Entergy Tops Electric Utilities List

by Luke Jones  on Monday, Aug. 19, 2013 12:00 am  

Entergy Arkansas Inc.'s Little Rock headquarters. (Photo by Mauren Kennedy)

As is typical for Arkansas Business’ list of largest electric utility companies, Entergy Arkansas Inc. takes the top spot with $1.74 billion in 2012 revenue, up 2.86 percent from the previous year.

The list is ranked by revenue as filed publicly with the Arkansas Public Service Commission.

Entergy Arkansas is one of several operating companies under the Entergy Corp. umbrella. The others are in Louisiana, Texas and Mississippi.

The company has been undergoing huge changes during the past two years as it prepares to exit its system agreement and move its transmission lines to a regional transmission operator. In 2011 Entergy chose the Midwest Independent Transmission System Operator of Carmel, Ind., or MISO, to take that job, and the process of transitioning is slated to be complete by the end of this year.

(See our cover story this week for more details on what it’s costing some of the state’s utilities to transition.)

While MISO will be operating Entergy’s former transmission lines, the 15,800 miles of lines will actually be owned by ITC Holdings Corp. of Novi, Mich., which is purchasing the lines from Entergy for $1.78 billion.

That transaction was approved by the Federal Energy Regulatory Commission earlier this year, but still must meet state approval.

Get the List: Download the list of electric companies and oil companies in Arkansas.

Most of the rest of the electric utilities on the list are the state’s cooperatives. The cooperatives tend to service the more rural areas in the state, and excess revenue is returned to members in the form of dividends that can be either cash or credit toward future energy bills.

The largest is Arkansas Electric Cooperative Corp., with $660 million in 2012 assessable revenue, down 1.09 percent from 2011.

The list shows AECC as having 36 customers. This number is so small — compared with Entergy’s 697,200, for example — because AECC’s “customers” are actually the state’s other cooperatives and several other utilities. According to its website, AECC was created in 1949 to provide Arkansas’ cooperatives with a “reliable and affordable” power supply.

Essentially, AECC serves as a resource for other utilities so they do not have to rely on larger, investor-owned utilities for wholesale power.

CenterPoint Energy Arkansas Gas tops the list of the state’s largest gas utilities, serving 414,774 customers. Even though its assessable revenue of $335 million was 22.8 percent lower than 2011, it’s still much larger than the next largest gas utility, SourceGas Inc. of Fayetteville.

SourceGas’ assessable revenue was $117 million, 17.2 percent lower than last year, and it served 154,268 customers.

Gas Production

The list of largest gas production companies is ranked by volume of gas sales to the first buyer, as reported to the Arkansas Oil & Gas Commission.

Seeco Inc. of Fayetteville is the state’s largest gas production company this year. It sold 742,641,922 million cubic feet of gas in 2012, a 12.1 percent increase from 2011.

Seeco is the local office of Southwestern Energy Co. of Houston. Southwestern owns almost 800,000 acres and more than 3,000 producing wells across 13 counties in the Fayetteville Shale.

The company has continuously lauded its gas production in the shale, but it has also scaled back some of its efforts due to the very low price of the resource, which has ranged from a high of $13.58 per mmbtu in 2008 to a low of $1.91 per mmbtu in April 2012.

These lower prices resulted in Southwestern posting a loss of $355 million on $773 million revenue in its fourth 2012 quarter. However, it had profits of $245 million in the next quarter on revenue of $862 million.

Early in 2013, Southwestern stated it would spend about $830 million in the shale in 2013, compared with a little more than $1 billion in 2012. That includes drilling almost 400 wells, compared with 553 in 2012.

“In the Fayetteville Shale, we will continue to drive our costs and drilling time down as our newly acquired frac fleets become operational and our target is to invest within cash flow,” CEO Steve Mueller said in late 2012.

The next two largest gas production companies in the state are XTO Energy Inc. of Fort Worth, which is the local office of Exxon-Mobil; and BHP Billiton Ltd. of Melbourne, Australia, which purchased its assets in the Fayetteville Shale from Chesapeake Energy Corp. of Oklahoma City in 2011.



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