Arkansas Senate Bill SB307 Draft / Bill

                    Stricken language would be deleted from and underlined language would be added to present law. 
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State of Arkansas     1 
95th General Assembly A Bill     2 
Regular Session, 2025  	SENATE BILL 307 3 
 4 
By: Senators J. Dismang, M. McKee, J. Boyd, S. Flowers, R. Murdock, B. Johnson, B. Davis, Hester, 5 
Gilmore 6 
By: Representative Eaves 7 
 8 
For An Act To Be Entitled 9 
AN ACT TO AMEND THE LAW CONCERNING PUBLIC UTILITIES; 10 
TO CREATE THE GENERATING ARKANSAS JOBS ACT OF 2025; 11 
TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES. 12 
 13 
 14 
Subtitle 15 
TO AMEND THE LAW CONCERNING PUBLIC 16 
UTILITIES; TO CREATE THE GENERATING 17 
ARKANSAS JOBS ACT OF 2025; AND TO 18 
DECLARE AN EMERGENCY. 19 
 20 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21 
 22 
 SECTION 1.  Arkansas Code § 23 -3-201(a), concerning requirements for 23 
new construction or operation of equipment or facilities, is amended to read 24 
as follows: 25 
 (a)  New construction or operation of equipment or facilities that are 26 
located within this state for supplying a public service or the extension of 27 
a public service within this state shall not be undertaken without first 28 
obtaining from the Arkansas Public Service Commission a certificate that 29 
public convenience and necessity require or will require the construction or 30 
operation within this state. 31 
 32 
 SECTION 2.  Arkansas Code § 23 -3-201(b), concerning when a certificate 33 
of public convenience is not required, is amended to add additional 34 
subdivisions to read as follows: 35 
 (3)(A)  A public utility shall provide notice to the commission 36    	SB307 
 
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of the public utility's intent to recover any strategic investments that are 1 
subject to this subchapter through a rider under the Generating Arkansas Jobs 2 
Act of 2025, § 23-4-1301 et seq. as part of the public utility's application 3 
under this subchapter. 4 
 (B)  To the extent a member cooperative of a generation and 5 
transmission cooperative is exempt from the requirement to obtain a 6 
certificate of public convenience and necessity under subsection (b) of this 7 
section, the exemption shall extend to the generation and transmission 8 
cooperative. 9 
 (C)  An exemption claimed by a public utility under this 10 
section or under § 23 -18-504(a)(5) does not bar: 11 
 (i)  The public utility from voluntarily seeking the 12 
issuance of a certificate of public convenience and necessity under this 13 
section; or 14 
 (ii)  The commission from: 15 
 (a)  Granting the public utility the 16 
certificate of public convenience and necessity sought under subdivision 17 
(d)(1) of this section; and 18 
 (b)  Allowing the public utility to seek 19 
recovery of the reasonable cost of the equipment or facilities through rates. 20 
 21 
 SECTION 3.  Arkansas Code § 23 -3-201, concerning requirements for a 22 
certificate of public convenience and necessity, is amended to add an 23 
additional subsection to read as follows: 24 
 (e)  As used in this section: 25 
 (1)  "Generation and transmission cooperative" means the same as 26 
defined in § 23-4-1101; 27 
 (2)  "Major utility facility" means the same as defined in § 23 -28 
18-503; and 29 
 (3)  "Strategic investments" means the same as defined in § 23 -4-30 
1303. 31 
 32 
 SECTION 4.  Arkansas Code Title 23, Chapter 3, Subchapter 2, is amended 33 
to add an additional section to read as follows: 34 
 23-3-207.  Issuance of certificate of public convenience and necessity. 35 
 (a)  If the Arkansas Public Service Commission determines that granting 36    	SB307 
 
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a certificate of public convenience and necessity is consistent with the 1 
public interest, the commission shall enter an order granting a certificate 2 
of public convenience and necessity within six (6) months after the public 3 
utility submits an application for a certificate of public convenience and 4 
necessity. 5 
 (b)(1)  If the commission determines that granting a certificate of 6 
public convenience and necessity is not in the public interest, the 7 
commission shall enter an order denying the certificate of public convenience 8 
and necessity. 9 
 (2)  In the order entered by the commission under subdivision 10 
(b)(1) of this section, the commission shall discuss: 11 
 (A)  The basis for the commission's findings; and 12 
 (B)  Any evidence or other information submitted by the 13 
public utility as part of its notice or application that the commission deems 14 
to be insufficient. 15 
 (3)(A)  If a public utility submits additional evidence or other 16 
information to the commission demonstrating that the strategic investments, 17 
as defined in § 23-4-1303, that are subject to this subchapter are 18 
reasonable, necessary, and in the public interest, then the commission shall 19 
enter an order granting the certificate of public convenience and necessity 20 
within thirty (30) days after the date of the public utility’s filing. 21 
 (B)  If the commission finds that the strategic investments 22 
that are subject to this subchapter are not reasonable, necessary, or in the 23 
public interest, the commission shall enter an order denying the certificate 24 
of public convenience and necessity. 25 
 (C)  In the order issued under subdivision (b)(3)(B) of 26 
this section, the commission shall discuss: 27 
 (i)  The basis for the commission's findings; and 28 
 (ii)  Any evidence or other information submitted by 29 
the public utility as part of its notice or application that the commission 30 
deems to be insufficient. 31 
 (D)  The process outlined in subdivisions (b)(3)(B) and (C) 32 
of this section may continue until the commission finds that: 33 
 (i)  The public utility's application complies with 34 
this subchapter; 35 
 (ii)  The public utility withdraws its application; 36    	SB307 
 
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or 1 
 (iii)  The public utility appeals the commission's 2 
decision. 3 
 4 
 SECTION 5.  Arkansas Code § 23 -4-901, concerning definitions used under 5 
a rate case by the Arkansas Public Service Commission, is amended to add 6 
additional subdivisions to read as follows: 7 
 (5)  "Notice" means a written form document, not an application, 8 
that contains only as much information as is needed to provide the necessary 9 
information to the commission and member-consumers as is specifically 10 
required under this subchapter; and 11 
 (6)  "Rate case procedures" means the administrative procedures 12 
and requirements normally required by a co -op when adjusting rates and 13 
charges under §§ 23-4-402, 23-4-405, 23-4-407 — 23-4-418, 23-4-422, and 23-4-14 
620 — 23-4-634 or other applicable statutes and rules of the commission. 15 
 16 
 SECTION 6.  Arkansas Code § 23 -4-902 is amended to read as follows: 17 
 23-4-902.  Exemption from rate case procedures, etc. 18 
 A co-op, as defined in § 23 -4-901, shall not be subject to rate case 19 
procedures and hearings and other requirements of §§ 23 -4-402 — 23-4-405, 23-20 
4-407 — 23-4-418, and 23-4-620 — 23-4-634 and Arkansas Public Service 21 
Commission rules implementary thereof, hereafter referred to as “rate case 22 
procedures”, by the commission Arkansas Public Service Commission unless: 23 
 (1)  By action of its board of directors, the co -op elects to be 24 
subject to rate case procedures by the commission; 25 
 (2)  A proposed change in the co -op's rates and charges exceeds 26 
ten percent (10%) of total gross revenues; 27 
 (3)  Ten percent (10%) of the co -op's member-consumers petition 28 
the commission to apply rate case procedures , and the commission determines 29 
there is substantial evidence indicating that the rates and charges are 30 
unreasonable; or 31 
 (4)  As otherwise provided in this subchapter. 32 
 33 
 SECTION 7.  Arkansas Code § 23 -4-903 is amended to read as follows: 34 
 23-4-903.  Notification of proposed rate change. 35 
 (a) Each co-op not subject to rate case procedures, at least ninety 36    	SB307 
 
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(90) days before the effective date of any proposed rate change, shall notify 1 
the Arkansas Public Service Commission and each of its member -consumers of 2 
the proposed rate change. Notice to the commission shall include a verified 3 
statement showing the then total number of member -consumers of the co-op. 4 
Notice by the co-op to its member-consumers shall: 5 
 (1)  Be in a notice form prescribed by the commission; 6 
 (2)  Be by regular mail and may be included in regular member -7 
consumer billings or in regularly published co -op newsletters provided to its 8 
member-consumers; and 9 
 (3)  Include a schedule of the proposed rate change, the 10 
effective date of the proposed rate change, and the procedure necessary for 11 
the member-consumers to petition the commission to apply rate case 12 
procedures; and 13 
 (4)  Not require a new cost -of-service study, application for 14 
approval, or additional rate case procedure requirement . 15 
 (b)  The commission shall not require or establish additional notice or 16 
filing requirements for a co -op that is adjusting the co -op's rates and 17 
charges under this subchapter and shall certify whether the co -op met the 18 
notice requirements set forth in this subchapter. 19 
 20 
 SECTION 8.  Arkansas Code § 23 -4-905 is amended to read as follows: 21 
 23-4-905.  Petition for relief from rate change — Effect. 22 
 (a)(1) If, by the effective date of the proposed change in rates and 23 
charges, the Arkansas Public Service Commission has received petitions from 24 
fewer than fifteen percent (15%) ten percent (10%) of the member-consumers 25 
requesting that the commission apply rate case procedures, then the 26 
commission shall immediately certify that fact to the co -op.  27 
 (2) The proposed rates and charges shall become effective as 28 
published in the notice to the member -consumers.  29 
 (b) Rates and charges so established shall be in effect for not less 30 
than one (1) year, subject to the procedure provided for in § 23 -4-906. If, 31 
on or before the effective date of the proposed change in rates and charges, 32 
the commission has received petitions from ten percent (10%) of the member	-33 
consumers, then the commission shall notify the co -op that it will initiate 34 
an investigation and may apply rate case procedures under § 23-4-908. 35 
 36    	SB307 
 
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 SECTION 9.  Arkansas Code § 23 -4-907 is amended to read as follows: 1 
 23-4-907.  Commission's jurisdiction not affected. 2 
 Sections 23-4-902, 23-4-903, 23-4-905, and 23-4-906, 23-4-908, and 23-3 
4-909 apply only to rates and charges and shall have no effect on the 4 
Arkansas Public Service Commission's jurisdiction over a co -op as otherwise 5 
provided by law. 6 
 7 
 SECTION 10.  Arkansas Code § 23 -4-908 is amended to read as follows: 8 
 23-4-908.  Authority of commission. 9 
 (a) The Upon receipt of a sufficient number of valid petitions under § 10 
23-4-905, the Arkansas Public Service Commission shall have the authority to 11 
investigate and determine the reasonableness of the change in rates and 12 
charges of each co-op changing its rates and charges pursuant to this 13 
subchapter, within one (1) year of the time of the change in rates and 14 
charges.  15 
 (b) If the commission preliminarily determines that there is 16 
substantial evidence indicating that the rates and charges are unreasonable, 17 
the commission shall have the authority to apply rate case procedures.  18 
 (c)(1) After a hearing thereon, the commission shall have the 19 
authority to modify all or any portion of the changes found to be 20 
unreasonable.  21 
 (2) If, following the hearing, the commission orders a change in 22 
the co-op's rates and charges, the co -op shall not effect a subsequent change 23 
in rates and charges pursuant to this subchapter for a period of twelve (12) 24 
months from the date of the commission order. 25 
 26 
 SECTION 11.  Arkansas Code § 23 -4-909 is amended to read as follows: 27 
 23-4-909.  Apportionment of rates and charges. 28 
 (a)  Upon receipt of a sufficient number of valid petitions under § 23	-29 
4-905, the Arkansas Public Service Commission may inquire into the 30 
reasonableness of the apportionment of rates and charges by a co -op.  31 
 (b) When determining how rates and charges established under § 23 -4-32 
903 are to be allocated among different rate classes, a co -op shall endeavor 33 
to apportion the rates and charges in a manner which reflects consistent 34 
with, as closely as practicable, the costs of providing service to each class 35 
last approved cost-of-service study. 36    	SB307 
 
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 1 
 SECTION 12.  Arkansas Code § 23 -4-1102 is amended to read as follows: 2 
 23-4-1102.  Exemption from general rate case procedure. 3 
 A generation and transmission cooperative may modify its rates and 4 
charges if: 5 
 (1)  At least three-fourths (¾) of its board votes to change its 6 
rates and charges, including a proposed change to cost allocation and rate 7 
design of the generation and transmission cooperative ; 8 
 (2)  A proposed increase in the generation and transmission 9 
cooperative's rates and charges does not exceed five percent (5%) in any 10 
twelve-month period of the total gross revenues of the generation and 11 
transmission cooperative; and 12 
 (3)  Any additional requirements of this subchapter are 13 
satisfied. 14 
 15 
 SECTION 13.  Arkansas Code § 23 -4-1104(a)(2), concerning alternative 16 
procedures for modifying rates and charges of a generation and transmission 17 
cooperative, is amended to read as follows: 18 
 (2)  In addition to an attachment containing the proposed tariffs 19 
to effect the modification of the rates and charges, the application shall 20 
provide the following: 21 
 (A)  Proof of the board vote required by § 23 -4-1102; 22 
 (B)  The proof of notice required by § 23 -4-1103; 23 
 (C)  A current calculation of the generation and 24 
transmission cooperative's: 25 
 (i)  Times interest earned ratio; 26 
 (ii)  Debt service coverage ratio; and 27 
 (iii)  Margins as a percent of revenue for the last 28 
available calendar year; 29 
 (D)  An analysis of the impact of the proposed change in 30 
rates and charges on each member cooperative's cost of wholesale power that 31 
is acquired from the generation and transmission cooperative; 32 
 (E)  Documentary evidence that the impact of the proposed 33 
change in rates and charges does not exceed five percent (5%) of the 34 
generation and transmission cooperative's total gross revenues for the 35 
previous calendar year twelve-month period before the generation and 36    	SB307 
 
