Arkansas legislative panel moves 'strategic energy infrastructure' bill forward
Robert Birch, director of economic development for Jacksonville, Arkansas, talks about the benefits of Senate Bill 307 at the Senate Insurance and Commerce Committee meeting Thursday, Feb. 27, 2025. At right are Sens. Matt McKee, R-Pearcy, and Jonathan Dismang, R-Searcy, both sponsors of the bill. (Screenshot from Arkansas Senate livestream)
An Arkansas Senate panel on Thursday advanced a bill that would streamline the process for utility providers to build new electricity-generating plants to meet expected demand.
Sponsors and supporters of Senate Bill 307 touted it as a necessary tool for making the state more competitive in attracting new industry and creating jobs.
The Senate Insurance and Commerce Committee approved the bill by unanimous voice vote despite some members' concerns about how quickly the 62-page, highly technical bill seemed to be moving through the legislative process.
'It's just too quick and too fast,' Sen. Reginald Murdock, D-Marianna, said, expressing concern that constituents' questions might go unanswered. 'We're not ready to land this plane.'
Republican Sen. Jonathan Dismang of Searcy, the bill's chief sponsor, assured Murdock there would be plenty of time for questions to be answered. He said there have been thorough discussions with the Public Service Commission and others for some time as the bill was being drafted.
The bill was filed at about 5 p.m. Wednesday and moved onto the committee's agenda overnight. It likely will be discussed on the Senate floor Monday.
'We need new [power] generation in Arkansas,' Dismang told the committee as he explained the bill. 'We owe residents back home a dependable, reliable amount of generation, and we need to do what we can to achieve that.'
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Arkansas derives nearly 40% of electricity from natural gas-fired power generators and about 27.5% from coal-fired plants, according to data from the U.S. Energy Information Administration (EIA). At least two of the state's five coal-fired plants are scheduled to be shut down by 2030.
The EIA projected last month that electricity demand will grow by 2% this year and 1% in 2026 after rising 3% last year.
Dismang said lawmakers and consumers need to recognize that new energy generating facilities will cause the cost of energy to rise.
'That's just a truth. It's going to happen,' he said. 'We need new generation, and it's gonna cost more money. The question is how are we going to pay for that. This proposal gives us a new path, one that I believe is more efficient, provides more oversight than the current structure we have and will ultimately lead to a lower overall cost for the implementation of new generation.'
Sen. Matt McKee of Pearcy, a co-sponsor of SB 307, agreed with Dismang that new sources of energy production are needed.
'How do we do that with the least impact to the ratepayers' is key, he said. 'It's my belief this bill is how we protect ratepayers, whether they're industrial users or people on fixed income in Hot Springs Village that I represent. This is how we assure the costs are mitigated.'
The legislation lays out how utilities, including electric cooperatives, can recover costs for 'strategic investments,' defined as infrastructure that helps economic development projects that create jobs. And it outlines a shorter timeframe for the Public Service Commission to review and act on rate proposals arising from those projects.
Four economic development professionals spoke in favor of the bill, saying that the first question site selection consultants ask is no longer about taxes or labor pool and training but about the availability of power.
'Projects ask, 'Can you provide the power?'' Jacksonville Economic Development Director Robert Birch told the committee. The next question asked, said Brad Lacy of the Conway Chamber of Commerce, 'is how quickly can you get it?'
'We put ourselves at a disadvantage if we don't act. This is our best opportunity to put us on a competitive path,' Birch said.
'States and communities that move the fastest [in developing new power generating infrastructure] win,' said Jack Thomas of the Little Rock Chamber.
He and other economic development specialists cited unnamed projects the state might miss out on because of an inability to meet projected power needs.
'One project in development now would use four times the power the entire city of Conway uses,' Brad Lacy of the Conway Chamber of Commerce told the committee.
Cliff Chitwood, president of the Mississippi County Economic Development Commission, said the county might miss out on one project because its projected power needs a total of one gigawatt.
Three women who said they are member customers of Petit Jean Electric Cooperative urged the committee to slow its consideration of the bill and said it loosens oversight of cooperatives like Petit Jean. The cooperative's utility rates are already a burden on income-limited residents in the rural counties Petit Jean serves, they said.
'The bill as written stops the PSC from even investigating what's going on,' Petit Jean customer Terry Christy said. She told committee members that customers have filed complaints about high utility bills.
Committee chair Sen. Blake Johnson of Corning and Dismang disagreed, saying the legislation allows for more oversight. The bill lowers the threshold of signatures on petitions seeking Public Service Commission action on rate increases. It also caps the rate increase cooperatives can seek at 5% over 12 months. Current law limits cooperatives' rate increases to 8% over 24 months.
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