 2. The increase for industrial users will be about 3.72 percent, John Bethel, executive director of the commission's general staff, said Wednesday.

As requested by Entergy, the commission should make a decision on the settlement by Dec. 13, Bethel said.

Entergy filed a request for new rates with the commission in April under a more streamlined annual filing process that was approved by the Legislature.

Last year, the commission approved a 3.38 percent increase for Entergy. Those rates were charged this year.

The streamlined filing process caps Entergy Arkansas' rate increases at 4 percent a year.

During Wednesday's hearing, Commissioner Elana Wills asked Richard Riley, Entergy Arkansas' president, if Entergy is in a period of very high capital investment.

"Are we over the hump after 2018?" Wills asked. "Is the trend line going back down after that period or is it something that is going to continue?"

For the investment required to transmit and distribute electricity and maintain a nuclear power plant, Entergy "is not over the hump yet," Riley said.

"We're really just starting to modernize, for example, our distribution system," Riley said, "and it may be 2020 or 2021," before Entergy Arkansas can lower its spending on infrastructure.

Asked by commission Chairman Ted Thomas about the status of Arkansas Nuclear One near Russellville, Riley said Entergy Arkansas is spending the money needed to continue operations.

"For the next four or five years, we'll have a heightened level of spending at [Arkansas Nuclear One]," Riley said. "After that it will level off some. The new level of spend might be different than the old level of spend. A good example is the hiring of additional staff. We would hope to keep that level of staff going forward, which would result in a bit higher expense than in 2010 or 2012."

But portions of Entergy's expenses aren't covered by the current rate case.

Future rate increase requests could include costs associated with an industrial accident at Arkansas Nuclear One in 2013 that caused the death of one worker and eight injuries.

On March 31, 2013, the mishandling of a 1 million-pound generator stator caused it to fall 30 feet while it was being moved. The crashing stator dislodged beams. One of the beams struck and killed worker Wade Walters, 24.

In 2015, in the aftermath of the accident, the federal Nuclear Regulatory Commission moved the Arkansas nuclear plant down to the column-four category of the commission's rating of overall plant performance. Plants in column five aren't permitted to operate.

Riley told the commission Wednesday that Entergy expects the nuclear power plant will be out of column four by next June.

"Entergy has committed to complete all of the outstanding items identified in the performance improvement plan for Arkansas Nuclear One by June 30, 2018," Victor Dricks, a spokesman for the Nuclear Regulatory Commission, said in an email Wednesday. "When this has occurred, [the nuclear commission] will conduct an independent inspection to verify the adequacy of the corrective actions and make a decision about returning the plant to normal oversight."

Entergy will file a separate case with the commission, possibly in 2020 or later, on the costs associated with the accident. The case will be referred to as the "Stator-related Recovery Docket," the current settlement agreement said.

There are at least seven lawsuits that have been filed in Pope County concerning the accident, including one Entergy has filed against its insurance carrier, Entergy said in the settlement.

The stator case will not be filed until at least six months after those cases have been adjudicated.

The costs associated with the accident are at least $218 million, Entergy said in the settlement agreement.

Those costs include about $65.9 million in replacement power costs while part of the plant was shut down after the accident, $30.6 million in capital costs related to the accident and $112 million in costs related to increased regulatory costs and compliance.

The stator case will be subject to review by the commission, Bethel said.

Business on 11/09/2017