UTILITIES
GOVERNMENTAL AFFAIRS COMMITTEE
Hot Springs Village Property Owner’s Association
| utilities.docx |
by Gerald Allen
03-04-2016
By order issued on February 26, the Public Service Commission approved, with some modification, the settlement agreement among the parties in the case. The parties consisted of Entergy, the Commission staff, the Consumer Utilities Rate Advocacy Division of the Attorney General’s Office and several other intervening entities. The parties accepted the Commission modifications thus essentially concluding rate proceedings except for some administrative matters. A summary of the rates proposed by Entergy and the approved rates is depicted the following table:
SUMMARY
APPROVED ENTERGY RATES - DOCKET NO. 15-015-U
PARAMETER
ORIGINAL APPLICATION
APPROVED BY PUBLIC SERVICE COMMISSION1
Increase In Annual Retail Revenue
$167 Million
$128.2 Million
Return On Equity
10.2%
9.75%2
Change In Rates by Customer Class:
Residential:
Typical Customer Increase/Mo.3
+13.16%
$ 13.773
+9.13%
$ 8.383
Small General Service
+13.57%
+9.13%
Large General Service
+1.89%
+3.69%
Lighting
-2.42%
-1.26%
Other Provisions:
Effective 1st Billing Cycle in April
[1] Based on Entergy closing on the purchase of an interest in a power generating plant by a date certain and will be slightly less, at least temporarily, if this date is not met.
2 Current authorization is 9.5%.
3 1,000 Kwh per month.
There will be some relief, at least temporarily, because of low fuel costs. There was an article in the Saturday Democrat-Gazette quoting the CEO of Entergy that the fuel and purchased power adjustment charge to be filed in March would reduce the rate increase for residential customers to about 1.2 percent. I contact John Beckel, Commission Executive Director, who advised that the Energy Cost Recovery Rider update is filed each year by March 15 and becomes effective for the first billing cycle in April and continues for the following twelve months. The rider recovers the cost of fuel and purchased power that reflects the costs from the preceding calendar year. The tariff also includes a "true-up" component that adjusts for any over- or under-recovery from prior periods. Based on this information, it appears that the reduced rate will likely be in effect until March 2017 and thereafter it is subject to changes depending on energy and purchased power costs.
The following are excerpts from the Commission Order pertaining to HSV:
“Three persons made public comments at the January 19 hearing and addressed problems with service reliability in the Hot Springs Village area, disparity among customer classes because of higher rate increases for residential and small business customers, the magnitude of the increases proposed, and the return on equity proposed. EAI (Entergy Arkansas, Inc.) witness McDonald (CEO, Entergy) acknowledged some problems in the Hot Springs Village area and discussed EAI's plans to address those concerns.”
The impact on the Commissions rulings in this case, if any, of the public comments made at the January19 hearing by Harv Shelton, POA President; Michael Dollar, President, HSV Chamber of Commerce; and Bob Herbert, a former business owner in HSV, cannot be measured. However, these comments were important because they directed attention to both the Commission members and the highest levels of Entergy management to the deficiencies in the reliability of service in HSV and elicited a commitment from Entergy to address these shortfalls, all in a formal public forum.
02-05-2016
Jerry Yeric and I accompanied Harv Shelton and Mike Dollar to the Arkansas Public Service Commission hearing on January 19. Harv spoke on behalf of the HSV residential and small general service Entergy customers covering the following topics:
Following the comments of Mike Dollar, representing the Hot Springs Village Chamber of Commerce and Mr. Bob Herbert former owner of Village Yogurt near the west gate, Mr. Hugh McDonald, Entergy CEO, took the witness stand for questioning by the Commission. In response to questions by Commissioners, Mr. McDonald acknowledged that service reliability in the Village was not acceptable and made a commitment to make improvements needed to address the problem.
During a break in the proceedings, Mr. McDonald and his successor designate, Mr. Rick Riley, reinforced Mr. McDonald’s commitment and agreed to meet with Village officials to discuss plans and progress to fulfill this commitment.
01-08-2016
UA College of Engineering K-4 Teacher Training Program – Gerald Allen
10-09-2015
06-05-2015
Entergy Arkansas, Inc. Request for Rate Adjustments, Docket # 15-015-U
On April 24, Entergy filed an application with the Arkansas Public Service Commission to adjust its rates sufficient to increase its revenue by $1,327.4 million having the following impact as a percent change in current rates by customer rate class as follows:
Residential + 13.16%
Small General Service + 13.57%
Large General Service + 1.89%
Lighting (Street) - 2.42%
The Estimated monthly impact on average residential customer would be an increase of $13.77. Those HSV residents located in Garland County (representing about one-half of the total population) are served by Entergy and thus will be impacted by rate adjustments authorized by the Commission in this rate case.
