Entergy Arkansas plans 7.5% rate hike blaming higher natural gas prices


Customers of Entergy Arkansas can expect to see a 7.5% hike in their rates as the company has gone to the Arkansas Public Service Commission asking for permission to raise rates.

The company announced it had made a filing with the commission to increase the Energy Cost Recovery (ECR) rate April 1. The ECR accounts for roughly 9% of a residential customer’s total monthly bill.

The ECR charges appear on the bill as “Fuel and Purchased Power Cost.” It is normally adjusted each spring and fluctuates depending on changes in the cost of fuel used by Entergy Arkansas to generate electricity and wholesale prices paid for additional electricity.

The ECR will increase from $0.00959 per kilowatt hour to $0.01785 per kWh, or from the current rate of just under 1 cent per kWh to 1.8 cents beginning with April 2022 billing. This rate will be effective through March 2023, unless an interim adjustment is needed.

“The total increase that customers could see on their bill will vary based on their individual energy usage and the kilowatt-hours consumed at their home,” said Ventrell Thompson, acting vice president of customer service. “Our estimates show, however, that the average residential customer who uses 1,000 kilowatt hours per month will see a total bill increase of 7.5%, or roughly $8.”

Customers received a decreased ECR rate the last two years, and the 2021 ECR rate currently in effect ($0.00959) is the lowest the rate has been in more than 10 years. Natural gas has historically been a lower cost source, officials said. However, natural gas prices were 93% higher in 2021 compared to 2020, according to the industry standard Henry Hub.

“At Entergy Arkansas, we carefully plan and invest our resources to provide reliable power and keep rates as low as possible,” said Kurt Castleberry, director of resource planning and market operations. “Fuel diversity pays off and so does our investment in our nuclear fleet to keep them producing electricity at historically high levels.

“Last year, our nuclear generation sources set a record,” he continued. “Low cost, emission free power provides about 70% of the electricity our customers consume to help insulate them from the cost swings of natural gas. This kept the ECR rate from going even higher.”

Source: press release