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transmission cooperative's notice under § 23 -4-1103(a)(1); 1 
 (F)  Documentation that shows the derivation of the 2 
generation and transmission cooperative's proposed changes in its rates and 3 
charges; and 4 
 (G)(i)  Any other supporting documentation or evidence 5 
required by the commission to validate the requirements of this subchapter . 6 
 (ii)(a)  However, the commission shall not require 7 
the generation and transmission cooperative to prepare a cost -of-service 8 
study. 9 
 (b)  Instead In lieu of voluntarily filing a 10 
new cost-of-service study for approval, the generation and transmission 11 
cooperative shall rely upon the most recent commission -approved cost 12 
allocation. 13 
 14 
 SECTION 14.  Arkansas Code § 23 -4-1105(a), concerning the application 15 
for modification of retail rates, is amended to read as follows: 16 
 (a)  A member cooperative may propose a modification of its retail 17 
rates and charges to incorporate the proposed change in the generation and 18 
transmission cooperative's wholesale rates and charges filed under § 23	-4-19 
1104 if: 20 
 (1)  The member cooperative files its application for a 21 
modification of its retail rates and charges with the Arkansas Public Service 22 
Commission on the same within ten (10) days from the date as the generation 23 
and transmission cooperative files its application for a modification of its 24 
change in wholesale rates and charges under § 23 -4-1104; and 25 
 (2)  The member cooperative apportions its proposed change in 26 
rates and charges in a manner that reflects, as closely as practicable, its 27 
cost of providing service to each class. 28 
 29 
 SECTION 15.  Arkansas Code § 23 -4-1106 is repealed. 30 
 23-4-1106.  Limitation on increase in rates. 31 
 The generation and transmission cooperative shall not increase its 32 
rates and charges under this subchapter by an aggregate total of more 	than 33 
eight percent (8%) during any twenty -four-month period. 34 
 35 
 SECTION 16.  Arkansas Code Title 23, Chapter 4, is amended to add an 36    	SB307 
 
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additional subchapter to read as follows: 1 
 2 
Subchapter 13 — Generating Arkansas Jobs Act of 2025 3 
 4 
 23-4-1301.  Title. 5 
 This subchapter shall be known and may be cited as the "Generating 6 
Arkansas Jobs Act of 2025". 7 
 8 
 23-4-1302.  Legislative findings. 9 
 The General Assembly finds that: 10 
 (1)  Significant strategic investments in electric utility 11 
infrastructure and natural gas utility infrastructure are necessary to enable 12 
this state to: 13 
 (A)  Attract and serve economic development projects across 14 
a variety of industries; 15 
 (B)  Continue reliable support for existing customers by 16 
investing in additions of new electric utility infrastructure and natural gas 17 
utility infrastructure to support growth; and 18 
 (C)  Replace retiring electric generation facilities and 19 
other electric utility infrastructure and natural gas utility infrastructure; 20 
 (2)  Strategic investments to ensure that electric utilities have 21 
adequate dispatchable generation resources to support reliable service for 22 
their customers continue to be a significant element in enabling this state 23 
to attract and serve these economic development opportunities; 24 
 (3)  Strategic investments in electric utility infrastructure and 25 
natural gas utility infrastructure are needed to support the development of 26 
sites designated as available for economic development projects, as these 27 
sites are critical to this state’s economic development efforts; 28 
 (4)  While Arkansas's electric utilities have pursued beneficial 29 
resource acquisition opportunities for their customers, most will need to 30 
construct new electric generating facilities in the near future; 31 
 (5)  Further strategic investments in electric utility 32 
infrastructure are needed to support the license extension for existing 33 
nuclear generation resources and ensure that electric utilities maintain 34 
adequate dispatchable generation resources to support reliable service for 35 
their customers; 36    	SB307 
 
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 (6)  Supporting the continued evaluation of modular reactors and 1 
advanced nuclear technologies to identify opportunities to pursue strategic 2 
investments in those advanced nuclear technologies if it is in the public 3 
interest in considering whether or not those advanced nuclear technologies 4 
become technically feasible, commercially viable, and financially viable or 5 
otherwise beneficial to customers in Arkansas; 6 
 (7)  Economic development projects and the continued provision of 7 
reliable electric utility service and reliable natural gas utility service 8 
are essential to the future of Arkansas; 9 
 (8)  Failure to act now will result in the state's missing 10 
transformational opportunities for economic development, including new 11 
business opportunities as well as the expansion of existing businesses that 12 
may not be available again for many years to come; 13 
 (9)  These prospective and existing businesses are prepared to 14 
invest in electric utility infrastructure and natural gas utility 15 
infrastructure in this state and will provide employment for Arkansas 16 
residents that will benefit the public interest; 17 
 (10)  These prospective strategic investments and the resulting 18 
employment and workforce development opportunities for this state will 19 
produce investment, economic growth and activity, and new state and local tax 20 
revenue that will strengthen communities throughout this state and will 21 
enhance the state’s overall economic vitality and well -being; 22 
 (11)  Existing regulatory frameworks for electric utilities and 23 
natural gas utilities are inadequate and were not designed to enable the 24 
electric utilities and the natural gas utilities to respond timely and make 25 
the required level of strategic investments in electric utility or natural 26 
gas utility infrastructure and the associated expenses, in addition to 27 
maintaining the financial viability necessary to support strategic 28 
investments requiring new infrastructure to serve the residents of Arkansas; 29 
 (12)  Regulatory reform is required to keep pace with the 30 
evolving industry and help ensure that electric utilities and natural gas 31 
utilities are financially sound and able to make the strategic investments to 32 
continue providing customers safe, reliable, affordable, and sustainable 33 
electric utility service and natural gas utility service; and 34 
 (13)  To support economic development in Arkansas, nothing herein 35 
is intended to develop rates that would unreasonably shift costs from a 36    	SB307 
 
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customer or customer class to other customers in a manner that would result 1 
in rates that are not just and reasonable, not consistent with applicable 2 
law, or not in the public interest. 3 
 4 
 23-4-1303.  Definitions. 5 
 As used in this subchapter: 6 
 (1)(A)  "Construction work in progress" means: 7 
 (i)  Materials costs; 8 
 (ii)  Labor costs; 9 
 (iii)  Labor costs adders; 10 
 (iv)  Allowance for funds used during construction; 11 
 (v)  Costs associated with third -party vendors and 12 
consultants; 13 
 (vi)  Costs associated with procurement of real 14 
property rights; 15 
 (vii)  Costs associated with securing all necessary 16 
approvals; 17 
 (viii)  Taxes; 18 
 (ix)  Tax gross-up charges; 19 
 (x)  Capital suspense charges; and 20 
 (xi)  Overheads for any strategic investments that 21 
are not yet complete or in service. 22 
 (B)  "Construction work in progress" includes costs that 23 
are: 24 
 (i)  Recorded under the requirements of the uniform 25 
system of accounts adopted by the Arkansas Public Service Commission by rule 26 
and any applicable accounting guidance issued by the Federal Energy 27 
Regulatory Commission that are adopted by the Arkansas Public Service 28 
Commission by rule; and 29 
 (ii)  In conformance with generally accepted 30 
accounting principles; 31 
 (2)  "Electric distribution cooperative" means a rural electric 32 
cooperative that sells electricity at retail and is a member of an electric 33 
generation and transmission cooperative; 34 
 (3)  "Electric generation and transmission cooperative" means a 35 
rural electric cooperative formed under the Electric Cooperative Corporation 36    	SB307 
 
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Act, § 23-18-301 et seq., that: 1 
 (A)  Does not have a certificated service territory; and 2 
 (B)  Exclusively sells electricity at wholesale; 3 
 (4)  "Investor-owned electric utility" means a public utility 4 
that is engaged in generating, transmitting, delivering, or furnishing 5 
electricity to or for the public for compensation and that is owned by 6 
investors and is not a cooperative; 7 
 (5)  "Investor-owned natural gas utility" means a public utility 8 
that is engaged in the production, transport, delivery, or furnishing of 9 
natural gas to or for the public for compensation and that is owned by 10 
investors and is not a cooperative; 11 
 (6)  "Major utility facility" means the same as defined in § 23 -12 
18-503; 13 
 (7)  "Public utility" means the same as defined in § 23 -1-101; 14 
 (8)  "Rider" means a rate schedule approved by the Arkansas 15 
Public Service Commission to recover one (1) or more strategic investments 16 
and the recovery costs that are not included in other rates or rate schedules 17 
approved by the Arkansas Public Service Commission; 18 
 (9)  "Rider test period" means a historical test period under § 19 
23-4-406 which shall include adjustments identified by the electric utility 20 
or the natural gas utility to a historical test period to reflect the effects 21 
on an annualized basis of a change in circumstances which may occur within 22 
twelve (12) months after the end of the historical test year where the 23 
changes are reasonably known and measurable; 24 
 (10)(A)  "Strategic investments" means investments, either 25 
construction or purchase, and associated operating expenses made by a 26 
electric public utility or natural gas public utility to: 27 
 (i)  Support growth and economic development in this 28 
state, including supporting the development of sites designated as available 29 
for economic development; 30 
 (ii)  Maintain and improve the provision of reliable 31 
electric utility service and natural gas utility service to new and existing 32 
customers in this state; 33 
 (iii)  Support the license extension for existing 34 
nuclear generation resources; and 35 
 (iv)  Ensure that electric utilities maintain 36    	SB307 
 
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adequate dispatchable generation resources to support reliable service for 1 
their customers that is consistent with the resource adequacy requirements 2 
established by the applicable load balancing authority. 3 
 (B)  "Strategic investments" includes without limitation 4 
investments and associated operating expenses associated with: 5 
 (i)  A new electric generating facility, an 6 
associated transportation and storage facility for fuel, and other facilities 7 
designed for or capable of operation at a capacity of one hundred megawatts 8 
(100 MW) or more for a single facility; 9 
 (ii)  An energy storage facility designed for or 10 
capable of operating at a capacity of fifty megawatts (50 MW) or more for a 11 
single facility or a combination of energy storage facilities and an electric 12 
generating facility designed for or capable of operation at a combined 13 
capacity of one hundred megawatts (100 MW) or more for a single facility to 14 
provide service to new and existing customers located in Arkansas; 15 
 (iii)  Upgrades, expansions, or fuel conversions of 16 
existing electric generating facilities and associated transportation and 17 
storage facilities for fuel and other facilities, energy storage facilities, 18 
or any combination thereof to sustain or increase capacity and, therefore, 19 
improve reliability, to provide service to new and existing customers in 20 
Arkansas; 21 
 (iv)  New electric transmission facilities, including 22 
substations with a design voltage of more than one hundred kilovolts (100 kV) 23 
or more to provide service to new and existing customers located in Arkansas; 24 
 (v)  Upgrades or expansions of existing electric 25 
transmission facilities, including substations with a design voltage of more 26 
than one hundred kilovolts (100 kV) or more to increase capacity, therefore, 27 
improve reliability to provide service to new and existing customers located 28 
in Arkansas; 29 
 (vi)  New natural gas transmission lines or high 30 
pressure distribution lines with a maximum allowable operating pressure of 31 
one hundred twenty-five pounds per square inch gauge (125 PSIG) or greater, 32 
facilities designed for or capable of transporting gas at pressures of more 33 
than fifty pounds per square inch (50 psi), natural gas storage facilities, 34 
and associated facilities to provide service to new and existing customers 35 
located in Arkansas; 36    	SB307 
 
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 (vii)  Upgrades or expansions of existing natural gas 1 
transmission lines, high pressure distribution lines with a maximum allowable 2 
operating pressure of one hundred twenty -five pounds per square inch gauge 3 
(125 PSIG) or greater, facilities designed for or capable of transporting gas 4 
at pressures of more than fifty pounds per square inch (50 psi), natural gas 5 
storage facilities, and associated facilities to provide service to new and 6 
existing customers located in Arkansas; and 7 
 (viii)  Feasibility studies of strategic investments 8 
and advanced energy technologies, as defined in § 23 -4-1308, including site 9 
studies and due diligence to determine construction estimates. 10 
 (C)(i)  A renewable resource strategic investment shall be 11 
eligible for recovery through the rider under this section, if the Arkansas 12 
Public Service Commission finds in a proceeding under § 23 -3-201 et seq., § 13 
23-18-104, the Utility Facility Environmental and Economic Protection Act, § 14 
23-18-501 et seq., or any other proceeding for approval of a renewable 15 
resource strategic investment based on substantial evidence, that a renewable 16 
resource strategic investment results in benefits to customers and the 17 
electric utility would continue to have adequate dispatchable resources to 18 
provide reliable service to its customers consistent with the resource 19 
adequacy requirements of the load balancing authority with the addition of 20 
the renewable strategic investment. 21 
 (ii)  As used in subdivision (10)(C)(i) of this 22 
section, "benefits" shall include without limitation: 23 
 (a)  The cost of the renewable strategic 24 
investment is reasonable and prudently incurred; 25 
 (b)  The renewable resource strategic 26 
investment is necessary to supplement or replace the electric utility's 27 
existing generation resources; 28 
 (c)  The renewable resource strategic 29 
investment provides energy and capacity benefits; 30 
 (d)  The renewable resource provides generation 31 
resource mix diversification and fuel source mix benefits and risk mitigation 32 
benefits;  33 
 (e)  The renewable resource strategic 34 
investment supports efforts to attract or retain economic development 35 
opportunities for this state; or 36    	SB307 
 
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 (f)  A customer or customers contract to pay 1 
all or a portion of the cost of the strategic investment as a resource 2 
through a special rate contract, a renewable rate schedule, a contribution in 3 
aid of construction, or other form of payment. 4 
 (D)  Wind resources located in Arkansas are not eligible 5 
for recovery through a rider under this subchapter ; and 6 
 (11)  "Times interest earned ratio" means earnings before 7 
interest and taxes divided by the total interest payable on bonds and other 8 
debt. 9 
 10 
 23-4-1304.  Authorization to recover strategic investments through 11 
rider — Investor-owned electric utility and investor -owned natural gas 12 
utility. 13 
 (a)  An investor-owned electric utility or an investor -owned natural 14 
gas utility may use a rider to recover strategic investments that are not 15 
otherwise recoverable through rates that were previously approved by the 16 
Arkansas Public Service Commission or charged by the investor -owned electric 17 
utility or the investor -owned natural gas utility after: 18 
 (1)  A commission order approving an application under § 23 -3-201 19 
et seq. or the Utility Facility Environmental and Economic Protection Act, § 20 
23-18-501 et seq., or a notice under § 23 -18-104; or 21 
 (2)  A commission order approving any other application related 22 
to the sighting or prudence of the decision to invest in the new strategic 23 
investments. 24 
 (b)(1)  An investor-owned electric utility or an investor -owned natural 25 
gas utility may elect to file with the commission a rider to recover 26 
strategic investments that are not otherwise recoverable in rates previously 27 
approved by the commission or charged by the investor -owned electric utility 28 
or the investor-owned natural gas utility. 29 
 (2)  The investor-owned electric utility or the investor -owned 30 
natural gas utility shall provide notice to the Attorney General of the 31 
filing of the rider by the investor -owned electric utility or the investor -32 
owned natural gas utility on the date the investor -owned electric utility or 33 
the investor-owned natural gas utility files the rider with the commission. 34 
 (c)(1)  An investor-owned electric utility or an investor -owned natural 35 
gas utility may select the date of the first annual filing update, with all 36    	SB307 
 
