Carroll Electric seeks rate hike

Tuesday, September 25, 2012

CARROLL COUNTY -- Customers of Carroll Electric Cooperative Corporation could see their bills increase as much as 9 percent next year, if two proposals pending with the Arkansas Public Service Commission are approved.

On Monday, the cooperative filed a request for a rate increase with the commission. This request came on top of another, filed on Aug. 1.

The earlier request had been made by the Arkansas Electric Cooperative Corporation -- the company from which Carroll Electric purchases power -- and is still being reviewed by the commission. Arkansas Electric is seeking to increase the wholesale prices they charge their member cooperatives.

The company is doing so, in part, to help cover the costs of additional power generating capacity. Forest Kessinger, manager of rates and forecasting for Arkansas Electric, said the company plans to purchase a natural gas powered plant and is already committed to a 11.667 percent interest in another, coal-fired plant. The latter plant, known as the Turk plant, is supposed to begin operations at the end of 2012, Kessinger said.

In anticipation of this increase, Carroll Electric and 15 other cooperatives throughout the state filed concurrent requests to pass added costs to consumers, according to documents filed with the commission.

These documents indicate those costs would amount to a rate increase of about 5.23 percent for Carroll Electric customeers. For the average residential consumer, defined by Arkansas Electric as using 1,249 kilowatt-hours per month, this would result in $3.31 more on the electric bill each month.

The commission must rule on the request by Oct. 30. They have not yet reached a decision. However, in testimony presented last week, representatives for the commission and the Arkansas Attorney General's Office did not object to the request.

Regina Butler, senior rate case analyst for the commission, recommended that the state approve the increase, and economist William Marcus, speaking on behalf of the Attorney General did not object, either.

Even if the commission decides to deny Arkansas Electric's request, Carroll County citizens may still have to reach a little deeper into their pockets next year.

On Monday, Carroll Electric filed an entirely different request with the commission, asking for rate increases beyond those already proposed. Combined with the earlier increase, this would inflate the average residential customer's monthly bill by 9 percent, Carroll Electric spokesperson Nancy Plagge said.

"Despite the cooperative's best efforts to control expenses, the fact is, the cost of operating an electric system has significantly increased over the past decade," Plagge wrote in a Sept. 1 press release. "Carroll Electric added $267 million in assets during this time period, building and improving the backbone of its system to adequately provide electricity to its 88,000-plus consumers."

According to the application filed by Carroll Electric, the rate increase is designed to provide $3,435,144 in additional revenue.

John Bethel, executive director of the Arkansas Public Service Commission, said the later request still had to pass muster with commissioners. If approved, the new rates would take effect on or after February 1, 2013.

Consumers have until then to voice any objections to the commission, he said. If 10 percent of cooperative members were to do so, the proposal would have to pass through a more strenuous review, he said.

However, Plagge suggested that opposing the increase might be more costly to consumers in the long run -- given added costs associated with the longer process.

"I wouldn't be smart enough to speculate on how that might affect our rates," she said.

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