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Rate rises kick in for electric utilities

Agency says cost-recovery filings relate to natural gas’s price climb by David Smith | April 1, 2017 at 3:50 a.m. | Updated April 1, 2017 at 3:50 a.m.

Customers of the four investor-owned electric utilities in Arkansas will pay more for their electricity beginning today.

The utilities are required to file their energy cost-recovery rates by March 31 each year. The filings are made annually to recover the cost of fuel used to generate electricity. The cost of fuel is passed on to customers without any profit for the company.

"The actual fuel costs during the year were higher than the projected amount that was included in the rates [last year]," said John Bethel, executive director of the Arkansas Public Service Commission's general staff. "There was a little bit of an uptick in [natural] gas prices last year. That drove a lot of the [increases]."

Entergy Arkansas, which has about 705,000 customers in the state, will increase its rates by 3.84 percent, said Julie Munsell, a spokesman for the company. That means a customer with a monthly bill of $100 last year will have a $103.84 bill this year, assuming the same amount of electricity is used.

Entergy raised its rates 1.2 percent starting April 1, 2016. That increase was the result of a 7 percent reduction in rates based on fuel costs, combined with an 8.2 percent rate increase that had already been approved by the Public Service Commission.

Entergy last year recovered less than the actual fuel costs for two reasons, Munsell said.

"One reason was an increase in [the cost] of natural gas and coal generation, particularly in the latter half of 2016 when our natural gas prices went up a little bit," Munsell said. "At that same time, we had an extended outage at Grand Gulf [Entergy's Mississippi nuclear plant]."

Entergy gets more than 60 percent of its electricity from nuclear generation, primarily from Arkansas Nuclear One near Russellville, Munsell said.

But about 10 percent of the nuclear power for Entergy's Arkansas customers comes from Grand Gulf, she said. Entergy had to purchase more expensive power to cover for the Grand Gulf failure, Munsell said.

Entergy shut down the Mississippi plant Sept. 8 to repair a water-cooling pump. Inspectors then discovered other problems with the plant's backup heat-removal system that took until late November to repair.

Southwestern Electric Power Co., which has about 116,000 customers in western Arkansas, raised its rates 5.92 percent, Bethel said. That means a customer with a monthly bill of $100 last year will have a monthly bill of $105.92 this year.

Monthly bills for Oklahoma Gas & Electric customers will increase 7.65 percent beginning today, Bethel said. So a customer with a $100 monthly bill last year will have a monthly bill of $107.65 this year.

Oklahoma Gas & Electric has about 66,000 customers in the Fort Smith area.

Empire District Electric Co., which has about 4,400 customers in rural Northwest Arkansas, raised rates 4.02 percent for the year beginning today, Bethel said. A customer who had a $100 monthly bill last year will have a bill of $104.02 beginning with the April bill.

A Section on 04/01/2017

Print Headline: Rate rises kick in for electric utilities


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