The Arkansas Public Service Commission has approved a 3.4 percent rate increase for Entergy Arkansas residential customers that had been mandated by federal regulators.
The increase is to cover $3 million to address an earlier shortfall in rates and $67.8 million to adjust a payment Entergy Arkansas made to its sister Entergy companies in three states after an order last year issued by the Federal Energy Regulatory Commission.
The 3.4 percent increase for Entergy Arkansas' 700,000 customers means a residential customer who has a $200 electric bill this month will have a bill of $206.80 next month with the same electricity used.
The Arkansas commission approved the increase Friday.
Entergy Arkansas will start collecting the payments next month, said Julie Munsell, a spokesman for the utility. The payments will expire in December.
The federal commission required a recalculation of a 2005 payment Entergy Arkansas made to Entergy Mississippi, Entergy Texas, Entergy Gulf States and Entergy New Orleans. After the recalculation, the federal commission determined Arkansas customers should pay $67.8 million.
In 2005, the federal commission declared that production costs between Entergy Corp. operations in Arkansas, Louisiana, Mississippi and Texas weren't evenly distributed and that Entergy Arkansas and its customers, which had the lowest bills, had to make up the difference.
Arkansas customers have not had to make the additional payments since December 2013, when Entergy Arkansas exited from its "system agreement" with other Entergy companies.
"Since 2007, Entergy Arkansas has filed an annual adjustment each June to reflect the prior year's [additional] payment and any over- or under-recovery balance from the filing year," said Sally Graham, an Entergy Arkansas spokesman.
The $67.8 million in charges come from the federal regulator's order, and the state is required to pass it on, said John Bethel, executive director of the general staff of the Arkansas commission.
"There was a question at the state level as to what was the proper way to collect or allocate those costs between retail and wholesale customers [of Entergy Arkansas]," Bethel said.
After considering the arguments, the Arkansas commission decided that the charges should be recovered as Entergy Arkansas had requested, Bethel said.
Business on 01/13/2015