Council approves Entergy acquisition ordinances
Although negotiations between Benton Utilities and Entergy Arkansas, LLC are still ongoing regarding BU’S acquisition of Entergy property near Exit 114, the Benton City Council approved two ordinances relating to the matter including a measure that calls for a special election in March
2020 if a settlement between the two companies cannot be reached.
BU is interested in servicing an area located north of Interstate 30 (near Exit 114), but the area is currently being serviced by Entergy.
In 2008, the Benton City Council
annexed a large land parcel near Exit 114.
According to Benton Utilities officials, the Arkansas Public Service Commission creates maps that define service areas of nonmunicipal electric utilities. The Exit 114 property was split between Entergy and First Electric Cooperative.
John Bethel, director of public affairs for Entergy, addressed the council during Monday night’s council meeting asking the council not to approve the ordinances stating that approval could jeopardize the negotiations. He previously asked the aldermen during the November meeting to hold off on a vote until the December meeting, which the council agreed to do.
“At that time we were making progress toward reaching an agreement with the Benton Utilities Commission on resolving the matter of dispute between the two of us,” Bethel said. “I think that we have an agreement in principal. We don’t have that agreement produced to writing and ready to present to you tonight.”
According to Benton Utilities, at the time of annexation, the property was underdeveloped and there were no customers, distribution properties or facilities to purchase. Benton Utilities contacted both companies which, at that time, agreed that nothing existed to be purchased and that Benton Utilities would serve the area.
Benton Utilities officials claim now that the area is poised for significant development, Entergy argues that Benton Utilities has no right to serve the property.
Alderman Steve Lee and City Attorney Brent Houston both questioned Bethel as to why Entergy opposes the ordinances due to the fact that they can be repealed if an agreement is reached.
“Explain that if it passed tonight, how would that negatively affect the negotiation process between the city and Entergy,” Houston said.
Bethel answered by saying that an approval vote would start a “formal process.”
“Making preparations for an election declares the city is, by it’s own ordinances, intending to act to take our property,” Bethel said. “Right now that hasn’t happened, but when it does, certainly we have to consider what actions we may need to take to protect and defend our rights just as you believe you need to do that.”
If the ordinances were not approved during last night’s meeting, the city would miss the required deadline set by state law when calling a special election.
Bethel also said that by not approving the ordinances, the negotiations could “continue to be positive.”
“We’re on a time frame, the city is,” said Alderman Bill Donner. “We have to have these documents done in order to get it on the ballot next year. But, if y’all agree, we can go up to the day before the election and remove it from the ballot.”
Jason Carter, the attorney representing Benton Utilities in the matter, also addressed the council.
“I want to echo the point that Mr. Bethel said that we do feel like we are at a point where we have an agreement in principal… we believe we are negotiating to agreeable terms,” Carter said.
While a special election could be held in April, holding it in March results in lower costs for the city.
Public Utilities Commission Chairman Elect Doug Stracener said that it is his personal recommendation that the ordinances be passed.
“I think it’s imperative that this is passed,” Stracener said. “We can back out of (the election) any time up until that day… right now (Entergy) has nothing that is pushing them. If we pass this, they will come to the table more readily.”
BU general manager David Vondran also stated that the election can be called off should the companies reach a settlement, but by approving the ordinances BU would have a back-up plan in place for the possible acquisition.
“As Benton Utilities and Entergy walk out on a trapeze on a high wire as we approach each other with this negotiated settlement, we can always reach a settlement prior to the election,” Vondran said. “But, it is nice knowing that we have this net underneath us. I do believe that this net will encourage Entergy to continue working with us in good faith toward reaching that agreement.”
Vondran also stated that he was hopeful that an agreement would be ready to be presented to the Benton City Council’s Community Services Committee at their next meeting which will be held on January 16.
All aldermen present for the meeting voted to approve both ordinances. Alderman Steve Brown was absent from the meeting.