Electric customers in western Arkansas will pay more to light up their homes and businesses in January under a rate increase proposed by Southwestern Electric Power Co., according to a settlement agreement filed Tuesday with the Arkansas Public Service Commission. The commission must approve the proposal.
A residential customer who uses 1,000 kilowatt hours of electricity per month would see his overall bill increase by 8.8%, or $8.54 per month. The U.S. Energy Information Administration said the average residential utility customer used about 914 kilowatt hours per month in 2018.
SWEPCO provides electricity to nearly 120,000 residential and commercial customers in 13 Arkansas counties.
The commission staff -- along with other parties, including Attorney General Leslie Rutledge -- agreed to a settlement that cut the utility's originally requested rate increase by more than half. The settlement asks the commission to approve a $24.1 million annual rate increase. The power company originally requested a $57.6 million annual increase.
"We wholeheartedly support the end result as a very reasonable one for ratepayers," said Donna Gray, executive director of the commission.
SWEPCO, she said, elected to undergo a review process based on a historical-rate period, which looks back at actual rates as opposed to basing rate increases on projected or estimated costs.
"From the staff perspective, we were very pleased with the wisdom displayed by SWEPCO in this process," Gray said, noting that future rate requests will be easier to review as well. "There won't be any projections involved in their formula rates going forward."
Other parties in the settlement included the board of trustees of the University of Arkansas System; Walmart; Western Arkansas Large Energy Consumers; and the Sierra Club.
"We appreciate the careful consideration of our rate request, and we believe that all parties have worked toward an agreement that is fair for our customers and the company," Malcolm Smoak, SWEPCO president and chief operating officer, said in a news release.
The base-rate increase includes the costs of building, maintaining and operating the company's electric system, including power plants, transmission and distribution lines and facilities to serve customers.
A settlement hearing is scheduled for Oct. 21 at the commission's headquarters in Little Rock. Public-comment hearings also are scheduled for Oct. 24 in Ashdown and Oct. 29 in Fayetteville.
The settlement agreement includes approval of a formula rate plan for a five-year term. "The formula rate plan, as provided by Arkansas law, better aligns the company's rates with its costs on an annual basis, which promotes greater rate stability and reduces the potential for large rate swings associated with general rate cases," Smoak said.
The company serves parts of Benton, Carroll, Hempstead, Howard, Little River, Logan, Miller, Pike, Polk, Scott, Sebastian, Sevier and Washington counties.
Business on 10/16/2019