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Last Updated: April 2007
03/03: House Bill 1413 was signed by Arkansas State Governor Mike Huckabee in order to allow the state’s electric power producers to form consolidated authorities to manage power generating facilities.
Source: Arkansas Legislature
http://www.arkleg.state.ar.us/ftproot/bills/2003/public/HB1413.pdf
02/03: House Bill 1114 was signed by Arkansas State Governor Mike Huckabee in order to repeal earlier enacted deregulation legislation. The Arkansas General Assembly passed Act 204 and determined that it was in the public’s best interest to continue regulating electric utility rates for the foreseeable future.
Source: Arkansas Public Service Commission
http://www.arkansas.gov/psc/electric3.htm
12/01: The Arkansas Public Service Commission (PSC) submitted its report to the General Assembly pursuant to Act 324 of 2001 on the Development of a Competitive Electric Market and Possible Impact on Consumers on December 20, 2001. The report assessed the progress of restructuring in the Arkansas electric industry. The PSC recommended that the General Assembly either completely suspend the current statute to some future date or repeal the laws related to retail open access. The recommendations were based on the prevailing absence of an operating regional transmissional organization and the lack of evidence that customers, especially residential and small commercial customers, would realize a net price benefit from retail open access. In comments from the PSC staff, it was also stated that in order for competition to exist, improvements to the transmission system were needed to assure that the major load centers in Arkansas have equal and reasonably unconstrained access to generation supplies.
11/01: The Arkansas Public Service Commission (PSC) issued an order that postponed the October 18, 2001, scheduled hearing regarding delaying the implementation of retail competition in Arkansas. The hearing was rescheduled for November 1, 2001.
09/01: A study conducted for the
PSC by energy consultants, La Capra Associates, concluded that the wholesale
markets were not sufficiently developed at the time to support successful
retail competition, nor were the utilities prepared to handle the customer
switching functions necessary under retail choice. The PSC was to hold a
scheduled hearing on October 18, 2001, to consider the views of the PSC staff, utilities, and
consumer groups on further delaying the implementation of retail competition in
Arkansas.
Under current restructuring legislation, the PSC may delay retail access,
scheduled for October 2003, until as late as October 2005. Further delay would
necessitate legislative action.
Source: Arkansas Public
Service Commission
http://www.accessarkansas.org/psc/
08/01: Responding to the requirements of Act 324, which delayed implementation of retail open access until October 2003, but allowed the PSC to further delay open access until no later than October 2005, the PSC issued a request for utilities to provide an analysis of prices customers may pay for electric generation service under open access as compared to continued regulation and to provide information needed to evaluate the readiness of both the retail and the wholesale markets for implementation of retail open access. A public hearing was set for October 18, 2001 to consider these issues.
03/01: Senate Bill 236 was signed into law and included Act 324. Act 324 delayed the start of deregulation from January 2002 to October 2003. The PSC was also authorized to initiate further delays based on the adequacy of the state's transmission system and generating capacity to support a competitive market.
11/00: The Public Service Commission issued the Report on Electric Restructuring to the Arkansas General Assembly on November 29, 2000. The PSC recommended the date for deregulation be extended from the original timeframe in the restructuring legislation of January 1, 2002, through June 30, 2003, to October 1, 2003, through October 1, 2005. The PSC was scheduled to present the report and recommendations to the Joint Insurance and Commerce Committees of the General Assembly on November 30, 2000. The extension was intended to allow more time for the wholesale market to develop and the new federally-regulated transmission organizations to develop and become operational.
10/00: The PSC opened a docket to study the electric power market. The PSC wanted to ensure that the power supply problems and price spikes that occurred in California in the summer of 2000 did not occur in Arkansas when restructuring was scheduled to begin in 2002. The State's utilities suggested delaying the start for competition until October 1, 2003, or October 1, 2005 at the latest. Prevailing legislation required the retail market to open by June 30, 2003 at the latest. The PSC, utilities, and Attorney General's office all agreed that the original timetable was unlikely to be carried out, but disagreed on when competition would begin in the State. The PSC was directed to present its recommendation to the legislature in mid-November 2000.