 	16 	02/25/2025 4:06:48 PM ANS209 
subsequent updates to be filed on or by the same day annually as the first 1 
filing update. 2 
 (2)  An investor-owned electric utility or an investor -owned 3 
natural gas utility shall provide notice to the Attorney General of the 4 
filing of the rider on the date the investor -owned electric utility or the 5 
investor-owned natural gas utility files each annual update to the rider with 6 
the commission. 7 
 (d)  For a rider under this subchapter, an investor -owned electric 8 
utility or an investor -owned natural gas utility shall use a rider test 9 
period. 10 
 (e)(1)  Upon receipt of an investor -owned electric utility's or an 11 
investor-owned natural gas utility’s filing to implement the rider rate 12 
schedule and each annual update under this subchapter, the commission shall 13 
issue an order approving the rider rate schedule and each annual update to 14 
recover strategic investments under this subchapter if the commission 15 
determines that the investor -owned electric utility's or the investor -owned 16 
natural gas utility’s application complies with the provisions of this 17 
section and therefore is in the public interest. 18 
 (2)(A)  Unless the commission determines that approving the 19 
investor-owned electric utility's or the investor -owned natural gas utility’s 20 
application for the rider and each annual update does not comply with this 21 
subchapter, the commission shall enter an order within sixty (60) calendar 22 
days following the date of the investor -owned electric utility's or the 23 
investor-owned natural gas utility’s filing. 24 
 (B)(i)  If the commission determines that approving an 25 
application for approval of a rider rate schedule or annual update under this 26 
subchapter is not in the public interest, the commission shall enter an 27 
order. 28 
 (ii)  In the order entered by the commission under 29 
subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 30 
 (a)  The basis for the commission's findings; 31 
and 32 
 (b)  Any evidence or other information 33 
submitted by the investor -owned electric utility or the investor -owned 34 
natural gas utility as part of its application that the commission deems to 35 
be insufficient. 36    	SB307 
 
 	17 	02/25/2025 4:06:48 PM ANS209 
 (C)  Each annual update shall include, for the initial 1 
rider test year, the construction work in progress costs that will ultimately 2 
be capitalized on which the utility will earn a return, amounts that would 3 
otherwise be recorded as allowance for funds used during construction, and 4 
any expenses associated with the construction work in progress that will not 5 
be capitalized. 6 
 (D)  The commission shall verify the amounts included in 7 
each annual update reflect the amounts authorized for recovery under the 8 
Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 9 
 (E)  The commission shall complete its review of each 10 
annual update filing and issue its order within sixty (60) days following the 11 
date of the annual update filing. 12 
 (F)(i)  If the investor -owned electric utility or the 13 
investor-owned natural gas utility submits an amended filing remedying the 14 
areas of noncompliance identified by the commission in its order, the 15 
commission shall enter an order approving the application within ten (10) 16 
calendar days following the date of the amended filing unless the commission 17 
finds that the filing does not comply with the provisions of this subchapter. 18 
 (ii)  If the commission finds that the amended filing 19 
does not remedy the areas of noncompliance, the commission shall enter an 20 
order denying the application. 21 
 (iii)  In the order issued under subdivision 22 
(e)(2)(F)(ii) of this section, the commission shall discuss: 23 
 (a)  The basis for the commission's findings; 24 
and 25 
 (b)  Any evidence or other information 26 
submitted by the investor -owned electric utility or the investor -owned 27 
natural gas utility as part of its notice or application that the commission 28 
deems to be insufficient. 29 
 (G)  The process outlined in subdivision (e)(2)(B) and (F) 30 
of this section may continue until the commission finds that: 31 
 (i)  The investor-owned electric utility's or the 32 
investor-owned natural gas utility's application complies with this 33 
subchapter; or 34 
 (ii)  The investor-owned electric utility or the 35 
investor-owned natural gas utility withdraws its application or appeals the 36    	SB307 
 
 	18 	02/25/2025 4:06:48 PM ANS209 
commission's decision. 1 
 (H)  If the commission fails to issue its order within the 2 
timeframes stated in this section, the investor -owned electric utility's 3 
filing or the investor -owned natural gas utility’s filing shall become 4 
effective by operation of law subject to completion of the commission's 5 
review under this subchapter. 6 
 (f)(1)  At the election of the investor -owned electric utility or the 7 
investor-owned natural gas utility, strategic investments shall be recovered 8 
through the rider, separate from the investor -owned electric utility's or the 9 
investor-owned natural gas utility’s formula rate plan implemented under the 10 
Formula Rate Review Act, § 23 -4-1201 et seq., any other rider, or otherwise 11 
as part of the investor -owned electric utility's or the investor -owned 12 
natural gas utility's rates approved by the commission.  13 
 (2)  If elected by an investor -owned electric utility or an 14 
investor-owned natural gas utility, the rider shall remain in effect under 15 
this subchapter until the investor -owned electric utility or the investor -16 
owned natural gas utility decides to withdraw the rider with respect to 17 
future cost recovery for strategic investments to be made after the date of 18 
the withdrawal. 19 
 (g)  For the purposes of calculating rates to recover the costs of 20 
strategic investments, including rates implemented through an individual 21 
customer contract, the commission shall ensure that the rates charged to 22 
customers recover the costs of strategic investments in a manner that is 23 
consistent with applicable law and in the public interest. 24 
 (h)  An amount collected through the rider under this subchapter shall 25 
be collected subject to refunds pending the completion of the commission's 26 
review under this subchapter. 27 
 (i)  The rider elected by an investor -owned electric utility or an 28 
investor-owned natural gas utility under this subchapter to recover strategic 29 
investments is a revenue requirement rider and shall provide return on 30 
construction work in progress plus operating expenses during construction and 31 
return on rate base plus operating expenses once complete and in service. 32 
 (j)(1)  An investor-owned electric utility or an investor -owned natural 33 
gas utility shall not accrue an allowance for funds used during construction 34 
for strategic investments with costs recovered through the rider. 35 
 (2)  Instead, the commission shall authorize an investor -owned 36    	SB307 
 
 	19 	02/25/2025 4:06:48 PM ANS209 
electric utility or an investor -owned natural gas utility to earn a return 1 
through the rider under this subchapter on any construction work in progress, 2 
costs that will ultimately be capitalized or recorded as an allowance for 3 
funds used during construction when the strategic investments go into 4 
service. 5 
 (k)  The commission shall authorize an investor -owned electric utility 6 
or an investor-owned natural gas utility to recover through the rider filed 7 
under this subchapter any expenses associated with the construction of 8 
strategic investments that will not be capitalized. 9 
 (l)  In calculating construction work in progress, including actual 10 
costs and any projections, the investor -owned electric utility or the 11 
investor-owned natural gas utility shall base all amounts on year -end 12 
information not subject to averaging beginning -of-year or end-of-year 13 
balances. 14 
 (m)(1)(A)  During the construction of strategic investments included in 15 
the rider, an investor -owned electric utility or an investor -owned natural 16 
gas utility shall include in the capital structure only short -term debt, 17 
long-term debt, and equity. 18 
 (B)  The investor-owned electric utility or the investor -19 
owned natural gas utility shall base the balances of those items under 20 
subdivision (m)(1)(A) of this section on the investor -owned electric 21 
utility’s or the investor -owned natural gas utility’s actual capital 22 
structure with a maximum equity percentage of fifty percent (50%). 23 
 (C)  During the construction of strategic investments, the 24 
commission shall not require an investor -owned electric utility or an 25 
investor-owned natural gas utility that is electing to utilize a rider under 26 
this subchapter to include in the capital structure of the rider other items, 27 
including current, accrued, or other liabilities or accumulated deferred 28 
income taxes. 29 
 (D)  For the purposes of the rider, the cost of debt used 30 
in calculating the cost of capital shall be the cost of short -term debt and 31 
the cost of long-term debt approved in the investor -owned electric utility’s 32 
or the investor-owned natural gas utility’s most recent general rate case 33 
proceeding or formula rate plan annual filing. 34 
 (2)  For any strategic investment included in the rider under 35 
this section that is complete and in service, the investor -owned electric 36    	SB307 
 
 	20 	02/25/2025 4:06:48 PM ANS209 
utility or the investor -owned natural gas utility shall use the capital 1 
structure and overall rate of return that was approved in the investor	-owned 2 
electric utility’s or the investor -owned natural gas utility's most recent 3 
general rate case proceeding or annual formula rate plan filing. 4 
 (n)  For the purpose of the rider, the return on equity used in 5 
calculating the cost of capital shall be set at the return on equity approved 6 
in the investor-owned electric utility's or the investor -owned natural gas 7 
utility’s most recent general rate case proceeding. 8 
 (o)(1)  On the strategic investments' being complete and in service, 9 
the commission shall authorize the investor -owned electric utility or the 10 
investor-owned natural gas utility to earn a fair and reasonable return 11 
through the rider on any capitalized costs for the strategic investments. 12 
 (2)  Once the strategic investments go into service, the 13 
commission shall authorize the investor -owned electric utility or the 14 
investor-owned natural gas utility to recover through the rider any on -going 15 
expenses associated with the strategic investments. 16 
 (3)  In the investor -owned electric utility's or the investor -17 
owned natural gas utility’s next general rate case proceeding, the commission 18 
shall allow the investor -owned electric utility or the investor -owned natural 19 
gas utility to include any capitalized amounts and associated expenses for 20 
completed strategic investments in its base rates. 21 
 (4)(A)  In the investor -owned electric utility's or the investor -22 
owned natural gas utility's next general rate case proceeding, the investor	-23 
owned electric utility or the investor -owned natural gas utility shall move 24 
any amounts for any completed strategic investments from the rider into base 25 
rates. 26 
 (B)  The investor-owned electric utility or the investor -27 
owned natural gas utility shall continue to recover through the rider 28 
implemented under this subchapter the costs and expenses associated with any 29 
strategic investments that are not complete and in service. 30 
 (p)  The revenues from the rider shall be included in calculating the 31 
maximum amount of revenue increase or decrease under § 23 -4-1207(d) for any 32 
formula rate plan implemented under the Formula Rate Review Act, § 23	-4-1201 33 
et seq., but shall otherwise be excluded from the revenues included in a 34 
formula rate plan under the Formula Rate Review Act, § 23 -4-1201 et seq., for 35 
an investor-owned electric utility or an investor -owned natural gas utility. 36    	SB307 
 
 	21 	02/25/2025 4:06:48 PM ANS209 
 (q)(1)  For any excess accumulated deferred income tax associated with 1 
strategic investments, the commission shall: 2 
 (A)  Authorize the investor -owned electric utility or 3 
investor-owned natural gas utility to apply the excess deferred income taxes 4 
to offset the investor -owned electric utility's or investor -owned natural gas 5 
utility’s rate base used in calculating its rates; or 6 
 (B)  Apply the excess deferred income taxes as a credit to 7 
customer bills. 8 
 (2)  The commission shall determine which form and the timing of 9 
applying the accumulated deferred income taxes under subsection (q) of this 10 
section is in the public interest. 11 
 (r)  The commission shall authorize the investor -owned electric utility 12 
or the investor-owned natural gas utility to monetize or apply any tax 13 
credits or other tax incentives, including without limitation investment tax 14 
credits and production tax credits, where possible to reduce the cost of 15 
constructing or acquiring any strategic investments to benefit customers of 16 
an investor-owned electric utility or an investor -owned natural gas utility. 17 
 (s)(1)  The investor -owned electric utility or the investor -owned 18 
natural gas utility shall evaluate opportunities to seek federal funds and 19 
loan programs to reduce the cost of constructing, acquiring, and financing 20 
strategic investments if possible, appropriate, and available to reduce the 21 
cost of constructing or acquiring any strategic investments. 22 
 (2)  If an investor-owned electric utility or an investor -owned 23 
natural gas utility requests and receives federal funding to support 24 
constructing or acquiring strategic investments, the applicable amount of 25 
federal funding shall be deducted from the value of the strategic investments 26 
that are capitalized and recoverable through rates charged to customers of an 27 
investor-owned electric utility or an investor -owned natural gas utility. 28 
 (t)(1)  If an investor -owned electric utility or an investor -owned 29 
natural gas utility, with rates regulated under the Formula Rate Review Act, 30 
§ 23-4-1201 et seq., has a return on equity above the return on the investor	-31 
owned electric utility's or the investor -owned natural gas utility’s most 32 
recent general rate case proceeding, plus five -tenths percent (0.5%), and 33 
would otherwise be required to provide credits to a customer's bill, the 34 
investor-owned electric utility or the investor -owned natural gas utility 35 
shall not be required to adjust rates and provide credits to customers that 36    	SB307 
 
 	22 	02/25/2025 4:06:48 PM ANS209 
may otherwise be required under § 23 -4-1207(b) if the investor -owned electric 1 
utility or the investor -owned natural gas utility can demonstrate that the 2 
investor-owned electric utility or the investor -owned natural gas utility has 3 
approved strategic investments under construction or can provide substantial 4 
evidence that it has plans to request commission approval within the next 5 
twenty-four (24) months to make strategic investments that would qualify for 6 
recovery through the rider in an amount equal to or greater than the amount 7 
above the return on equity approved in the investor -owned electric utility's 8 
or the investor-owned natural gas utility’s most recent general rate case 9 
proceeding, plus five -tenths percent (0.5%). 10 
 (2)  For an investor -owned electric utility or an investor -owned 11 
natural gas utility, with rates regulated under the Formula Rate Review Act, 12 
§ 23-4-1201 et seq., the commission shall not require a reduction of rates to 13 
the investor-owned electric utility's or the investor -owned natural gas 14 
utility’s authorized rate of return, or reduce the investor -owned electric 15 
utility's or the investor -owned natural gas utility’s target rate of return 16 
under § 23-4-1207(b) for any formula rate plan mechanism under the Formula 17 
Rate Review Act, § 23 -4-1201 et seq., if an investor -owned electric utility 18 
or an investor-owned natural gas utility can demonstrate that it has approved 19 
strategic investments or can provide substantial evidence that it has plans 20 
to seek commission approval within the next twenty -four (24) months to make 21 
strategic investments in an amount equal to or greater than the level of 22 
earnings above the investor -owned electric utility's or the investor -owned 23 
natural gas utility’s authorized rate of return or the investor -owned 24 
electric utility's or the investor -owned natural gas utility’s target rate of 25 
return under § 23-4-1207(b) for any formula rate plan mechanism implemented 26 
under the Formula Rate Review Act, § 23 -4-1201 et seq. 27 
 (3)(A)  The investor -owned electric utility or the investor -owned 28 
natural gas utility shall first apply any amounts identified in subdivisions 29 
(t)(1) and (2) of this section to approved strategic investments under 30 
construction.  31 
 (B)(i)  The commission may authorize the investor -owned 32 
electric utility or the investor -owned natural gas utility to record any 33 
amounts identified in subdivisions (t)(1) and (2) of this section associated 34 
with any projects for which it has provided substantial evidence that it has 35 
plans to request commission approval during the next twenty -four (24) months 36    	SB307 
 
