Tis the Season for Rate Hikes

December 2, 2009

Southwestern Electric Power hikes rates in Ark.


The Associated Press

2:20 p.m. Wednesday, November 25, 2009


LITTLE ROCK, Ark. — Southwestern Electric Power Co. has won regulatory approval for two rate hikes for its Arkansas customers.

SWEPCO said Wednesday that a base rate increase in December will raise residential bills by 5 percent, or $3.84 for a customer using 1,000 kilowatt hours per month. A second increase will go into effect upon completion next summer of a 508-megawatt, natural gas-fueled power plant in Shreveport, La. To help pay for the $386 million plant, Arkansas customers will see an increase of 4¼ percent, or $3.17 a month for 1,000 kilowatt users.

Combined, SWEPCO customers will pay 9.41 percent more for electricity, or $7.01 per month for 1,000 kilowatt users. That comes to $84 per year. The total is less than half that SWEPCO originally sought.

SWEPCO withdrew an increase it requested to pay for the $1.6 billion coal-fired electric generation plant it is building in southwest Arkansas. The Arkansas Court of Appeals in June rejected the permit the PSC granted for the John W. Turk plant in Fulton County.

"If the certificate for the Turk Plant is confirmed by the Arkansas Supreme Court, SWEPCO will return to the APSC with a request for recovery of financing costs during construction of the plant," the company said in a news release.

The PSC approved a settlement agreement that provided lower rate hikes than SWEPCO had sought. SWEPCO originally wanted $53.9 million, including $25.3 million for cost-of-service and $28.6 million for recovery of financing costs for building the Stall Unit in Shreveport and the 600-megawatt Turk Plant. Customers would have paid 17.7 percent more — $15.43 per month or $185 per year — under the original request.

SWEPCO, a unit of American Electric Power, has 113,500 Arkansas customers.

The 5 percent increase is for the utility's base rate, which covers costs of building, maintaining and operating the company's electric system. Fuel cost isn't included in that rate, which is the source of most rate hikes.

SWEPCO says the base rate increase is its first since 1985.

Wayne Young
404-200-5166 Phone

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