Public input regarding this application may be made by individuals as follows:
I spoke to Mr. John Bethel, Commission Executive Director, regarding scheduling a public hearing at a location nearer to HSV. Although he was not optimistic about this prospect, he indicated that the Commission staff was available to make a presentation in HSV regarding rate case procedures and how the public can participate in the process.
Public input by individuals, groups and governing officials regarding factors such as reasonableness, equity, affordability, etc. of the rates requested by the utility; the quality and reliability of the utility’s service; and the responsiveness, effectiveness and efficiency of the utility can have an impact on rates granted by rate regulating agencies such as the Arkansas Public Service Commission. The impacted HSV residents and HSVPOA leadership are encouraged to participate in this process. Further, elected state and local officials should be encouraged to participate on behalf of their constituents.
03-04-2016
By order issued on February 26, the Public Service Commission approved, with some modification, the settlement agreement among the parties in the case. The parties consisted of Entergy, the Commission staff, the Consumer Utilities Rate Advocacy Division of the Attorney General’s Office and several other intervening entities. The parties accepted the Commission modifications thus essentially concluding rate proceedings except for some administrative matters. A summary of the rates proposed by Entergy and the approved rates is depicted the following table:
SUMMARY
APPROVED ENTERGY RATES - DOCKET NO. 15-015-U
PARAMETER
ORIGINAL APPLICATION
APPROVED BY PUBLIC SERVICE COMMISSION1
Increase In Annual Retail Revenue
$167 Million
$128.2 Million
Return On Equity
10.2%
9.75%2
Change In Rates by Customer Class:
Residential:
Typical Customer Increase/Mo.3
+13.16%
$ 13.773
+9.13%
$ 8.383
Small General Service
+13.57%
+9.13%
Large General Service
+1.89%
+3.69%
Lighting
-2.42%
-1.26%
Other Provisions:
Effective 1st Billing Cycle in April
[1] Based on Entergy closing on the purchase of an interest in a power generating plant by a date certain and will be slightly less, at least temporarily, if this date is not met.
2 Current authorization is 9.5%.
3 1,000 Kwh per month.
There will be some relief, at least temporarily, because of low fuel costs. There was an article in the Saturday Democrat-Gazette quoting the CEO of Entergy that the fuel and purchased power adjustment charge to be filed in March would reduce the rate increase for residential customers to about 1.2 percent. I contact John Beckel, Commission Executive Director, who advised that the Energy Cost Recovery Rider update is filed each year by March 15 and becomes effective for the first billing cycle in April and continues for the following twelve months. The rider recovers the cost of fuel and purchased power that reflects the costs from the preceding calendar year. The tariff also includes a "true-up" component that adjusts for any over- or under-recovery from prior periods. Based on this information, it appears that the reduced rate will likely be in effect until March 2017 and thereafter it is subject to changes depending on energy and purchased power costs.
The following are excerpts from the Commission Order pertaining to HSV:
“Three persons made public comments at the January 19 hearing and addressed problems with service reliability in the Hot Springs Village area, disparity among customer classes because of higher rate increases for residential and small business customers, the magnitude of the increases proposed, and the return on equity proposed. EAI (Entergy Arkansas, Inc.) witness McDonald (CEO, Entergy) acknowledged some problems in the Hot Springs Village area and discussed EAI's plans to address those concerns.”
The impact on the Commissions rulings in this case, if any, of the public comments made at the January19 hearing by Harv Shelton, POA President; Michael Dollar, President, HSV Chamber of Commerce; and Bob Herbert, a former business owner in HSV, cannot be measured. However, these comments were important because they directed attention to both the Commission members and the highest levels of Entergy management to the deficiencies in the reliability of service in HSV and elicited a commitment from Entergy to address these shortfalls, all in a formal public forum.
02-05-2016
Jerry Yeric and I accompanied Harv Shelton and Mike Dollar to the Arkansas Public Service Commission hearing on January 19. Harv spoke on behalf of the HSV residential and small general service Entergy customers covering the following topics:
- Reliability of service calling the Commissions attention to the high frequency and duration of power outage events experienced by these Entergy customers and thus his belief that the company was not meeting Commission standards for “safe and reliable” service.
- Rate disparity among customer classes and magnitude of increase proposed pointing out that although the recently proposed settlement by the parties to the rate case would reduce the disparity between the rates for residential and small general service customers compared to large general service customers, it did not go far enough.
- Although the increase in rates for residential and small general service customers proposed by the settlement were reduced from about 13.5 percent to about 9.5 percent, it remains high compared to less than four percent increase for large general service customers.
- Although acknowledging Entergy’s need to earn a reasonable rate of return on shareholder equity to reward shareholders and contribute to system expansion and improvements, the return granted should take into account deficiencies in the quality of service provided.
- Presented the following recommendations to the Commission:
- Find that Entergy is not providing reliable service to the residential and small general service classes of Hot Springs Village customers in accordance with Commission rules and take steps to compel it to do so.
- Carefully examine the proposed rate adjustments for these classes of customers to assure equity amongst the various customer classes and make adjustments where warranted. If the rate findings for these customer classes justify increases exceeding 8%, then phase the increase in over a period of two years.
