Arkansas Bill Would Let Utilities Promise Power to Attract Big Business

Buddy Hasten (Photo provided)

Gov. Sarah Huckabee Sanders supports a bill before the state Legislature to let utilities build new power plants to serve incoming economic development projects and recover their costs more quickly.

Sen. Jonathan Dismang, R-Searcy, filed the legislation late last month after state Commerce Secretary Hugh McDonald and Energy and Environment Secretary Shane Khoury helped craft its provisions. McDonald is a former Entergy Arkansas CEO.

The legislation would let utilities promise big blocks of power to companies looking to put operations in Arkansas and create rate structures to pay for delivering the electricity.

Ratepayers and big power users have objected, saying rates will surely rise, but Dismang said at a news conference Feb. 26 that utilities must be free to “generate new energy … allowing us to seize the strategic opportunities that come our way.”

Entergy Arkansas and the Arkansas Electric Cooperative Corp. support the bill, Senate Bill 307.

AECC President and Chief Executive Buddy Hasten told Arkansas Business that neighboring states have used similar approaches to land huge projects like an Amazon data hub in Mississippi.

“There’s a lot of desire to bring economic development opportunities to Arkansas, while at the same time you’ve got to build the infrastructure to support it,” Hasten said. “And how do you do that in a way that still ensures that the Arkansas Public Service Commission has oversight? And then you asked a question, who pays for all this stuff, right?” The cooperative philosophy is for the entity that caused the cost to pay it, he said, suggesting the projects themselves should largely foot the bill.

Hasten said the bill would let utilities create novel rate structures to pay for new generation.

“We’ve never gone off and collected money in advance for a power plant, never at AECC,” Hasten said. “So I see this legislation as reducing regulatory timelines — not lowering the bar, but definitely making it so that we’re all required to do the work necessary to get over the bar faster, to speed up the sort of the review and approval process.”

Qualifying investments might include power plant upgrades and new plants, even modular nuclear reactors, long a dream of Hasten’s.

Entergy Arkansas Chief Executive Laura Landreaux told the Arkansas Democrat-Gazette, which broke the story before the bill’s introduction, that the legislation would speed up new power generation.

“If we don’t have better tools, we’re going to miss opportunities, and that’s not what anyone wants,” Landreaux said.

Matt Ramsey, Entergy’s communications manager, said in an email that SB 307 would give Arkansas an advantage in competing for major job-creating investments.

“This framework will help utilities, our state and our communities speak more confidently in meeting existing and prospective companies’ interests in investing in Arkansas,” he said.

“This approach will also provide long-term savings for customers in contrast to the traditional regulatory approach while delivering lasting benefits for customers. This will help Arkansas grow while keeping rates affordable.”