What Is Entergy Formula Rate Plan

As for the possibility of raising rates further this year, Palmer said the company`s demand will have little impact on overall rates. The formula`s pricing engine is part of a broader billing mechanism that keeps prices affordable, he said. Cold weather and electricity consumption increased in Arkansas in late December and early January. As a result, some Entergy Arkansas customers have higher than normal utility bills. It also happens that this increase in usage coincides with the new tariffs that have come into effect for 2018. Entergy says the $916,451 rate increase approved by the commission is a drop in the ocean when considering investing in Arkansas to provide affordable electric power. While the new hearing is being considered, Entergy is also pursuing a legislative solution that will send opponents into turmoil, saying the move is an attempt to “make a final round around regulators,” according to Jordan Tinsley, who represented a group of corporate consumers who opposed Entergy`s rate hike. The December 15 order states: “The Commission remains concerned that the application of the PRF statutes could lead to sustained annual increases in interest rates close to or in line with the four per cent ceiling. The Commission expects all utilities to control their costs in a prudent and reasonable manner and not to use the FRP as an automatic annual rate increase of four per cent. At the Commission, Personnel Director Donna Gray noted that staff agreed with the consumer group that the revenue generated in 2019 should offset Entergy`s demand for a price increase. Starting in January, there was a nominal rate hike in another element of the bill called the Formula Rate Plan Rider. In this case, Arkansas electric power consumers and PSC employees say the revenue generated by Entergy from the 2019 adjustment should be applied to the 2021 rate hike.

That`s not the case, entergy says. The company is asking lawmakers to clarify the intent of the legislation that established the rate plan process, said David Palmer, director of regulatory affairs at the Electric Utility. “They recruited Senator Rice to overturn the commission`s decision in order of 40,” Tinsley said, referring to the decision that reduced Entergy`s tariff demand. “And that would make the interest claim retroactive — which would mean that in the middle of a pandemic, we`d get a 3 or 4 percent rate hike that we wouldn`t normally get because Entergy has lawmakers carrying their water in a case they lost to the commission.” Looking at the global accounts, which include many components, the net increase in rates for private customers from December 2017 to January 2018 was 5.61%. On bills for 1,000 kWh of use, it is $5.80. For example, when Entergy submitted the rate plan evaluation formula in July, it included actual costs and expenses, known as the “offset adjustment” for 2019 and projections for 2021. Forecasts for this year prompted the company to request the rate hike for 2021. The issue revolves around an annual tariff formula procedure (PIB) established by state law that allows Entergy to make an annual request for a base rate increase of no more than 4%, although increases must be weighed against costs, expenses, and revenue gains.

The regulatory mechanism was put in place to protect customers from sharp price increases within a year and to give the company assurance that it would be able to cover expenses and investments related to infrastructure improvements in the state. Entergy Arkansas is again challenging the Public Service Commission over the utility`s offer to add about $68 million to fee payers` bills after state regulators halted their efforts. Entergy Arkansas provides its customers with assistance with their bills in the event of an emergency. Billing support options can be found on the website: www.entergy-arkansas.com/your_home/help.aspx. Customers can call 1 800.ENTERGY at any time for options. State regulatory commissioners ruled that Entergy`s tariff did not justify the requested tariff increase. Entergy and the Regulatory Commission have argued several times this year over tariffs, including how the company should reimburse solar customers and a request from the company to increase rates in Arkansas by $135 million to recover payments to its sister utilities. Entergy, Palmer said, applied the same procedures each year it applied for recovery under the formula tariff plan, and the Commission and other parties such as the consumer group agreed to allow offsetting adjustments, just like the one used this time. “The question is there to determine the legislative intent, which turned into a rather controversial $68 million dispute,” he said. The simplest and most immediate relief for bill spikes is the move to tiered billing.

Medium-level billing invoices over 12 months, so each monthly invoice is close to the same amount. Learn more and sign up on our website: entergy.com/save_money/levelbilling/ “Overall, adjusting the offset has allowed us to make significant investments while keeping the overall bill at a 1% annual growth rate,” Palmer said. Entergy intends to provide investors with important updates on regulatory procedures and key milestones in executing our strategy. While some of this information may be considered important, investors should not rely solely on this site to obtain all relevant information about the company. Under the terms of the formula`s rate plan, Entergy New Orleans will not challenge the adjustment of the board`s advisors` $49.5 million rate increase. In the Company`s initial filing, a $64 million rate increase was requested. In addition, the New Orleans City Council passed a resolution to introduce a loan of about $17 million. Arkansas electric power consumers say the revenue generated in 2019 should be applied to the company`s demand for increased revenue for 2021. “That`s more than $67 million in revenue that should be used to keep bills low for fee payers,” Tinsley said.

“Every payer of payment in the State is affected by this decision.” In the formula-setting plan process, Entergy provides the commission with expenses and revenues each year that include two key aspects: a review of the previous year`s actual costs and projections for the coming year. The formula tariff plan process involved in the current dispute was introduced by Law 725 of 2015 to ensure that customers` tariffs are not higher than necessary so that the utility can cover its costs and obtain a sufficient return to attract capital. .