Arkansas Regulatory Updates
Updates from Arkansas Advanced Energy Association
“Entergy is also asking the Commission to authorize a higher return on equity, or the profit shareholders earn on the utility’s investments. That’s particularly significant because Arkansas recently expanded Construction Work in Progress (CWIP), allowing the company to begin recovering the cost of major generation projects before the projects even start construction. One of the traditional arguments for a higher return is that investors assume greater financial risk. But when customers begin paying earlier through CWIP, much of that construction risk is shifted away from investors and onto ratepayers. We believe the Commission should carefully consider whether a higher shareholder return is justified when customers are already bearing substantially more of the financial risk.”
Entergy Arkansas has filed its first rate case (26-001-U) in ten years with the Arkansas Public Service Commission.
What Arkansas residents need to know:
Entergy Arkansas is requesting an increase in its revenue. The utility’s approved return on equity (ROE) is currently 9.65%; they’ve asked for their ROE to be increased to 9.85%(volume 1, page 2).
Entergy Arkansas claims the percentage increase in rates for Arkansas residents is 0.0%(volume 1, page 2). However, after our team at Arkansas Advanced Energy Association ran the numbers of their proposed changes(volume 7, page 4),, we arrived at a 4.9% increase for Arkansas residents.
The proposal also raises rates by more than seven percent for many small businesses under the Small General Service rate class, and our review of the agricultural irrigation rate indicates farmers could see increases approaching 12 percent.
EAL is proposing a new Low-Income Qualified Discount Rider (“LQDR”) that provides eligible residential customers a 50 percent reduction in the monthly customer charge. On page 43 of the Direct Testimony of Matthew Klucher, Entergy’s Director of Utility Rates & Pricing, Regulatory Compliance, Klucher explains the math: “To incorporate the LQDR into the residential rate design the Company first estimated the number of customers that would potentially be eligible for the LQDR. I then applied the discounted rate to the estimated number of customers. This resulted in a decrease in revenues for the residential class. To maintain revenue neutrality, I increased all rate components in the residential class by the same percentage that resulted in revenues equal to the proposed revenues recommended above. All non-eligible LQDR customers, regardless of usage, will have an increase in their total bill of approximately 0.84 percent.” TL,DR: Non-eligible customers are subsidizing the LQDR. You can see the low-income customer charge on this spreadsheet(volume 7, page 4).
Consider the rate case is only one of three increase requests this year: a 4.54% Formula Rate Plan increase went into effect in January 2026 and the Generating Arkansas Jobs Act (3%) Rider also went in effect in June 2026. If this rate increase were approved and implemented, by 2027 Arkansans will have seen an almost 12% rate hike since December 2025.
Procedural Schedule
July 29: Public Comment Hearing in Little Rock in the Commission Hearing Room of the Commission building (1000 Center Street, Little Rock, Arkansas, 72201) at 6:00pm.
August 5: Direct Testimony (staff and intervenors)
September 2: Rebuttal Testimony (EAL)
October 2: Surrebuttal Testimony (staff and intervenors)
October 13: Sur-Surrebuttal Testimony (EAL)
October 20: Public Comment Hearing in Batesville
October 23: Issues List or Settlement
October 27: Public Comment Hearing in El Dorado
October 29: Opposition to Settlement
November 4-5: Evidentiary Hearing at the Commission Hearing Room of the Arkansas Public Service Commission building at 9:30am.
Other Important Dockets
26-008-TF
Entergy also filed a Generate Arkansas Jobs Act Rider (26-008-TF) update in a separate Docket intending to create a rider charge for the Construction Work in Progress too be added to existing bills. The Association is a party to this Docket.
The APSC has approved the update submitted by Entergy for the upcoming year. The APSC did not make a ruling on legal issues surrounding the timelines and requirements of a statutory deficiency versus a tariff deficiency. The APSC did decide that the GAJA does not require that PSC to make a finding or determination that a particular investment is a “strategic investment” to qualify for inclusion in the GAJA rider accepting Entergy’s argument that they pleaded sufficiently to claim an investment as “strategic” even without a PSC ruling.
Additionally, Entergy submitted information to the APSC for the annual report that the APSC will make to the Arkansas Legislative Council that shows the generation mix currently in use, as well as the anticipated annual and total costs for the strategic investments identified in this annual update.
26-009-U
The Public Service Commission has opened a Docket (26-009-U) to investigate Entergy’s treatment of production tax credits and their impact on the rate base for Entergy’s consumers as well as other investment tax credits and their treatment for the rate base of Arkansas consumers. The Association has moved to intervene in this Docket to represent the interests of Advanced Energy in Arkansas.
07-016-U
Entergy submitted its Integrated Resource Plan Midcycle Update to the APSC.
26-042-U Affordability
The APSC has opened a docket to address affordability and cost containment for customers specifically seeking comment and testimony on large load tariffs, time of use programs, and performance-based ratemaking. The Association is working to prepare information and potential testimony for this docket to supplement the work in 26-001-U.