News About Rates

APSC Approves New Arkansas Rates

The Arkansas Public Service Commission has approved new base rates for SWEPCO customers in Arkansas. (See news release) The Dec. 27, 2019, decision provides a net annual increase of $23.9 million in non-fuel base rates.

How will this affect customers’ bills?

  • An Arkansas residential customer using 1,000 kilowatt-hours per month will see an overall bill increase of approximately $8.43 per month, or 8.7%.
  • Increases for individual customers will vary depending on rate class and electricity usage.
  • New rates go into effect Dec. 31, which is first billing cycle of January 2020.

What are base rates?

Base rates refer to the costs of building, maintaining and operating SWEPCO’s electric system, including power plants, transmission and distribution lines and facilities to serve customers. Base rates do not include the fuel portion of the customer’s bill, which pays for fuel and purchased power, and is a pass-through to customers with no profit to the company.

Who was involved in the settlement agreement?

With its action in December, the APSC modified and approved the terms of a unanimous settlement agreement filed Oct. 15, 2019, by SWEPCO, the APSC General Staff, the Attorney General of Arkansas, the Board of Trustees of the University of Arkansas, Walmart, Inc., the Western Arkansas Large Energy Consumers and the Sierra Club. (See news release)

What is the formula rate plan?

The APSC decision includes approval of a formula rate plan for a five-year term, beginning in 2021. The formula rate plan, as provided by Arkansas law, better aligns the company’s rates with its costs on an annual basis, which promotes greater rate stability and reduces the potential for large rate swings associated with general rate cases.

What existing costs move into base rates?

The APSC decision also moved into base rates $28.9 million for costs currently recovered through separate charges, or riders, on customers’ bills. These existing costs include additional power plant environmental controls completed between 2013 and 2016 to meet federal mandates, plus construction of a high-efficiency, combined cycle natural gas plant, completed in 2010.