 	23 	02/25/2025 4:06:48 PM ANS209 
and designate those amounts to offset the cost of the planned strategic 1 
investments if the commission determines that doing so is in the public 2 
interest.   3 
 (ii)  If the commission authorizes recording any 4 
amounts for the projects described in subdivision (t)(3)(B)(i) of this 5 
section, the investor -owned electric utility or the investor -owned natural 6 
gas utility shall deduct interest at a rate equal to the cost of short	-term 7 
debt approved in the investor -owned electric utility's or the investor -owned 8 
natural gas utility’s last general rate case proceeding from any amounts 9 
recorded until those amounts are applied to offset the cost of strategic 10 
investments. 11 
 (C)  The investor-owned electric utility or the investor -12 
owned natural gas utility shall provide credits to customers equal to any 13 
remaining amounts identified in subdivisions (t)(1) and (2) of this section 14 
as required under § 23 -4-1207(b). 15 
 (u)  Except as otherwise provided in this subchapter, this section does 16 
not alter the powers and authority of the commission. 17 
 (v)  A commission review of the expenditures associated with strategic 18 
investments included in the rider, including evaluating whether or not any 19 
costs or expenses are reasonable and prudently incurred, shall be completed 20 
within twelve (12) calendar months after the date upon which the investor	-21 
owned electric utility or the investor -owned natural gas utility provides 22 
notice that the strategic investments are complete and in service. 23 
 (w)  An expenditure associated with strategic investments for which an 24 
application for approval is pending before the commission as of the effective 25 
date of this subchapter shall be eligible for recovery through the rider 26 
under this subchapter if: 27 
 (1)  The costs are not otherwise included in rates approved by 28 
the commission before the effective date of this subchapter; 29 
 (2)  The investor-owned electric utility or the investor -owned 30 
natural gas utility has an application pending that was filed before the 31 
effective date of this subchapter for approval: 32 
 (A)  To construct a power generation facility outside of 33 
the state under § 23 -18-104; 34 
 (B)  To obtain a certificate of environmental compatibility 35 
and public need under the Utility Facility Environmental and Economic 36    	SB307 
 
 	24 	02/25/2025 4:06:48 PM ANS209 
Protection Act, § 23 -18-501 et seq.; 1 
 (C)  To obtain a certificate of public convenience and 2 
necessity under § 23 -3-201 et seq.; or 3 
 (D)  For any other application related to the sighting or 4 
prudence of the decision to invest in the new strategic investments; and 5 
 (3)  The commission enters an order after January 1, 2025, 6 
approving an application that was filed before the effective date of this 7 
subchapter for approval: 8 
 (A)  To construct a power generation facility outside of 9 
the state under § 23 -18-104; 10 
 (B)  To obtain a certificate of environmental compatibility 11 
and public need under the Utility Facility Environmental and Economic 12 
Protection Act, § 23 -18-501 et seq.; 13 
 (C)   To obtain a certificate of public convenience and 14 
necessity under § 23 -3-201 et seq.; or 15 
 (D)  For any other application related to the sighting or 16 
prudence of the decision to invest in the new strategic investments. 17 
 (x)(1)  If a customer pays or multiple customers pay for a portion of 18 
any strategic investments through a contribution in aid of construction or 19 
through other form of payment, the strategic investments shall continue to be 20 
considered strategic investments and classified as part of the investor	-owned 21 
electric utility's or the investor -owned natural gas utility’s retail assets 22 
and recoverable through the investor -owned electric utility's or the 23 
investor-owned natural gas utility’s retail rates, either in the base rates 24 
of the investor-owned electric utility or the investor -owned natural gas 25 
utility, through a rider under this subchapter, or rates otherwise approved 26 
by the commission. 27 
 (2)(A)  A payment by a customer or customers for any a portion of 28 
any strategic investments through a contribution in aid of construction shall 29 
be deducted from the cost of the strategic investments capitalized and 30 
recovered through rates. 31 
 (B)  A payment by a customer or customers through any other 32 
forms of payment shall be recorded for ratemaking purposes, when the 33 
strategic investments are completed and placed into service and shall be 34 
recognized as payment over a period not to exceed the life of the strategic 35 
investments, in a manner that provides comparable benefits for other 36    	SB307 
 
 	25 	02/25/2025 4:06:48 PM ANS209 
customers over the life of the strategic investments. 1 
 2 
 23-4-1305.  Procedure to recover strategic investments through riders — 3 
Investor-owned electric utility and investor -owned natural gas utility. 4 
 (a)  An investor-owned electric utility or an investor -owned natural 5 
gas utility electing to file with the Arkansas Public Service Commission a 6 
rider to recover strategic investments that are not otherwise included in 7 
rates previously approved by the commission, may file an application to 8 
implement the rider any time within twelve (12) months after: 9 
 (1)  The commission enters an order approving an application 10 
under § 23-3-201 et seq. or the Utility Facility Environmental and Economic 11 
Protection Act, § 23 -18-501 et seq., or a notice under § 23 -18-104; or 12 
 (2)  Any other application related to the sighting or prudence of 13 
the decision to invest in strategic investments. 14 
 (b)  An investor-owned electric utility or an investor -owned natural 15 
gas utility shall file: 16 
 (1)  An annual update to the rider to reflect the annual 17 
expenditures; 18 
 (2)  An update to any projections included in the rider to 19 
recover strategic investments; and 20 
 (3)  An investor-owned electric utility's or an investor -owned 21 
natural gas utility’s recovery through the rider shall be limited to the 22 
amounts identified by the investor -owned electric utility or an investor -23 
owned natural gas utility in the proceeding in which the commission approved 24 
the strategic investments unless a greater amount is subsequently authorized 25 
by the commission. 26 
 (c)  The annual update required under subsection (b) of this section 27 
shall include the information stated in subsections (a) -(b) of this section 28 
for strategic investments following subsequent commission orders approving 29 
strategic investments. 30 
 (d)  An investor-owned electric utility or an investor -owned natural 31 
gas utility shall notify the commission of any significant delays or material 32 
changes in the construction schedule or cost of any strategic investments 33 
approved by the commission under § 23 -3-201 et seq., § 23-18-104, or the 34 
Utility Facility Environmental and Economic Protection Act, § 23 -18-501 et 35 
seq., from the information available to the commission at the time of its 36    	SB307 
 
 	26 	02/25/2025 4:06:48 PM ANS209 
approval. 1 
 (e)(1)  An investor-owned electric utility or an investor -owned natural 2 
gas utility shall remove the cost of any strategic investments that are 3 
abandoned before completion or for which construction has been indefinitely 4 
suspended from the rider unless the commission determines, based on 5 
substantial evidence provided by the investor -owned electric utility or the 6 
investor-owned natural gas utility, that: 7 
 (A)  The costs were reasonable and prudently incurred at 8 
the time the costs were incurred; 9 
 (B)  Continued recovery through the rider remains 10 
reasonable versus recovery through rates; 11 
 (C)  The circumstance of the abandonment before completion 12 
or indefinite construction suspension is reasonable; or 13 
 (D)  A customer or customers have paid all or a portion of 14 
the cost of the strategic investments through a contribution in aid of 15 
construction, special rate contract, or other form of payment. 16 
 (2)  Upon removal of any costs for strategic investments that are 17 
abandoned before completion or for which construction has been indefinitely 18 
suspended, the investor -owned electric utility or the investor -owned natural 19 
gas utility may seek recovery of those costs through rates if the commission 20 
determines, based on substantial evidence provided by the investor -owned 21 
electric utility or the investor -owned natural gas utility, that: 22 
 (A)  The costs were reasonable and prudently incurred at 23 
the time those costs were incurred; 24 
 (B)  The circumstance of the abandonment before completion 25 
or indefinite construction suspension is reasonable; or 26 
 (C)  A customer or customers have paid all or a portion of 27 
the cost of the strategic investment through a contribution in aid of 28 
construction, special rate contract, or other form of payment. 29 
 (3)(A)  An investor-owned electric utility or an investor -owned 30 
natural gas utility may request recovery of any costs for strategic 31 
investments that are abandoned before completion or for which construction 32 
has been indefinitely suspended if the costs for strategic investments that 33 
are abandoned before completion or for which construction has been 34 
indefinitely suspended are removed from recovery through the rider in a 35 
separate proceeding. 36    	SB307 
 
 	27 	02/25/2025 4:06:48 PM ANS209 
 (B)  Upon receipt of a request for recovery of costs under 1 
subdivision (e)(3)(A) of this section, the commission shall determine: 2 
 (i)  Whether recovery of those costs is in the public 3 
interest; and 4 
 (ii)  The form and timing of recovery through rates 5 
charged to customers. 6 
 (f)(1)(A)  Except as provided in subdivision (f)(2)(D)(i) of this 7 
section, an investor -owned electric utility's or an investor -owned natural 8 
gas utility’s total amount of revenue increase from an annual update to the 9 
rider under this subchapter shall not result in the investor -owned electric 10 
utility's or the investor -owned natural gas utility’s rates exceeding a level 11 
ten percent (10%) below the national average for all sectors. 12 
 (B)  For this comparison, the rates under subdivision 13 
(f)(1)(A) of this section shall be calculated using: 14 
 (i)  The same method as that used by the United 15 
States Energy Information Administration and published in its most recent 16 
edition of the Electric Power Annual report for electric utilities, as 17 
adopted by the commission by rule, or the Natural Gas Annual report for 18 
natural gas utilities, as adopted by the commission by rule; and 19 
 (ii)  Data from the same calendar year as the United 20 
States Energy Information Administration's publication to which the investor	-21 
owned electric utility's or the investor -owned natural gas utility’s revenue 22 
increase is compared. 23 
 (C)  If the commission finds that the investor -owned 24 
electric utility or the investor -owned natural gas utility provides 25 
substantial evidence to the commission demonstrating that its rates will 26 
remain capable of attracting or retaining economic development opportunities 27 
for the state even if the rates exceed ten percent (10%) below national 28 
average and that doing so is in the public interest, then the commission 29 
shall approve each revenue increase. 30 
 (2)(A)  If the commission approves a revenue increase for an 31 
investor-owned electric utility or an investor -owned natural gas utility from 32 
an annual update to the rider under this subchapter that results in the 33 
investor-owned electric utility's or the investor -owned natural gas utility’s 34 
rates exceeding a level ten percent (10%) below the national average, the 35 
commission shall submit a letter to the cochairs of the Legislative Council 36    	SB307 
 
 	28 	02/25/2025 4:06:48 PM ANS209 
notifying the General Assembly that the commission has approved a revenue 1 
increase for an investor -owned electric utility or investor -owned natural gas 2 
utility from an annual update to the rider under this subchapter that has 3 
resulted in an investor -owned electric utility's or an investor -owned natural 4 
gas utility’s total rates inclusive of all riders is exceeding a level ten 5 
percent (10%) below the national average. 6 
 (B)  Unless the commission approves an increase in the 7 
total amount of revenue increase from an annual update to the rider under 8 
this subchapter that exceeds a level ten percent (10%) below the national 9 
average for all sectors under subdivision (f)(2)(A) of this section, the 10 
investor-owned electric utility or the investor -owned natural gas utility 11 
shall adjust its annual update to the rider under subsections (a) —(d) of this 12 
section to include only a revenue increase that results in rates that are ten 13 
percent (10%) below the national average. 14 
 (C)  The commission shall verify that an annual update to 15 
the rider under subsections (a) —(d) of this section does not include a 16 
revenue increase that results in rates exceeding a level ten percent (10%) 17 
below the national average unless it authorizes a greater amount under 18 
subdivision (f)(1)(A) of this section. 19 
 (D)(i)  If an investor -owned natural gas utility’s rates 20 
are above the national average for all sectors calculated using the same 21 
method as that used by the United States Energy Information Administration 22 
and published in its most recent edition of the Natural Gas Annual report for 23 
natural gas utilities, as adopted by the commission by rule, and calculated 24 
using data from the same calendar year as the United States Energy 25 
Information Administration publication to which the investor -owned natural 26 
gas utility’s revenue increase is compared, the total amount of revenue 27 
increase or decrease for an investor -owned natural gas utility from an annual 28 
update to the rider under this subchapter shall not exceed four percent (4%) 29 
of each rate class's total revenue. 30 
 (ii)  If a conflict exists between subdivision (f)(1) 31 
of this section and subdivision (f)(2)(D)(i) of this section, subdivision 32 
(f)(2)(D)(i) of this section shall control. 33 
 (E)  The commission shall submit an annual report to the 34 
Legislative Council describing: 35 
 (i)  The strategic investments included in the rider 36    	SB307 
 
