The Arkansas Public Service Commission questioned witnesses Tuesday in an Entergy Arkansas rate case about the utility's expenses, particularly those at its Arkansas Nuclear One plant near Russellville.
Entergy Arkansas, the state's largest utility, with about 700,000 customers, and four parties to the case reached a settlement last week on a proposed rate increase first filed in July. The settlement lowered Entergy's initial request for $67.7 million to $54.4 million.
The settlement rate reflects an increase of 3.38 percent for each residential customer. That means an Entergy customer with a monthly bill of $100 would have a bill of $103.38. But two temporary charges are falling off Entergy bills next year, so residential customers will see their bills decrease 0.53 percent. The commission must still approve the settlement.
Rates for Entergy's industrial customers in the settlement were up 2.17 percent, but with the ending of the same two temporary charges industrial customers will see their bills decrease 0.94 percent, an Entergy spokesman said.
In Entergy's two previous rate cases, rates for Entergy residential customers decreased 3 percent in September 2014 and rose 2.12 percent in April.
Commissioner Elana Wills asked Entergy executive Dale James a series of questions about several multimillion-dollar expenses the utility has incurred at the Arkansas Nuclear One.
One was the hiring of 44 employees at an annual cost of about $6.7 million, part of Entergy's nuclear reliability and improvement process.
Wills asked James if staffing levels at the nuclear plant had been reduced in prior years.
"We identified that there had been staffing reductions made over a period of approximately seven years," James said. Entergy made those reductions relative to similar practices by top utilities nationally, James said.
But using a more current measure from top utilities for bench marks, Entergy determined that it needed to hire 44 more employees, James said.
"Over the past four or five years, there has been a fairly substantial number of long-term employees that have retired," James said. "Their replacements typically don't come with the same skills and capabilities."
Because of pending litigation and insurance claims, all of Entergy's costs associated with a March 2013 accident at Arkansas Nuclear One have been separated from the rate case the commission is currently considering.
One worker was killed when a 1 million pound piece of equipment collapsed, falling through the second level floor to the first level of the nuclear plant. Eight others were injured. The accident led to serious sanctions against Entergy from the federal Nuclear Regulatory Commission.
It could be several years before those costs are addressed in a rate case, said John Bethel, executive director of the commission's general staff.
Other costs at Nuclear One that are not part of the 2013 accident are included in this case.
The commission should decide whether to approve the settlement by the end of the year, Bethel said.
This is the first formula rate case the commission has heard since legislation allowing annual rate-change requests was passed last year. A formula rate plan is a regulatory mechanism for adjusting rates. Investor-owned utilities are allowed to use the plan annually to streamline the rate-setting process, instead of waiting several years to file rate cases.
Business on 11/02/2016