- In view of the deficiencies in service reliability, limit the return on equity to 9.5% as currently allowed.
Following the comments of Mike Dollar, representing the Hot Springs Village Chamber of Commerce and Mr. Bob Herbert former owner of Village Yogurt near the west gate, Mr. Hugh McDonald, Entergy CEO, took the witness stand for questioning by the Commission. In response to questions by Commissioners, Mr. McDonald acknowledged that service reliability in the Village was not acceptable and made a commitment to make improvements needed to address the problem.
During a break in the proceedings, Mr. McDonald and his successor designate, Mr. Rick Riley, reinforced Mr. McDonald’s commitment and agreed to meet with Village officials to discuss plans and progress to fulfill this commitment.
01-08-2016
UA College of Engineering K-4 Teacher Training Program – Gerald Allen
- John Lands, George Bollier and I met with Darin Beckwith, Superintendent, and Brad Sullivan, Director of Curriculum Instruction, Fountain Lake School District, on December 11, 2015 to present the University of Arkansas College of Engineering K-4 teacher training program. This program is aimed at preparing elementary school teachers to effectively implement the new Arkansas K-4 Science Standards. These standards are intended to better prepare students for life outside the classroom, including pursuing science, technology, engineering and math (STEM) degrees in college and entering a workforce where highly skilled workers are in great demand.
- The K-4 teaching program is supported financially by a three-year $1.7 million grant from the Arkansas Department of Education. Approximately 135-150 teachers will be trained through this 3-year program consisting of three workshops per year consisting of a total of eleven days per year. Teachers must commit to actively participating in the program for the full three years barring unforeseen events (grade level changes, retirement, etc.) and will be paid a stipend plus reimbursement of travel expenses for attending workshops.
- The Fountain Lake officials have expressed strong interest in the program and expect to submit applications for five teachers for participation in the program with a final decision to be made by January 11. Time is of the essence since there are few remaining spaces available.
10-09-2015
- Approximately 45 HSV residents attended the town hall meeting held on September 17 regarding Entergy’s rate increase request that is before the Arkansas Public Service Commission. Mr. John Bethel, Commission Executive Director, was the principal speaker. He discussed Entergy’s rate proposal, the importance of consumer participation in the rate making process and details regarding how to participate. Several Village board members attended, including President Harv Shelton who will present comments on behalf of the Village Entergy customers before the Commission or presiding official during the formal Commission hearings in Little Rock on January 19.
- The Hot Springs Village Area Chamber of Commerce’s Executive Director, Michael Dollar, will present during public comments at the Arkansas Public Service Commission hearing on January the 19th in support of reliable and affordable utilities along the Arkansas Highway 7 Scenic Byway business corridor in north Garland County.
06-05-2015
Entergy Arkansas, Inc. Request for Rate Adjustments, Docket # 15-015-U
On April 24, Entergy filed an application with the Arkansas Public Service Commission to adjust its rates sufficient to increase its revenue by $1,327.4 million having the following impact as a percent change in current rates by customer rate class as follows:
Residential + 13.16%
Small General Service + 13.57%
Large General Service + 1.89%
Lighting (Street) - 2.42%
The Estimated monthly impact on average residential customer would be an increase of $13.77. Those HSV residents located in Garland County (representing about one-half of the total population) are served by Entergy and thus will be impacted by rate adjustments authorized by the Commission in this rate case.
Public input regarding this application may be made by individuals as follows:
- E-mail using the Commission Web Site at www.apscservices.info/ (from the home page click on “public comments” located on right side of screen and following instructions selecting Docket # 15-015-U on the docket pull down menu). Note that comments made by others can also be accessed at this page.
- By mail addressed to the attention of the Commission Secretary at Arkansas Public Service Commission, P.O. Box 400, Little Rock, Arkansas 72203-0400 and referencing Docket # 15-015-U. Comments by citizen petitions may also be submitted by mail to the attention of the Commission Secretary.
- By making statements before the Commission at a public hearing. The currently scheduled hearing nearest to HSV will the held at the Commission offices in Little Rock on January 19, 2016, commencing at 9:30 a.m.
I spoke to Mr. John Bethel, Commission Executive Director, regarding scheduling a public hearing at a location nearer to HSV. Although he was not optimistic about this prospect, he indicated that the Commission staff was available to make a presentation in HSV regarding rate case procedures and how the public can participate in the process.
Public input by individuals, groups and governing officials regarding factors such as reasonableness, equity, affordability, etc. of the rates requested by the utility; the quality and reliability of the utility’s service; and the responsiveness, effectiveness and efficiency of the utility can have an impact on rates granted by rate regulating agencies such as the Arkansas Public Service Commission. The impacted HSV residents and HSVPOA leadership are encouraged to participate in this process. Further, elected state and local officials should be encouraged to participate on behalf of their constituents.