08/00: In an effort to deregulate by 2002, the PSC asked utilities to examine whether or not they had market power. Once a utility provides an analysis to this inquiry, the PSC was supposed to issue an order determining if, in fact, that utility did have market power. If it is deemed that the utility had market power, it would be required to submit a mitigation plan, followed by a public hearing and a final PSC order to eliminate that market power.
07/00: The PSC released its report on Mandatory Rate Reductions for Electric Utilities on July 13, 2000. According to the report, the state legislature could not pass a comprehensive rate reduction without the direct consent of the utilities and after conducting an economic evaluation. The PSC had the power to determine if a utility's rates' are "unjust and unreasonable." Therefore, residential and small business customers who elect standard service over participation in the retail choice program would not receive a comprehensive rate reduction during the rate freeze period unless the stated criteria was met.
12/99: The PSC issued Rules for Electric Affiliates and for Energy Provider licensing. These rules issued by the PSC were intended to allow the utilities to use Competition Transition Charges (CTC) to recover unmitigatable stranded costs. Furthermore, PSC guidelines stated that the sale of generation assets is one way to quantify stranded costs and/or mitigate stranded costs. Also, the generation portion of the utilities was to be functionally unbundled from the transmission and distribution functions. Afterwards, the PSC was directed to issue a series of reports to facilitate implementation of retail competition. Reports are due on: tax issues and the financial impact on local governments; progress reports on competition and its impact on the price(s) of electricity; and standards of conduct for electric service providers.
05/99: Rates for consumers of utilities seeking to recover stranded costs were to be frozen for 3 years, and, for those not seeking to recover any stranded costs, 1 year.
04/99: Senate Bill 791, a compromise of the two bills introduced in February, was passed by the General Assembly and signed by the Governor. Act 1556 (Bill 791) was intended to restructure the electric power industry in the State and allow retail access by January 2002. Stranded costs were to be recovered via a competitive transition charge and the sale of bonds. Rates were to be frozen for 3 years for utilities seeking stranded cost recovery and one year for those that did not. The PSC was empowered to force divestiture of generation assets to alleviate market power, and PSC was allowed to decide if stockholders should share stranded costs recovery with ratepayers. Utilities were required to functionally unbundle generation, transmission, distribution, and customer service and file unbundled rates with the PSC by January 1, 2000. Municipal utilities were given the option of participating in retail access, and may aggregate retail loads upon filing unbundled distribution rates with the PSC.
10/98: The final report, Report on Restructuring the Arkansas Electric Utility Industry, was released by the PSC. The report recommended retail competition no later than January 1, 2002 and asked the legislature to act in 1999 on restructuring giving the PSC authority to implement retail competition and determine stranded costs and appropriate recovery methods, including securitization.
05/98: The PSC concluded hearings on when and how to open the electric market to retail competition. Entergy and two other utilities agreed competition should not begin before January 1, 2002, when the neighboring States of Oklahoma and Texas were expected to open their markets.
12/97: The PSC decided to conduct public hearings in 1998 to address restructuring issues. Four dockets were established to investigate the specific issues. A report with recommendations was due to the General Assembly by October 1998.
12/97: Arkansas PSC agreed to Entergy's restructuring plan. The plan included rate reductions of about $217 million over 2 years; debt reduction of $165 million over 5 years on the Grand Gulf Nuclear Station; and creation of a special Transition Cost Account to be used to collect funds for stranded costs recovery. In Entergy's restructuring plan, the Transition Cost Account to be used for funds for stranded costs was to be funded by excess earnings above 11 percent return on equity during the rate freeze period (at new levels through 2001).
04/97: The General Assembly requested, with Senate Resolution 24, a study on competition in the electric industry. A series of hearings were held through 1998 and a report was to be completed by January 1999.