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SWEPCO Requests New Arkansas Rates

Background

On July 23, 2021, SWEPCO submitted a request to the Arkansas Public Service Commission (APSC) to update our prices. We seek to recover environmental and resiliency costs associated with providing customers cleaner and more reliable energy.

The $85 million request includes recent investments in transmission and distribution facilities. It reflects costs to operate and maintain equipment that delivers power to you. It establishes new tariffs for electric vehicles, lighting and other measures.

Benefits For You

It's all about keeping the power flowing to homes and businesses across Arkansas and improving your service. The electric grid is the most complex and universally relied-on machine ever built. Technological innovation, security and resiliency are core components of this backbone that powers more than 122,000 homes and businesses in Arkansas.

Cleaner Energy

We have made significant investments in renewable energy, specifically the North Central Energy Facilities (NCEF) project. This project has environmental and economic benefits for you, saving an estimated $2 billion over the next 30 years.

The Arkansas Public Service Commission (APSC) unanimously approved the project in May 2020.

With no fuel cost for wind, the new wind facilities lower our overall fuel cost for power generation, resulting in savings in the fuel portion of your bills. The fuel savings help to offset the cost of the new facilities, resulting in long-term savings to customers.

Regulatory Process at a Glance

SWEPCO last filed for a base rate case in 2019. This review process is regulated by the APSC and examines the costs for the system that delivers power to you - from the electric poles and wires to the substations and associated maintenance. The regulatory review process requires that the APSC render a decision within 10 months of a utility’s filing for a base rate change.

What's Next

SWEPCO’s application includes a request to increase the company's annual revenue requirement by $85 million to reflect new investments and increased costs. If approved, the total bill for a residential customer using 1,000 kilowatt-hours (kWh) per month would be $122.48, which is an increase of $18.89 per month, or 17%.

FAQS

The new rates will likely take effect in the first billing cycle of June 2022.

Before changing rates, we are legally required to demonstrate that all costs and investments are reasonable and necessary and that pricing structures are fair to SWEPCO’s customers. Rate reviews are standard practice for public utilities in the United States where utility commissions review operations information and financial data. In Arkansas, the APSC reviews this information and determines a reasonable rate for your electric service. All aspects of our pricing and service are subject to regulatory approval.

Base rates refer to the costs of building, maintaining and operating SWEPCO’s electric system. These costs pay for the generation, transmission and distribution system - the power plants, substations, poles and wires you see in your community - along with all of the costs it takes to keep this system running. These costs also include reading meters, producing bills and customer service activities. Base rates do not include the fuel portion of your bill, which pays for fuel and purchased power and is a direct pass-through to customers.

If approved, for a typical residential customer who uses 1,000 kilowatt-hours per month, the increase would be approximately 17% or $18.89/month.

No. The fuel portion of a customer’s bill is the cost of fuel used to generate electricity and the cost of purchased power. It is a direct pass-through to customers and is separate from base rates. The fuel factors used to calculate the fuel charge on a customer’s bill are typically adjusted annually and are subject to review by the APSC.

No. The extraordinary costs of fuel to generate electricity during the February 2021 winter storm are not part of the proposed base rate increase. To minimize the impact on customers’ bills, SWEPCO is spreading the cost over five years, beginning in April 2021, rather than collect the expense in one year as would typically occur in the annual adjustment of factors used to calculate the fuel portion of customers’ bills. For a residential customer using 1,000 kilowatt-hours per month, new fuel factors in effect in April 2021 meant a total bill increase of $7.72, including $6.85 for winter storm fuel costs.

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