SHREVEPORT, La. - Southwestern Electric Power Company filed a settlement agreement Wednesday with the Arkansas Public Service Commission in its request for new base rates.
Under the settlement, an Arkansas residential customer using 1,000 kilowatt-hours per month would see an overall bill increase of approximately $8.54 per month, or 8.8%.
If ultimately approved, the settlement agreement provides a net annual increase of $24.1 million in non-fuel base rates. New rates would go into effect with the first billing cycle of January 2020
SWEPCO had originally sought a net annual increase of $45.6 million plus $12 million for additional vegetation management.
Along with SWEPCO, parties to the settlement are APSC General Staff, Attorney General of Arkansas, Board of Trustees of the University of Arkansas, Walmart, Western Arkansas Large Energy Consumers and Sierra Club.
Base rates refer to the costs of building, maintaining and operating SWEPCO's electric system, including power plants, transmission and distribution lines and facilities. Base rates do not include the fuel portion of the customer's bill, which pays for fuel and purchased power, which is a "pass-through" to customers with no profit to the company.
A settlement hearing is scheduled for Oct. 21 at the APSC building in Little Rock. Public comment hearings are scheduled for Oct. 24 in Ashdown, Arkansas, and Oct. 29 in Fayetteville, Arkansas.
The settlement agreement includes approval of a formula rate plan for a five-year term. Under the settlement, $28.9 million for costs now recovered through separate charges, or riders, on customers' bills will be moved into base rates. These costs include additional power-plant environmental controls completed between 2013 and 2016 to meet federal mandates and construction of a natural gas plant, completed in 2010.
SWEPCO serves 536,300 customers in three states, including 119,800 in Arkansas.