 	29 	02/25/2025 4:06:48 PM ANS209 
for an investor-owned electric utility or an investor -owned natural gas 1 
utility; and 2 
 (ii)  The change in rates resulting from the 3 
investor-owned electric utility's and the investor -owned natural gas 4 
utility’s annual update to the rider under this subchapter on the investor	-5 
owned electric utility's or the investor -owned natural gas utility’s rates. 6 
 (3)  An investor-owned electric utility shall submit an annual 7 
report to the commission describing its generation portfolio mix based on the 8 
generation capacity mix and on the energy mix. 9 
 (4)  The commission shall submit an annual report to the 10 
Legislative Council describing the generation portfolio mix based on the 11 
generation capacity mix and based on the energy mix for each investor	-owned 12 
electric utility. 13 
 (g)  Once strategic investments in public utility facilities are 14 
complete and in service, an investor -owned electric utility or an investor -15 
owned natural gas utility shall: 16 
 (1)  Reconcile the actual expenditures and any projected amounts 17 
included in the rider; 18 
 (2)  Net any differences in projected amounts and actual 19 
expenditures; and 20 
 (3)  Either: 21 
 (A)  Reduce the amounts ultimately capitalized by any over -22 
collection; or 23 
 (B)  Recover any under -collection through subsequent years’ 24 
rider filings.  25 
 (h)  For recovery through the rider, an investor -owned electric utility 26 
or an investor-owned natural gas utility shall give priority to strategic 27 
investments in new electric generation and transmission facilities located in 28 
Arkansas, unless: 29 
 (1)  The investor-owned electric utility or the investor -owned 30 
natural gas utility demonstrates, and the commission finds that a strategic 31 
investment in new electric generation and transmission facilities located 32 
outside of Arkansas provides greater benefits to the investor -owned electric 33 
utility's or the investor -owned natural gas utility’s customers in Arkansas 34 
than a comparable strategic investment in new electric generation and 35 
transmission facilities located in Arkansas; 36    	SB307 
 
 	30 	02/25/2025 4:06:48 PM ANS209 
 (2)  A comparable strategic investment in new electric generation 1 
or transmission facility is not available or cannot be constructed in 2 
Arkansas; or  3 
 (3)  A customer or customers contract to pay all or a portion of 4 
the cost of the strategic investment in the resource through a special rate 5 
contract, a renewable rate schedule, a contribution in aid of construction,  6 
or other form of payment. 7 
 8 
 23-4-1306.  Authorization to recover strategic investments through 9 
rider – Electric distribution cooperative and electric generation and 10 
transmission cooperative. 11 
 (a)  An electric distribution cooperative or an electric generation and 12 
transmission cooperative may obtain a rider to recover strategic investments 13 
if not otherwise recoverable in rates previously approved by the Arkansas 14 
Public Service Commission after: 15 
 (1)  A commission order approving an application under § 23 -3-201 16 
et seq. or the Utility Facility Environmental and Economic Protection Act, § 17 
23-18-501 et seq. or a notice under § 23 -18-104; or 18 
 (2)  A commission order approving any other application related 19 
to the sighting or prudence of the decision to invest in the new strategic 20 
investments. 21 
 (b)(1)  An electric distribution cooperative or an electric generation 22 
and transmission cooperative may elect to file with the commission a rider to 23 
recover strategic investments that are not otherwise recoverable in rates 24 
previously approved by the commission. 25 
 (2)  The electric distribution cooperative or the electric 26 
generation and transmission cooperative shall provide notice to the Attorney 27 
General of the filing of the rider by the electric distribution cooperative 28 
or the electric generation and transmission cooperative on the date the 29 
electric distribution cooperative or the electric generation and transmission 30 
cooperative files the rider with the commission. 31 
 (c)  An electric distribution cooperative or an electric generation and 32 
transmission cooperative may select the date of the first annual filing 33 
update, with all subsequent updates to be filed on or by the same day 34 
annually as the first filing update. 35 
 (d)  For a rider under this subchapter, an electric distribution 36    	SB307 
 
 	31 	02/25/2025 4:06:48 PM ANS209 
cooperative or an electric generation and transmission cooperative shall use 1 
a rider test period. 2 
 (e)(1)  Upon receipt of an electric distribution cooperative’s or an 3 
electric generation and transmission cooperative's filing to implement the 4 
rider rate schedule and each annual update under this subchapter, the 5 
commission shall issue an order approving the rider rate schedule and each 6 
annual update to recover strategic investments under this subchapter if the 7 
commission determines that the electric distribution cooperative’s or the 8 
electric generation and transmission cooperative’s application complies with 9 
the provisions of this section and therefore is in the public interest.   10 
 (2)(A)  Unless the commission determines that approving the 11 
electric distribution cooperative's or the electric generation and 12 
transmission cooperative's application does not comply with this subchapter, 13 
the commission shall enter an order within sixty (60) calendar days following 14 
the date of the electric distribution cooperative's or the electric 15 
generation and transmission cooperative’s filing.  16 
 (B)(i)  If the commission determines that approving an 17 
application is not in the public interest or otherwise fails to meet the 18 
requirements of this section, the commission shall enter an order denying the 19 
application. 20 
 (ii)  In the order entered by the commission under 21 
subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 22 
 (a)  The basis for the commission's findings; 23 
and 24 
 (b)  Any evidence or other information 25 
submitted by the electric distribution cooperative or the electric generation 26 
and transmission cooperative as part of its application that the commission 27 
deems to be insufficient. 28 
 (C)  Each annual update shall include, for the initial 29 
rider test year, the construction work in progress costs that will ultimately 30 
be capitalized on which the utility will earn a return, amounts that would 31 
otherwise be recorded as allowance for funds used during construction, and 32 
any expenses associated with the construction work in progress that will not 33 
be capitalized. 34 
 (D)  The commission shall verify the amounts included in 35 
each annual update reflect the amounts authorized for recovery under the 36    	SB307 
 
 	32 	02/25/2025 4:06:48 PM ANS209 
Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 1 
 (E)  The commission shall complete its review of each 2 
annual update filing and issue its order within sixty (60) days following the 3 
date of the annual update filing. 4 
 (F)(i)  If the electric distribution cooperative or 5 
electric generation and transmission cooperative submits an amended filing 6 
remedying the areas of noncompliance identified by the commission in its 7 
order, the commission shall enter an order approving the application within 8 
ten (10) calendar days following the date of the amended filing unless the 9 
commission finds that the filing does not comply with the provisions of this 10 
subchapter. 11 
 (ii)  If the commission finds that the amended filing 12 
does not remedy the areas of noncompliance, the commission shall enter an 13 
order denying the application. 14 
 (iii)  In the order entered under subdivision 15 
(e)(2)(F)(ii) of this section, the commission shall discuss: 16 
 (a)  The basis for the commission’s findings; 17 
and 18 
 (b)  Any evidence or other information 19 
submitted by the electric distribution cooperative or electric generation and 20 
transmission cooperative with its amended filing that the commission finds 21 
does not comply with specific provisions of this subchapter. 22 
 (G)  The process outlined in subdivisions (e)(2)(B) and (F) 23 
of this section may continue until the commission finds that: 24 
 (i)  The electric distribution cooperative's or an 25 
electric generation and transmission cooperative’s application complies with 26 
this subchapter; 27 
 (ii)  The electric distribution cooperative or the 28 
electric generation and transmission cooperative withdraws its application; 29 
or 30 
 (iii)  The electric distribution cooperative or the 31 
electric generation and transmission cooperative appeals the commission's 32 
decision. 33 
 (H)  If the commission fails to issue its order within the 34 
time frames stated in this subchapter, the electric distribution 35 
cooperative's or the electric generation and transmission cooperative’s 36    	SB307 
 
 	33 	02/25/2025 4:06:48 PM ANS209 
filing shall become effective by operation of law, subject to completion of 1 
the commission’s review under this subchapter. 2 
 (f)(1)  At the election of the electric distribution cooperative or the 3 
electric generation and transmission cooperative, strategic investments shall 4 
be recovered through the rider under this subchapter, separate from any rate 5 
adjustments by an electric distribution cooperative under § 23 -4-901 et seq., 6 
any rate adjustments by an electric generation and transmission cooperative 7 
under § 23-4-1101 et seq., any other rider, or otherwise as part of the 8 
electric distribution cooperative's or the electric generation and 9 
transmission cooperative’s rates approved by the commission. 10 
 (2)  If elected by an electric distribution cooperative or an 11 
electric generation and transmission cooperative, the rider shall remain in 12 
effect under this subchapter until the electric distribution cooperative or 13 
the electric generation and transmission cooperative decides to withdraw the 14 
rider with respect to future cost recovery for strategic investments to be 15 
made after the date of the withdrawal. 16 
 (g)  For the purposes of calculating rates to recover the costs of 17 
strategic investments, including rates implemented through an individual 18 
customer contract, the commission shall ensure that the rates charged to 19 
customers recover the costs of strategic investments in a manner that is 20 
consistent with applicable law and in the public interest. 21 
 (h)  An amount collected through the rider under this subchapter shall 22 
be collected subject to refunds pending the completion of the commission's 23 
review under this subchapter. 24 
 (i)  The rider elected by an electric distribution cooperative or an 25 
electric generation and transmission cooperative under this subchapter to 26 
recover strategic investments is a revenue requirement rider and shall 27 
provide an electric distribution cooperative's or an electric generation and 28 
transmission cooperative's approved times interest earned ratio, including 29 
any amounts to build members equity, for the construction work in progress 30 
during construction and return on rate base plus operating expenses once the 31 
strategic investments are complete and in service. 32 
 (j)(1)  An electric distribution cooperative or an electric generation 33 
and transmission cooperative shall not accrue an allowance for funds used 34 
during construction for strategic investments with costs recovered through 35 
the rider. 36    	SB307 
 
 	34 	02/25/2025 4:06:48 PM ANS209 
 (2)  Instead the commission may allow an electric distribution 1 
cooperative or an electric generation and transmission cooperative to adjust 2 
its revenues through the rider under this subchapter to maintain its 3 
authorized times interest earned ratio for expenditures associated with any 4 
construction work in progress costs that will ultimately be capitalized or 5 
recorded as allowance for funds used during construction when the strategic 6 
investments are complete and in service.  7 
 (k)  The commission may allow an electric distribution cooperative or 8 
an electric generation and transmission cooperative to recover through the 9 
rider under this subchapter any expenses associated with the construction of 10 
strategic investments that will not be capitalized.  11 
 (l)  In calculating construction work in progress, including actual 12 
costs and any projections, the electric distribution cooperative or the 13 
electric generation and transmission cooperative shall base all amounts on 14 
year-end information not subject to averaging beginning -of-year and end-of-15 
year balances. 16 
 (m)  For the purposes of the rider under this subchapter, the electric 17 
distribution cooperative's or the electric generation and transmission 18 
cooperative’s times interest earned ratio shall be the times interest earned 19 
ratio underlying its currently approved rates, including any additional 20 
amounts to build equity of the members of the electric distribution 21 
cooperative or the electric generation and transmission cooperative. 22 
 (n)(1)  On the strategic investments' being complete and in service, 23 
the commission shall authorize the electric distribution cooperative or the 24 
electric generation and transmission cooperative to adjust its revenues 25 
through the rider under this subchapter to maintain its authorized times 26 
interest earned ratio for expenditures associated with any construction work 27 
in progress costs that will ultimately be capitalized or recorded as 28 
allowance for funds used during construction when the strategic investments 29 
are complete and in service. 30 
 (2)  Once the strategic investments are complete and in service, 31 
the commission shall authorize the electric distribution cooperative or the 32 
electric generation and transmission cooperative to recover through the rider 33 
under this subchapter any on -going expenses associated with the strategic 34 
investments.   35 
 (3)  In the electric distribution cooperative's or the electric 36    	SB307 
 
 	35 	02/25/2025 4:06:48 PM ANS209 
generation and transmission cooperative’s next general rate case proceeding, 1 
the commission shall allow the electric distribution cooperative or the 2 
electric generation and transmission cooperative to include any capitalized 3 
amounts and associated expenses for completed strategic investments in its 4 
base rates. 5 
 (4)(A)  In its next general rate case proceeding, the electric 6 
distribution cooperative or the electric generation and transmission 7 
cooperative shall move any amounts for any completed strategic investments 8 
from the rider under this subchapter into its base rates. 9 
 (B)  The electric distribution cooperative or the electric 10 
generation and transmission cooperative shall continue to recover through the 11 
rider under this subchapter the costs and expenses associated with any 12 
strategic investments that are not complete and in service. 13 
 (o)  The revenues from the rider under this subchapter shall be 14 
included in calculating the allowed level of any rate increase for electric 15 
distribution cooperative rate adjustments under § 23 -4-901 et seq. or 16 
electric generation and transmission cooperative rate adjustments under § 23	-17 
4-1101 et seq. but shall otherwise be excluded from the revenues included in 18 
electric distribution cooperative rate adjustments under § 23 -4-901 et seq. 19 
or electric generation and transmission cooperative rate adjustments under § 20 
23-4-1101 et seq. 21 
 (p)  The commission shall authorize an electric distribution 22 
cooperative or an electric generation and transmission cooperative to 23 
monetize or apply any tax credits or other tax incentives, including without 24 
limitation investment tax credits and production tax credits, where possible 25 
to reduce the cost of constructing or acquiring any strategic investments for 26 
the benefit of members of the electric distribution cooperative or the 27 
electric generation and transmission cooperative. 28 
 (q)(1)  An electric distribution cooperative or an electric generation 29 
and transmission cooperative shall evaluate opportunities to seek federal 30 
funds and loan programs to reduce the cost of constructing, acquiring, and 31 
financing strategic investments if possible, appropriate, and available for 32 
the benefit of members of the electric distribution cooperative or the 33 
electric generation and transmission cooperative. 34 
 (2)  If an electric distribution cooperative or an electric 35 
generation and transmission cooperative requests and receives federal funding 36    	SB307 
 
 	36 	02/25/2025 4:06:48 PM ANS209 
to support constructing or acquiring strategic investments, the applicable 1 
amount of federal funding shall be deducted from the value of the strategic 2 
investments that are capitalized and recoverable through rates charged to 3 
members of the electric distribution cooperative or the electric generation 4 
and transmission cooperative. 5 
 (r)  If an electric distribution cooperative or an electric generation 6 
and transmission cooperative has revenues above its authorized times interest 7 
earned ratio, the electric distribution cooperative or the electric 8 
generation and transmission cooperative shall not be required to adjust rates 9 
if the electric distribution cooperative or the electric generation and 10 
transmission cooperative can demonstrate that it has plans to invest in 11 
strategic investments that would qualify for recovery through the rider in 12 
amounts equal to or greater than the amount above the authorized times 13 
interest earned ratio. 14 
 (s)  Except as otherwise provided in this subchapter, this section does 15 
not alter the powers and authority of the commission. 16 
 (t)  A commission review of the expenditures associated with strategic 17 
investments included in the rider under this subchapter, including evaluating 18 
whether or not any costs or expenses are reasonable and prudently incurred, 19 
shall be completed within twelve (12) calendar months after the date upon 20 
which the electric distribution cooperative or the electric generation and 21 
transmission cooperative provides notice that the strategic investments are 22 
complete and in service. 23 
 (u)  An expenditure associated with strategic investments for which an 24 
application for approval is pending before the commission as of the effective 25 
date of this subchapter shall be eligible for recovery through the rider 26 
under this subchapter if: 27 
 (1)  The costs are not otherwise included in rates approved by 28 
the commission before the effective date of this subchapter; and 29 
 (2)  The electric distribution cooperative or the electric 30 
generation and transmission cooperative has an application pending that was 31 
filed before the effective date of this subchapter for approval: 32 
 (A)  To construct a power generation facility outside of 33 
the state under § 23 -18-104; 34 
 (B)  To obtain a certificate of environmental compatibility 35 
and public need under the Utility Facility Environmental and Economic 36    	SB307 
 
