Energy Efficiency Drives Decline in Utility Revenue

Gas and electric bills fluctuate from month to month and year to year, depending on weather and commodity prices. So it’s not surprising to see that Entergy Arkansas Inc., the biggest public utility in the state, saw a slight decrease in revenue in 2011 compared with 2010.

Here’s what is surprising: Entergy’s 2011 assessable revenue in Arkansas was actually lower in 2011 than it was 10 years earlier — and 15 years earlier — despite steadily increasing numbers of customers.

The explanation lies in the kilowatt hours of electricity sold, which has declined from an average of 53,522 per customer in 1996 to 42,825 in 2011.

While this trend is not universal among electric utilities in Arkansas, it does mirror a national trend toward energy efficiency. The U.S. Department of Energy’s Energy Information Administration reported that average household consumption of all forms of energy has declined by more than 30 percent over the past three decades, despite tremendous growth in the use of electronic equipment and appliances. (The prevalence of central air conditioning among U.S. households almost tripled from 23 percent in 1978 to 61 percent in 2009.)

In 2011, according to the EIA, the average monthly electric bill for residential customers in Arkansas was $106.27. That was slightly below the national average of $110.14 despite having average monthly consumption (1,179 kwh) that was 25 percent above the national average (940 kwh). Residential customers in Arkansas paid an average of 9.02 cents per kwh in 2011 compared with the national average of 11.72 cents per kwh.

Entergy Arkansas by the Numbers

Assessable Revenue $1,619,950,429 $1,575,842,188 $1,754,923,813 $1,758,436,618 $1,698,661,729 $1,693,861,238
No. of Customers 681,315 685,497 688,965 690,498 694,109 695,393
KWH Per Customer 46,879 45,523 45,121 45,673 44,238 42,825