Deal struck on Entergy’s ’17 rate rise

Entergy Arkansas and the four parties to its request to increase 2017 electric rates have reached a settlement.

Entergy, the Public Service Commission’s general staff, the attorney general’s office, Arkansas Electric Energy Consumers and a group of hospitals and colleges settled on a rate increase request of $54.4 million, said John Bethel, executive director of the commission’s general staff. The utility initially requested a $67.7 million rate increase.

“All of the parties have agreed that the revenue requirement reflected in Entergy’s last filing should be the level that’s approved by the commission,” Bethel said Tuesday.

Entergy Arkansas, the state’s largest utility with about 700,000 residential customers in 63 counties, filed an application in July with the Public Service Commission to raise its rates under a new law that allows the state’s utilities to file an annual rate-adjustment plan.

The $54.4 million rate increase 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 beginning with the first billing cycle in January based on the settlement, Bethel said.

But temporary charges paid by residential customers soon are to expire, effectively reducing residential bills.

One interim charge will expire before January and another will be reduced, Bethel said. With those adjustments, the actual change will be a 0.52 percent decline in a monthly bill, Bethel said. So a residential customer with a $100 bill will have a bill of $99.48 beginning in January.

There still could be another adjustment to residential Entergy bills.

Entergy paid $18.5 million in January to buy four buildings at its Arkansas Nuclear One site.

The attorney general’s office has questioned whether the $18.5 million purchase of the buildings was appropriate, Bethel said.

“[Entergy Arkansas] has provided sufficient support that the purchase is appropriate and no adjustment to the amount [included in rates] is warranted,” Michael Considine, who testified in the case on behalf of Entergy, said in a filing.

But the parties to the case decided to include the purchase in the current rate increase, subject to a refund to customers in the future, Bethel said. If it is decided that the purchase isn’t appropriate, it will be addressed in Entergy’s rate-adjustment case next year, Bethel said.

The settling parties to the Entergy case agreed that Entergy will provide additional information in subsequent annual rate cases, Considine said.

The settlement addressed all the parties’ issues, Laura Landreaux, vice president of regulatory affairs for Entergy Arkansas, said Tuesday in an email.

The annual rate case is an effective regulatory mechanism for adjusting rates, Landreaux said.

“It also better aligns the time frame in which Entergy Arkansas makes an investment and when customers receive the benefit of the investment,” Landreaux said.

Bethel said he can’t predict whether the commission will approve the settlement or make changes to it. If the commission approves the settlement, a hearing scheduled for next Tuesday on Entergy’s rates will be canceled.