 	37 	02/25/2025 4:06:48 PM ANS209 
Protection Act, § 23 -18-501 et seq.; 1 
 (C)  To obtain a certificate of public convenience and 2 
necessity under § 23 -3-201 et seq.; or 3 
 (D)  For any other application related to the sighting or 4 
prudence of the decision to invest in the new strategic investments; and 5 
 (4)  The commission enters an order after January 1, 2025, 6 
approving an application that was filed before the effective date of this 7 
subchapter for approval: 8 
 (A)  To construct a power generation facility outside of 9 
the state under § 23 -18-104; 10 
 (B)  To obtain a certificate of environmental compatibility 11 
and public need under the Utility Facility Environmental and Economic 12 
Protection Act, § 23 -18-501 et seq.; 13 
 (C)  To obtain a certificate of public convenience and 14 
necessity under § 23 -3-201 et seq.; or 15 
 (D)  For any other application related to the sighting or 16 
prudence of the decision to invest in the new strategic investments. 17 
 (v)(1)  If a customer pays or multiple customers pay for a portion of 18 
any strategic investments through a contribution in aid of construction or 19 
through other form of payment, the strategic investments shall continue to be 20 
considered strategic investments and classified as part of the electric 21 
distribution cooperative's or the electric generation and transmission 22 
cooperative’s retail assets and recoverable through the electric distribution 23 
cooperative's or the electric generation and transmission cooperative’s 24 
retail rates, either in the base rates of the electric distribution 25 
cooperative or the electric generation and transmission cooperative, through 26 
a rider under this subchapter, or rates otherwise approved by the commission. 27 
 (2)(A)  A payment by a customer or customers for a portion of any 28 
strategic investments through a contribution in aid of construction shall be 29 
deducted from the cost of the strategic investments capitalized and recovered 30 
through rates. 31 
 (B)  A payment by a customer or customers through any other 32 
forms of payment shall be recorded for ratemaking purposes when the strategic 33 
investments are completed and placed into service and shall be recognized as 34 
payment over a period not to exceed the life of the strategic investments in 35 
a manner that provides comparable benefits for other customers over the life 36    	SB307 
 
 	38 	02/25/2025 4:06:48 PM ANS209 
of the strategic investments. 1 
 2 
 23-4-1307.  Procedure to recover strategic investments through rider — 3 
Electric distribution cooperative and electric generation and transmission 4 
cooperative. 5 
 (a)  An electric distribution cooperative or an electric generation and 6 
transmission cooperative electing to file with the Arkansas Public Service 7 
Commission a rider under this subchapter to recover strategic investments not 8 
otherwise included in rates previously approved by the commission, may file 9 
an application to implement the rider any time within twelve (12) months 10 
after: 11 
 (1)  A commission order approving an application under § 23 -3-201 12 
et seq. or the Utility Facility Environmental and Economic Protection Act, § 13 
23-18-501 et seq., or a notice under § 23 -18-104; or 14 
 (2)  Any other application related to the sighting or prudence of 15 
the decision to invest in the strategic investments. 16 
 (b)(1)  An electric distribution cooperative or an electric generation 17 
and transmission cooperative shall file an annual update to the rider under 18 
this subchapter to reflect the annual expenditures plus an update to any 19 
projections included in the rider under this subchapter to recover strategic 20 
investments. 21 
 (2)  An electric distribution cooperative’s or an electric 22 
generation and transmission cooperative’s recovery through the rider shall be 23 
limited to the amounts identified by the electric distribution cooperative or 24 
the electric generation and transmission cooperative in the proceeding in 25 
which the commission approved the strategic investments unless a greater 26 
amount is subsequently authorized by the commission. 27 
 (c)  The annual update required under subdivision (b)(1) of this 28 
section shall include the amounts stated in this section for strategic 29 
investments following subsequent orders from the commission approving 30 
strategic investments. 31 
 (d)  An electric distribution cooperative or an electric generation and 32 
transmission cooperative shall notify the commission of any significant 33 
delays or material changes in the construction schedule or cost of any 34 
strategic investments approved by the commission under § 23 -3-201 et seq., § 35 
23-18-104, or the Utility Facility Environmental and Economic Protection Act, 36    	SB307 
 
 	39 	02/25/2025 4:06:48 PM ANS209 
§ 23-18-501 et seq., from the information available to the commission at the 1 
time of its approval. 2 
 (e)(1)  An electric distribution cooperative or an electric generation 3 
and transmission cooperative shall remove from the rider under this 4 
subchapter the cost of any strategic investments that are abandoned before 5 
completion or for which construction has been indefinitely suspended unless 6 
the commission determines, based on substantial evidence provided by the 7 
electric distribution cooperative or the electric generation and transmission 8 
cooperative, that: 9 
 (A)  The costs were reasonable and prudently incurred at 10 
the time those costs were incurred; 11 
 (B)  Continued recovery through the rider under this 12 
subchapter remains reasonable versus recovery through rates otherwise; 13 
 (C)  The circumstance of the abandonment before completion 14 
or indefinite construction suspension is reasonable; or 15 
 (D)  A customer or customers have paid all or a portion of 16 
the cost of the strategic investments through a contribution in aid of 17 
construction, special rate contract, or other form of payment. 18 
 (2)  Upon removal of any costs for strategic investments that are 19 
abandoned or for which construction has been indefinitely suspended, an 20 
electric distribution cooperative or an electric generation and transmission 21 
cooperative may seek recovery of those costs through rates if the commission 22 
determines, based on substantial evidence provided by the electric 23 
distribution cooperative or the electric generation and transmission 24 
cooperative, that: 25 
 (A)  The costs were reasonable and prudently incurred at 26 
the time those costs were incurred; 27 
 (B)  The circumstance of the abandonment before completion 28 
or indefinite construction suspension is reasonable; or 29 
 (C)  A customer or customers have paid all or a portion of 30 
the cost of the strategic investments through a contribution in aid of 31 
construction, special rate contract, or other form of payment. 32 
 (3)(A)  An electric distribution cooperative or an electric 33 
generation and transmission cooperative may request recovery of any costs for 34 
strategic investments that are abandoned before completion or for which 35 
construction has been indefinitely suspended and that are removed from 36    	SB307 
 
 	40 	02/25/2025 4:06:48 PM ANS209 
recovery through the rider under this subchapter in a separate proceeding. 1 
 (B)  The commission shall determine: 2 
 (i)  Whether recovery of those costs is in the public 3 
interest; and 4 
 (ii)  The form and timing of recovery through rates 5 
charged to customers. 6 
 (f)(1)(A)  An electric distribution cooperative’s or an electric 7 
generation and transmission cooperative’s total amount of revenue increase 8 
from an annual update to the rider under this subchapter shall not result in 9 
the electric distribution cooperative’s or the electric generation and 10 
transmission cooperative’s rates exceeding a level ten percent (10%) below 11 
the national average for all sectors calculated using the same method as that 12 
used by the United States Energy Information Administration and published in 13 
its most recent editions of the Electric Power Annual report for electric 14 
public utilities as adopted by the commission by rule and calculated using 15 
data from the same calendar year as the United States Energy Information 16 
Administration publication to which the electric distribution cooperative's 17 
or the electric generation and transmission cooperative’s revenue increase is 18 
compared. 19 
 (B)  If an electric distribution cooperative or an electric 20 
generation and transmission cooperative provides substantial evidence 21 
demonstrating that the electric distribution cooperative's or the electric 22 
generation and transmission cooperative's rates will remain capable of 23 
attracting or retaining economic development opportunities for the state even 24 
if the rates exceed a level of ten percent (10%) below national average and 25 
that doing so is in the public interest, then the commission shall approve 26 
the revenue increase. 27 
 (2)(A)  If the commission approves a revenue increase for an 28 
electric distribution cooperative or an electric generation and transmission 29 
cooperative from an annual update to the rider under this subchapter that 30 
results in the electric distribution cooperative's or the electric generation 31 
and transmission cooperative's rates exceeding a level ten percent (10%) 32 
below the national average, the commission shall submit a letter to the 33 
cochairs of the Legislative Council notifying the General Assembly that the 34 
commission has approved a revenue increase for the electric distribution 35 
cooperative or the electric generation and transmission cooperative from an 36    	SB307 
 
 	41 	02/25/2025 4:06:48 PM ANS209 
annual update to the rider under this subchapter that has resulted in the 1 
electric distribution cooperative’s or the electric generation and 2 
transmission cooperative’s total rates, inclusive of all riders, that exceeds 3 
a level ten percent (10%) below the national average. 4 
 (B)  Unless the commission approves an increase in the 5 
total amount of revenue increase from an annual update to the rider under 6 
this subchapter that exceeds a level ten percent (10%) below the national 7 
average for all sectors under subdivision (g)(1)(A) of this section, the 8 
electric distribution cooperative or the electric generation and transmission 9 
cooperative shall adjust an annual update as required under subsections (a)	—10 
(c) of this section to include only a revenue increase that results in rates 11 
that are ten percent (10%) below the national average. 12 
 (C)  The commission shall verify that an annual update to 13 
the rider under subsections (a) —(c) of this section does not include a 14 
revenue increase that results in rates exceeding a level ten percent (10%) 15 
below the national average unless it authorizes a greater amount under 16 
subdivision (f)(1)(A). 17 
 (g)  The commission shall submit an annual report to the Legislative 18 
Council describing the strategic investments included in the rider under this 19 
subchapter for each electric distribution cooperative or electric generation 20 
and transmission cooperative and indicating the change in rates resulting 21 
from each electric distribution cooperative's or electric generation and 22 
transmission cooperative's annual update to the rider under this subchapter 23 
on the electric distribution cooperative's or the electric generation and 24 
transmission cooperative’s rates. 25 
 (h)(1)  Each electric distribution cooperative or electric generation 26 
and transmission cooperative shall submit an annual report to the commission 27 
describing the electric distribution cooperative or the electric generation 28 
and transmission cooperative generation portfolio mix based on the generation 29 
capacity mix and based on the energy mix. 30 
 (2)  The commission shall submit an annual report to the 31 
Legislative Council describing the generation portfolio mix based on the 32 
generation capacity mix and based on the energy mix for an electric 33 
distribution cooperative or an electric generation and transmission 34 
cooperative. 35 
 (i)  Once strategic investments that are subject to a notice of intent 36    	SB307 
 
 	42 	02/25/2025 4:06:48 PM ANS209 
to construct under § 23 -3-201(b)(7) or § 23-18-510(f)(1) is complete and in 1 
service, an electric distribution cooperative or an electric generation and 2 
transmission cooperative shall: 3 
 (1)  Reconcile the actual expenditures and any projected amounts 4 
included in the rider under this subchapter to recover strategic investments; 5 
 (2)  Net any differences in projected amounts and actual 6 
expenditures; and 7 
 (3)  Either: 8 
 (A)  Reduce the amounts ultimately capitalized by any over -9 
collection; or 10 
 (B)  Recover any under -collection through subsequent years’ 11 
rider to recover strategic investments filings. 12 
 (j)  For recovery through the rider, an electric distribution 13 
cooperative or an electric generation and transmission cooperative shall give 14 
priority to strategic investments in new electric generation and transmission 15 
facilities located in Arkansas, unless: 16 
 (1)  The electric distribution cooperative or the electric 17 
generation and transmission cooperative demonstrates, and the commission 18 
finds that a strategic investment in new electric generation and transmission 19 
facilities located outside of Arkansas provides greater benefits to the 20 
electric distribution cooperative's or an electric generation and 21 
transmission cooperative’s customers in Arkansas than a comparable strategic 22 
investment in new electric generation and transmission facilities located in 23 
Arkansas; 24 
 (2)  A comparable strategic investment in new electric generation 25 
or transmission facility is not available or cannot be constructed in 26 
Arkansas; or 27 
 (3)  A customer or customers contract to pay all or a portion of 28 
the cost of the strategic investment in the resource through a special rate 29 
contract, a renewable rate schedule, a contribution in aid of construction,  30 
or other form of payment. 31 
 32 
 23-4-1308.  Recovery of advanced energy technologies and feasibility 33 
studies under strategic investments rider — Definition. 34 
 (a)(1)(A)  Upon a finding by the Arkansas Public Service Commission 35 
that advanced energy technologies are in the public interest, a public 36    	SB307 
 
 	43 	02/25/2025 4:06:48 PM ANS209 
utility may elect to pursue strategic investments in the advanced energy 1 
technologies and shall recover strategic investments in the advanced energy 2 
technologies through the rider obtained under this subchapter after a 3 
commission order approving an application under § 23 -3-201 et seq. or § 23-4 
18-501 et seq., a notice under § 23 -18-104, or any other application related 5 
to the sighting or prudence of the decision to invest in strategic 6 
investments. 7 
 (B)  The commission may find that advanced energy 8 
technologies are in the public interest under subdivision (a)(1)(A) of this 9 
section by considering whether those advanced energy technologies are: 10 
 (i)  Technically feasible; 11 
 (ii)  Commercially and financially viable; and 12 
 (iii)  Otherwise beneficial to customers in Arkansas. 13 
 (2)(A)  A facility using advanced energy technologies that are in 14 
use by a public utility in Arkansas to serve customers, including without 15 
limitation nuclear generation or hydroelectric generation, pumped or run	-of-16 
river, is not subject to subdivision (a)(1)(A) of this section. 17 
 (B)  A public utility may recover the costs of feasibility 18 
studies and strategic investments in advanced energy technologies that are 19 
currently being used or have been used by the public utility in Arkansas to 20 
serve customers through a rider obtained under this subchapter. 21 
 (3)  As used in this section, "advanced energy technologies" 22 
includes without limitation: 23 
 (A)  Modular nuclear reactors; 24 
 (B)  New technologies for nuclear generation technologies; 25 
 (C)  Hydrogen-fueled generation technologies; 26 
 (D)  Geothermal generation technologies; 27 
 (E)  Renewable natural gas technologies; 28 
 (F)  Hydrogen technologies; 29 
 (G)  Biomass generation technologies; 30 
 (H)  Hydroelectric generation technologies; and 31 
 (I)  Emissions capture and sequestration equipment or 32 
facilities associated with any new or existing major utility facility as 33 
defined in the Utility Facility Environmental and Economic Protection Act, § 34 
23-18-501 et seq., or other electric transmission facilities or natural gas 35 
transmission facilities by a public utility that are: 36    	SB307 
 
