Stalled energy bill advances out of Arkansas Senate

Yahoo

13-03-2025

Republican Sens. Jimmy Hickey and Missy Irvin listen at their colleagues cast their vote for Senate Bill 307 on March 12, 2025. (Antoinette Grajeda/Arkansas Advocate)
Arkansas lawmakers on Wednesday approved an amended bill to streamline the process for building electricity-generating plants in the state, one week after rejecting the original proposal.
Lead sponsor Sen. Jonathan Dismang, R-Searcy, said Senate Bill 307 aims to mitigate the spike in rates expected as a result of purchasing or generating new energy that will be needed for the state's growing population and the closure of at least two coal-fired plants in the next five years.
After the Arkansas Senate rejected SB 307 last Wednesday, senators on Thursday approved a motion by Sen. Jimmy Hickey, R-Texarkana, to request recommendations on the bill from the Arkansas Public Service Commission. Hickey told the Advocate the utility commission's analysis 'mostly definitely helped' and resulted in 12 pages of amendments for the 63-page bill.
'It's a very complicated subject, as we keep saying,' he said. 'I know that I put the PSC probably in an untenable position because you've got legislators wanting certain things and the other ones the other way, but again, they're our regulatory agency who's been doing it. So I just felt that they had to weigh in.'
Arkansas lawmakers request energy bill recommendations from utility commission
Hickey helped craft one 'important' amendment that states if at any time during the construction process the commission finds any costs were not 'prudently incurred,' the PSC shall order those costs to be refunded to customers through bill credits.
'Just thought that was going to be an extra good guardrail or another good tool for them to keep everybody on the up and up,' he said.
The process outlined in SB 307 is already being implemented in surrounding states, though Dismang said he's not sure they have 'this extensive amount of parameters in place.'
Dismang explained last week that under the current model, interest is accrued during construction and then capitalized, creating 'a significant jump in rates' once the power plant is operational. SB 307 recommends another option that would allow utilities to begin recovering costs incrementally during construction by enabling 'a strategic investment' that he said would result in a 'lower, long-term recovery rate for consumers.'
Arkansas could 'pretend like we don't have to do something,' but inaction would leave the state 'at the mercy' of neighboring states that have decided to create new power, Dismang said.
'I want Arkansas to be a leader in every possible way, and this sets us up to be a leader,' he said. 'Rates are going to go up because we have to create new power or we're going to have to buy new power from someone else. I want to be in control of that.'
Sen. Mark Johnson, R-Ferndale, who noted he supports developing new sources of generation, said Dismang's amended bill was 'better, but it still ain't good' because it doesn't adequately protect ratepayers.
Johnson also said he's not opposed to economic development and it's 'insulting' to imply otherwise about people who question the bill's proposed financing method.
'I believe the economic development aspect of this legislation is effectively a Trojan horse, a vehicle to disguise the weakening of the Public Service Commission's ability to protect consumers and to determine a fair rate of concern,' he said.
Proponents of the bill have said it will create jobs by making Arkansas more competitive in attracting industry to the state, such as data centers that may require a lot of energy to operate.
Speaking in favor of SB 307, Sen. Dave Wallace, R-Leachville, said the state will soon lose power from coal-powered plants that helped Arkansas weather an ice storm a few years ago, while residents in neighboring states struggled with long-term outages.
'We're here to protect the people of Arkansas. Sometimes we have to make hard choices,' Wallace said. 'If we don't have those power plants, if we don't do something now, two years from now is going to be too late.'
SB 307 passed by a vote of 23-9. Republican Sens. Hickey of Texarkana and Ricky Hill of Cabot voted for the bill Wednesday after voting against it last week. Sens. Steve Crowell of Magnolia, Jim Dotson of Bentonville and Reginald Murdock of Marianna also supported SB 307 after not voting last week. Sen. Dan Sullivan, R-Jonesboro, switched his present vote to one of support.
The bill's emergency clause, which would allow the law to go into effect immediately, failed to garner enough support on the first try before reaching the 24-vote threshold on a second vote. SB 307 will next be debated by a House committee.
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