SWEPCO rate increase approved, to start in July

A worker holds a smart meter before its installation at a residence in this July 13, 2018, file photo. The meter replaces electric meters and transmits power-usage data wirelessly to an electric utility, ending the need for workers to visit a home and log power usage. (AP/Gerry Broome)
A worker holds a smart meter before its installation at a residence in this July 13, 2018, file photo. The meter replaces electric meters and transmits power-usage data wirelessly to an electric utility, ending the need for workers to visit a home and log power usage. (AP/Gerry Broome)

Nearly 125,000 western Arkansas customers served by Southwestern Electric Power Co. will see average residential electric rates go up about $13.02 a month beginning immediately with July's billing cycle.

The Arkansas Public Service Commission approved the rate increase Wednesday. Monthly customer bills will include higher base rates combined with an interim fuel adjustment to recover costs related to the 2021 winter storms that ravaged Arkansas.

"We understand customers have concerns regarding increases in energy costs," Malcolm Smoak, SWEPCO president and chief operating officer, said in a statement announcing the rate increase. "We believe the best way to hold down fluctuating cost drivers, such as natural gas, is to invest in a diverse energy mix."

SWEPCO's residential customers using 1,000 kilowatt-hours per month will see a total increase of about $13.02. That includes a 9.49% base rate increase, which will make up about $10.57 per month for the average homeowner.

Bills also will include an Energy Cost Recovery adjustment, adding another $2.45 per month to residential bills.

Increases will vary based on usage for commercial, industrial, municipal and lighting-rate customers.

SWEPCO is owned by American Electric Power, a multistate utility based in Columbus, Ohio, that reported annual revenue in 2021 of $16.8 billion, a more than 12% increase from 2020. The company reported earnings of $2.5 billion, up from $2.2 billion in 2020.

The Arkansas Public Service Commission, in Wednesday's order, noted the commission staff approved the rate increase after review and "no other party to the docket filed responsive testimony" challenging the request.

The new base rate reflects investments in reliability and improvements to the resiliency of the power grid and cleaner power generation, the company said, including the build out and purchase of three wind facilities at the North Central Energy Facilities (NCEF) in Oklahoma. All three wind facilities are in commercial operation, with the third and largest facility added in March. NCEF provides Arkansas with 268 megawatts of SWEPCO's 809-megawatt generation.

Base rates support building, maintaining and operating SWEPCO's electric system, including power plants, transmission and distribution lines and facilities to serve customers.

SWEPCO filed the request with the Arkansas Public Service Commission in July 2021.

The company said fuel-recovery costs related to the 2021 storm should begin to decline next year.

SWEPCO serves more than 543,000 customers in portions of Arkansas, Louisiana and Texas. American Electric operates the nation's largest electricity transmission system and has 5.5 million customers in 11 states.

Entergy Arkansas customers saw a monthly rate increase of $6.80 starting in April.

Overall, Entergy increased rates by 6.14% for all customer classes -- more than 720,000 residential, business and commercial ratepayers. That's down from a 7.5% rate increase the state's largest electric utility proposed to the public service commission in March.

The utility, which is owned by Entergy Corp. of New Orleans, serves residential, business and commercial customers in 63 Arkansas counties.


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