 	44 	02/25/2025 4:06:48 PM ANS209 
 (i)  Required by state law or rule or federal 1 
regulation; 2 
 (ii)  Paid for in total or in part by a customer or 3 
customers through a special rate contract, a contribution in aid of 4 
construction, or other form of payment; or 5 
 (iii)  Otherwise found by the commission to be in the 6 
public interest. 7 
 (b)  A public utility shall monitor and evaluate advancements in 8 
modular nuclear reactors and other new nuclear generation technologies and 9 
evaluate the resources as part of the public utility's resource planning once 10 
those technologies become in the public interest considering without 11 
limitation whether or not those technologies become technically feasible, 12 
commercially and financially viable, and otherwise beneficial to customers in 13 
Arkansas. 14 
 (c)  For strategic investments approved by the commission, a public 15 
utility may elect to, and upon election may recover strategic investments in 16 
advanced energy technologies and feasibility studies through a rider under 17 
this section.  18 
 (d)  Upon election by a public utility, the commission shall authorize 19 
a public utility to recover the reasonable and prudently incurred costs of 20 
studying the feasibility of advanced energy technologies, including the cost 21 
of engineering and economic analyses to assess the technical, financial, and 22 
commercial feasibility of implementing and using advanced energy technologies 23 
to serve customers in Arkansas through the rider to recover strategic 24 
investments under this section for feasibility studies of advanced energy 25 
technologies associated with strategic investments that are approved by the 26 
commission. 27 
 (2)  For all other feasibility studies of advanced energy 28 
technologies, the commission shall authorize a public utility to recover the 29 
reasonable and prudently incurred cost of the feasibility study and shall 30 
determine the form and timing of recovery through rates charged to customers. 31 
 32 
 23-4-1309.  Authorization of special rate contracts. 33 
 (a)(1)  An investor-owned electric utility or an investor -owned natural 34 
gas utility may enter into a special rate contract to serve a new or existing 35 
customer location in Arkansas.  36    	SB307 
 
 	45 	02/25/2025 4:06:48 PM ANS209 
 (2)  If the Arkansas Public Service Commission finds that the 1 
special rate contract under subdivision (a)(1) of this section is consistent 2 
with the public interest, the commission shall enter an order approving the 3 
special rate contract within ninety (90) days after an investor -owned 4 
electric utility or an investor -owned natural gas utility files an 5 
application for approval.  6 
 (3)  If the commission finds that a special rate contract in the 7 
application is inconsistent with the public interest under subdivision (b)(2) 8 
of this section, the commission shall: 9 
 (A)  Enter an order describing the provisions that are not 10 
consistent with the public interest; and 11 
 (B)  Provide an opportunity for the investor -owned electric 12 
utility or the investor -owned natural gas utility to file an amended 13 
application to remedy the identified insufficiencies.  14 
 (4)(A)  If an investor -owned electric utility or an investor -15 
owned natural gas utility files an amended application remedying those 16 
provisions, the commission shall enter an order approving the special rate 17 
contract in the application within thirty (30) days after the investor	-owned 18 
electric utility's or the investor -owned natural gas utility's filing. 19 
 (B)  If the commission determines that approving the 20 
contract is inconsistent with the public interest, in its order denying 21 
approval of the contract, the commission shall include a discussion of: 22 
 (i)  The basis for the commission's findings; and 23 
 (ii)  The specific evidence or information provided 24 
by the investor-owned electric utility or an investor -owned natural gas 25 
utility as part of its application upon which the commission relied to reach 26 
that conclusion in its order. 27 
 (C)(i)  If an investor -owned electric utility or an 28 
investor-owned natural gas utility submits additional evidence or other 29 
information demonstrating that the contract is in the public interest, the 30 
commission shall enter an order approving the contract within thirty (30) 31 
days after its filing unless the commission determines that approving the 32 
contract is inconsistent with the public interest. 33 
 (ii)  If the commission determines that approving the 34 
contract is inconsistent with the public interest, in its order denying 35 
approval of the contract, the commission shall include a discussion of: 36    	SB307 
 
 	46 	02/25/2025 4:06:48 PM ANS209 
 (a)  The basis for the commission's findings; 1 
and 2 
 (b)  The specific evidence or information 3 
provided by the investor -owned electric utility or the investor -owned natural 4 
gas utility as part of its application upon which the commission relied to 5 
reach that conclusion in its order. 6 
 (iii)  The process outlined in subdivision (a)(4) of 7 
this section may continue until the commission finds that: 8 
 (a)  Approving the contract is in the public 9 
interest; 10 
 (b)  The investor-owned electric utility or the 11 
investor-owned natural gas utility withdraws its application; or 12 
 (c)  The investor-owned electric utility or an 13 
investor-owned natural gas utility appeals the commission's decision. 14 
 (b)(1)  An investor-owned electric utility or an investor -owned natural 15 
gas utility shall be authorized to develop and implement rates and other 16 
contract provisions to recover all or part of the cost of any strategic 17 
investments necessary to serve the customer as part of the special rate 18 
contract if the investor -owned electric utility or the investor -owned natural 19 
gas utility demonstrates that doing so is in the public interest. 20 
 (2)  As part of a special rate contract, the investor -owned 21 
electric utility or the investor -owned natural gas utility is authorized to 22 
set forth customer rates and other contract terms attributable to all or part 23 
of the cost of any strategic investments through various cost recovery 24 
methods, including without limitation: 25 
 (A)  A contribution in aid of construction; 26 
 (B)  Any other contribution toward the cost of the 27 
strategic investments; 28 
 (C)  As part of the customer's monthly rate; 29 
 (D)  A customer prepayment or other charge; 30 
 (E)  Prepaid allowance for funds used during construction; 31 
or 32 
 (F)  As part of a minimum bill provision. 33 
 (c)  An electric cooperative corporation that is established under the 34 
Electric Cooperative Corporation Act, § 23 -18-301 et seq., including any 35 
electric generation and transmission cooperative, may facilitate the recovery 36    	SB307 
 
 	47 	02/25/2025 4:06:48 PM ANS209 
of all or part of the cost in subsections (a) and (b) of this section through 1 
one (1) or more riders under this subchapter. 2 
 (d)  This section does not alter or diminish the commission’s authority 3 
over an electric utility’s allocated service territory, including without 4 
limitation where the commission has authorized an electric utility to serve 5 
within a municipality, territorial district, or other geographic area. 6 
 7 
 23-4-1310.  Authorization for alternative methods of financing. 8 
 (a)  An electric utility or a natural gas utility may use alternative 9 
methods of financing for the purpose of financing strategic investments under 10 
this subchapter. 11 
 (b)  The alternative methods of financing may include without 12 
limitation:  13 
 (1)  Sale-leaseback agreements; 14 
 (2)  Third-party financing or customer financing; or 15 
 (3)  Other methods of financing.  16 
 (c)(1)  The Arkansas Public Service Commission shall not disallow, 17 
impute alternative values, or adjust the financing under this section unless 18 
the commission determines based on substantial evidence that: 19 
 (A)  The financing is unreasonable; 20 
 (B)  The costs are not prudently incurred; or 21 
 (C)  The financing is detrimental to customers. 22 
 (2)(A)  If an electric utility or a natural gas utility files 23 
additional evidence or other information demonstrating that the financing is 24 
reasonable and in the public interest, the commission shall enter an order 25 
approving the financing within thirty (30) days after its filing if the 26 
commission determines that approving the financing is consistent with the 27 
public interest. 28 
 (B)  If the commission determines that approving the 29 
financing is inconsistent with the public interest, in its order denying 30 
approval of the financing, the commission shall include a discussion of: 31 
 (i)  The basis for the commission's findings; and 32 
 (ii)  The specific evidence or information provided 33 
by the electric utility or the natural gas utility as part of its application 34 
upon which the commission relied to reach that conclusion in its order. 35 
 (C)(i)  If an electric utility or a natural gas utility 36    	SB307 
 
 	48 	02/25/2025 4:06:48 PM ANS209 
submits additional evidence or other information demonstrating that the 1 
financing is in the public interest, the commission shall enter an order 2 
approving the contract within thirty (30) days after its filing unless the 3 
commission determines that approving the financing is inconsistent with the 4 
public interest. 5 
 (ii)  If the commission determines that approving the 6 
financing is inconsistent with the public interest, in its order denying 7 
approval of the financing, the commission shall include a discussion of: 8 
 (a)  The basis for the commission's findings; 9 
and 10 
 (b)  The specific evidence or information 11 
provided by the electric utility or the natural gas utility as part of its 12 
application upon which the commission relied to reach that conclusion in its 13 
order. 14 
 (D)  The process outlined in subdivision (c)(2) of this 15 
section may continue until the commission finds that: 16 
 (i)  Approving the financing is in the public 17 
interest; 18 
 (ii)  The electric utility or the natural gas utility 19 
withdraws its application; or 20 
 (iii)  The electric utility or the natural gas 21 
utility appeals the commission's decision. 22 
 23 
 23-4-1311.  Rules. 24 
 (a)  The Arkansas Public Service Commission shall amend its rules as 25 
required to implement and administer this subchapter. 26 
 (b)  The commission shall initiate a proceeding to establish any new 27 
rules or modify any existing rules necessary to administer this subchapter 28 
and any other applicable exemptions under this subchapter. 29 
 (c)  The commission shall enter an order approving the rules necessary 30 
to administer this subchapter before March 31, 2026. 31 
 (d)  An electric public utility or a natural gas public utility shall 32 
be authorized to file an application under this section after the effective 33 
date of this act before the commission completes any modification to its 34 
rules necessary to carry out this section. 35 
 36    	SB307 
 
 	49 	02/25/2025 4:06:48 PM ANS209 
 SECTION 17.  Arkansas Code § 23 -18-104 is amended to read as follows: 1 
 23-18-104.  Construction of power -generating facilities outside the 2 
state Arkansas. 3 
 (a)  No Except as provided under subsection (c) of this section, an 4 
electric public utility subject to the jurisdiction of the Arkansas Public 5 
Service Commission shall not commence construction of any power-generating 6 
electric generating facility that is a major utility facility to be located 7 
outside the boundaries of this state without the express written approval of 8 
the commission. 9 
 (b)(1) Any An electric public utility proposing such construction 10 
shall render adequate written notice to the commission of its intent in order 11 
that the commission may conduct any germane inspection, investigation, public 12 
hearing, or take any other action deemed appropriate by the commission. 13 
 (2)  An electric public utility or natural gas public utility 14 
shall provide notice to the commission of its intent to recover any strategic 15 
investments, as defined under § 23 -4-1303, subject to the Generating Arkansas 16 
Jobs Act of 2025, § 23 -4-1301 et seq. as part of an application for a 17 
certificate of public convenience and necessity under § 23 -3-201 et seq.  18 
 (c)  Failure on the part of any electric public utility to obtain prior 19 
approval of the commission, as established in this section, shall constitute 20 
grounds for disallowance by the commission of all costs and expenses 21 
associated with the construction and subsequent operation of the facility 22 
when computing the electric public utility's cost of service for purposes of 23 
any rate-making proceedings. 24 
 (d)(1)  If the commission determines that approving an electric public 25 
utility's application to construct an electric generating facility located 26 
outside of Arkansas that is a major utility facility is consistent with the 27 
public interest, the commission shall enter an order granting approval of the 28 
electric public utility's application within six (6) months after the 29 
electric public utility submits its notice of intent to construct electric 30 
generating facilities under this section. 31 
 (2)(A)  If the commission determines that granting approval of an 32 
application to construct an electric generating facility located outside of 33 
Arkansas that is a major utility facility is not in the public interest, the 34 
commission shall enter an order. 35 
 (B)  In the order entered by the commission under 36    	SB307 
 
 	50 	02/25/2025 4:06:48 PM ANS209 
subdivision (d)(2)(A) of this section, the commission shall discuss: 1 
 (i)  The basis for the commission's determination; 2 
and 3 
 (ii)  Any evidence or other information submitted by 4 
the electric public utility as part of its notice or application upon which 5 
that the commission relied to reach that determination. 6 
 (3)(A)(i)  If an electric public utility submits additional 7 
evidence or other information demonstrating that the construction of an 8 
electric generating facility located outside of Arkansas that is a major 9 
utility facility is reasonable, necessary, and in the public interest, then 10 
the commission shall enter an order granting its approval within thirty (30) 11 
days after the date of the electric public utility’s filing. 12 
 (ii)(a)  If the commission finds that the electric 13 
public utility’s filing fails to comply with this subchapter, the commission 14 
shall enter an order. 15 
 (b)  In the order entered by the commission 16 
under subdivision (d)(3)(A)(ii)(a) of this section, the commission shall 17 
discuss: 18 
 (1)  The basis for the commission's 19 
findings; and 20 
 (2)  Any evidence or other information 21 
submitted by the electric public utility as part of its notice or application 22 
that the commission finds did not comply with this subchapter.  23 
 (B)  The process described in subdivision (d)(2) of this 24 
section and this subdivision (d)(3) may continue until the commission finds 25 
that: 26 
 (i)  The electric public utility’s application 27 
complies with this subchapter; 28 
 (ii)  The electric public utility withdraws its 29 
application; or 30 
 (iii)  The electric public utility appeals the 31 
commission's decision. 32 
 (d)(e) Any electric public utility which does not own in whole or in 33 
part another electric public utility and which is not owned in whole or in 34 
part by a holding company and which derives less than twenty -five percent 35 
(25%) of its total revenues from Arkansas customers is exempt from the 36    	SB307 
 
 	51 	02/25/2025 4:06:48 PM ANS209 
provisions of this section. 1 
 2 
 SECTION 18.  Arkansas Code § 23 -18-202, concerning the jurisdiction of 3 
the Arkansas Public Service Commission, is amended to add an additional 4 
subsection to read as follows: 5 
 (c)  An approval shall not be required from the commission for 6 
borrowings, loan contracts, notes, mortgages, or guarantees from other public 7 
or private sources that have been approved by a majority of the board of 8 
directors of an electric cooperative corporation formed under the Electric 9 
Cooperative Corporation Act, § 23 -18-301 et seq. 10 
 11 
 SECTION 19.  Arkansas Code § 23 -18-502(a), concerning the legislative 12 
findings under the Utility Facility Environmental and Economic Protection 13 
Act, is amended to add an additional subdivision to read as follows: 14 
 (4)  Furthermore, it is necessary to reform the certification 15 
process for construction of major utility facilities under this subchapter to 16 
expedite the certification process and reduce the regulatory and 17 
administrative burdens associated with the certification process. 18 
 19 
 SECTION 20.  Arkansas Code § 23 -18-503, concerning the definitions used 20 
under the Utility Facility Environmental and Economic Protection Act, is 21 
amended to add additional subdivisions to read as follows: 22 
 (16)  "Gas transmission line" means a natural gas pipeline or 23 
connected series of natural gas pipelines, other than a gathering line, that: 24 
 (A)  Transports gas from a gathering pipeline or natural 25 
gas storage facility to a distribution center or to a large volume customer 26 
using similar volumes of gas as a distribution center and is not located 27 
downstream from a distribution center; 28 
 (B)  Has a maximum allowable operating pressure of twenty 29 
percent (20%) or more of specified minimum yield strength; 30 
 (C)  Transports gas within a storage field; or 31 
 (D)  Is voluntarily or otherwise designated by the operator 32 
as a transmission pipeline; and 33 
 (17)  "Strategic investments" means the same as defined in § 23 -34 
4-1303. 35 
 36    	SB307 
 
 	52 	02/25/2025 4:06:48 PM ANS209 
 SECTION 21.  Arkansas Code § 23 -18-503(6), concerning the definition of 1 
"major utility facility" under the Utility Facility Environmental and 2 
Economic Protection Act, is amended to read as follows: 3 
 (6)  “Major utility facility” means: 4 
 (A)  An A single electric generating plant and associated 5 
transportation and storage facilities for fuel and other facilities designed 6 
for or capable of operation at a capacity of fifty megawatts (50 MW) or more; 7 
 (B)  For the sole purpose of requiring an environmental 8 
impact statement under this subchapter, an electric transmission line and 9 
associated facilities including substations of: 10 
 (i)  A design voltage of one hundred kilovolts (100 11 
kV) or more and extending a distance of more than ten (10) miles; or 12 
 (ii)  A design voltage of one hundred seventy 13 
kilovolts (170 kV) or more and extending a distance of more than one (1) 14 
mile; or 15 
 (C)  For the sole purpose of requiring an environmental 16 
impact statement under this subchapter, a A gas transmission line and 17 
associated facilities designed for or capable of transporting gas at 18 
pressures in excess of one hundred twenty -five pounds per square inch (125 19 
psi) and extending a distance of more than one (1) mile five (5) miles except 20 
gas pipelines devoted solely to the gathering of gas from gas wells 21 
constructed within the limits of any gas field as defined by the Oil and Gas 22 
Commission; 23 
 24 
 SECTION 22.  Arkansas Code § 23 -18-504(a), concerning exemptions for a 25 
major utility facility under the Utility Facility Environmental and Economic 26 
Protection Act, is amended to read as follows: 27 
 (a)(1) This subchapter does not apply to a major utility facility: 28 
 (1)(A)  That is located outside of Arkansas; 29 
 (B) For which, before July 24, 1973, an application for 30 
the approval of the major utility facility was made to any federal, state, 31 
regional, or local governmental agency that possesses the jurisdiction to 32 
consider the matters prescribed for finding and determination in § 23	-18-33 
519(a) and (b); 34 
 (2)(C) For which, before July 24, 1973, the Arkansas 35 
Public Service Commission issued a certificate of convenience and necessity 36    	SB307 
 
 	53 	02/25/2025 4:06:48 PM ANS209 
or otherwise approved the construction of the major utility facility; 1 
 (3)(D) Over which an agency of the federal government has 2 
exclusive jurisdiction; 3 
 (4)(E) A majority of which is owned by one (1) or more 4 
exempt wholesale generators as defined in § 23 -1-101(5); 5 
 (5)(F) That is a major utility facility for generating 6 
electric energy, if the majority of the major utility facility is owned by 7 
any person, including without limitation a public utility that will not 8 
recover the cost of the major utility facility in rates subject to regulation 9 
by the commission; or 10 
 (6)(G) That is a gas pipeline of less than five (5) miles 11 
in length constructed: 12 
 (A)(i) Primarily for serving a single customer or a 13 
group of customers that is under common ownership or control; 14 
 (B)(ii) For use by the customer or group of 15 
customers that have entered into a lease to facilitate the issuance of bonds 16 
under Title 14, Chapter 164 of this Code; and 17 
 (C)(iii) Entirely on land: 18 
 (i)(a) Owned by the customer or group of 19 
customers to be served; or 20 
 (ii)(b) Leased by the customer or group of 21 
customers to be served. 22 
 23 
 SECTION 23.  Arkansas Code § 23 -18-508 is amended to read as follows: 24 
 23-18-508.  Rules. 25 
 (a) The Arkansas Public Service Commission shall have and is granted 26 
the power and authority to make and amend from time to time after reasonable 27 
notice and hearing reasonable rules establishing exemptions from some or all 28 
of the requirements of this subchapter for the construction, reconstruction, 29 
or expansion of any major utility facility which is unlikely to have major 30 
adverse environmental or economic impact by reason of length, size, location, 31 
available space, or right -of-way on or adjacent to existing utility 32 
facilities, and similar reasons.  33 
 (b)  The commission shall: 34 
 (1)  Initiate a proceeding to modify any existing rules necessary 35 
to administer this subchapter and any other applicable exemptions under this 36    	SB307 
 
 	54 	02/25/2025 4:06:48 PM ANS209 
subchapter; and 1 
 (2)  Enter an order modifying any existing rules on or before 2 
March 31, 2026. 3 
 (c)  An electric or natural gas public utility shall be authorized to 4 
file an application under this section after the effective date of this act 5 
before the commission completes any modification of its rules necessary to 6 
carry out this section. 7 
 8 
 SECTION 24.  Arkansas Code § 23 -18-510 is amended to read as follows: 9 
 23-18-510.  Certificate of environmental compatibility and public need 10 
— Requirement — Exceptions. 11 
 (a)(1)  Except for persons exempted as provided in subsection (c) of 12 
this section and § 23 -18-504(a) and § 23-18-508, a person shall not begin 13 
construction of a major utility facility in the state without first obtaining 14 
a certificate of environmental compatibility and public need for the major 15 
utility facility from the Arkansas Public Service Commission. 16 
 (2)(A) The replacement, reconfiguration, or expansion of an 17 
existing transmission facility with a similar facility in substantially the 18 
same location or the rebuilding, upgrading, modernizing, or reconstruction 19 
for the purposes of increasing capacity or reusing a generation or 20 
transmission interconnection shall not constitute construction of a major 21 
utility facility if no increase in width of right -of-way is required. 22 
 (B)  In the instance of a generation facility that would 23 
meet the requirements of subdivision (a)(2)(A) of this section but for an 24 
increase in the width of the right -of-way caused by replacement, 25 
reconfiguration, or expansion of a transmission or related facility, the 26 
commission shall consider the generation facility separately from any 27 
transmission or related facilities to be under separate construction. 28 
 (b)(1) An entity, including without limitation a person, public 29 
utility, utility, regional transmission organization, municipality, merchant 30 
transmission provider, merchant generator, or other entity, whether regulated 31 
or not by the commission, shall not begin construction of an electric 32 
transmission line and associated facilities, as described in § 23 -18-33 
503(6)(B), within a national interest electric transmission corridor without 34 
first obtaining a certificate of environmental compatibility and public need 35 
for the facility from the commission. 36    	SB307 
 
 	55 	02/25/2025 4:06:48 PM ANS209 
 (2)  An electric public utility or a natural gas public utility 1 
shall provide notice to the commission of its intent to construct to recover 2 
any strategic investments, as defined under § 23 -4-1303, subject to the 3 
Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. as part of an 4 
application for a certificate of public convenience and necessity under § 23	-5 
3-201 et seq. 6 
 (c)  This subchapter does not require a certificate of environmental 7 
compatibility and public need or an amendment of such a certificate for: 8 
 (1)  Reconstruction, alteration, or relocation of a major utility 9 
facility that must be reconstructed, altered, or relocated because of the 10 
requirements of a federal, state, or county governmental body or agency for 11 
purposes of highway transportation, public safety, or air and water quality; 12 
or 13 
 (2)  An electric transmission line and associated facilities 14 
including substations of a design voltage of one hundred kilovolts (100 kV) 15 
or more to be constructed or operated by a municipal electric utility system 16 
that is located within the territorial limits of the municipal electric 17 
utility system. 18 
 (d)  An entity granted a certificate of environmental compatibility and 19 
public need pursuant to subsection (b) of this section shall have the right 20 
of eminent domain as provided by Arkansas law for the limited purpose of 21 
constructing the certificated electric transmission line and associated 22 
facilities, as described in § 23 -18-503(6)(B), to the extent that the 23 
facility is located within a national interest electric transmission 24 
corridor. 25 
 (e)(1)  Strategic investments in major utility facilities under § 23	-26 
18-503(7)(A) located on the same or adjacent property or in the same rights	-27 
of-way or adjacent rights -of-way by a public utility are exempt from this 28 
subchapter but shall be subject to the requirements of § 23 -3-201 et seq. 29 
 (2)  The purchase of a major utility facility constructed by a 30 
third party for that third party, upon completion of construction or at any 31 
time after completion of construction, by a public utility is exempt from 32 
this subchapter but shall be subject to the requirements of § 23 -3-201 et 33 
seq. 34 
 (3)  Except as provided in this section, this section does not 35 
alter the powers and authority of the commission. 36    	SB307 
 
 	56 	02/25/2025 4:06:48 PM ANS209 
 1 
 SECTION 25.  Arkansas Code § 23 -18-513 is amended to read as follows: 2 
 23-18-513.  Application for certificate — Service or notice of 3 
application. 4 
 (a)  Each public utility filing an application for a certificate of 5 
environmental compatibility and public need shall be accompanied by proof of 6 
service of a copy of the application on provide notice of its application as 7 
the Arkansas Public Service Commission may require. 8 
 (b)  Each application submitted under subsection (a) of this section 9 
shall be accompanied by proof of notice of the application to : 10 
 (1)  The mayor of each municipality; 11 
 (2)  The county judge; 12 
 (3)  The chair of the county planning board, if any; 13 
 (4)  Any head of a governmental agency charged with the duty of 14 
protecting the environment or of planning land use, upon which the Arkansas 15 
Public Service Commission has by rule or order directed that service be made, 16 
in the area in which any portion of such facility is to be located, both as 17 
primarily and as alternatively proposed; 18 
 (5)  Each member of the General Assembly in whose district the 19 
facility or any alternative location listed in the application is to be 20 
located; 21 
 (6)  The office of the Governor; and 22 
 (7)  The director or other administrative head of the following 23 
state agencies or departments: 24 
 (A)  Division of Environmental Quality; 25 
 (B)  Department of Health; 26 
 (C)  Arkansas Economic Development Commission; 27 
 (D)  Arkansas Department of Transportation; 28 
 (E)  Arkansas State Game and Fish Commission; 29 
 (F)  Arkansas Natural Heritage Commission; 30 
 (G)  Any state agency which may have the authority to 31 
assist in financing the applicant's facility; 32 
 (H)  Any other state agency or department which manages or 33 
has jurisdiction over state -owned lands on which all or part of the proposed 34 
utility facility is to be or may be located; 35 
 (I)  Department of Finance and Administration; 36    	SB307 
 
 	57 	02/25/2025 4:06:48 PM ANS209 
 (J)  State Energy Conservation and Policy Office 1 
[abolished]; 2 
 (K) The office of the Attorney General; and 3 
 (L)(K) Any other state agency or department designated by 4 
Arkansas Public Service Commission rule or order ; and 5 
 (8)  Proof that a copy of the application has been made available 6 
for public inspection at all public libraries in each county in which the 7 
proposed utility facility is to be or may be located . 8 
 (b)(c) The copy of the application shall be accompanied by a notice 9 
specifying the date on or about which the application is to be filed and a 10 
notice that interventions or limited appearances must be filed with the 11 
Arkansas Public Service Commission within thirty (30) days after the date set 12 
forth as the date of filing, unless good cause is shown pursuant to § 23	-18-13 
517. 14 
 (c)(1)(d)(1) Each application shall also be accompanied by proof that 15 
written notice specifying the date on or about which the application is to be 16 
filed and the date that interventions or limited appearances must be filed 17 
with the Arkansas Public Service Commission, unless good cause is shown 18 
pursuant to § 23-18-517, has been sent by certified mail to each owner of 19 
real property on the proposed route selected by the public utility on which a 20 
major utility facility is to be located or constructed. 21 
 (2)  The written notice required by this subsection shall be 22 
directed to the address of the owner of the real property as it appears on 23 
the records in the office of the county sheriff or county tax assessor for 24 
the mailing of statements for taxes as provided in § 26 -35-705. 25 
 (d)(1)(e) Each application shall also be accompanied by proof that 26 
public notice of the application was given to persons residing in 27 
municipalities and counties entitled to receive notice under subsection 	(a) 28 
(b) of this section by the publication in a newspaper having substantial 29 
circulation in the municipalities or counties of: 30 
 (A)(1) A summary of the application; 31 
 (B)(2) A statement of the date on or about which it is to be 32 
filed; and 33 
 (C)(3) A statement that intervention or limited appearances 34 
shall be filed with the Arkansas Public Service Commission within thirty (30) 35 
days after the date stated in the notice, unless good cause is shown under § 36    	SB307 
 
 	58 	02/25/2025 4:06:48 PM ANS209 
23-18-517. 1 
 (2)(A)(4) For purposes of this subsection, an environmental 2 
impact statement submitted as an exhibit to the application need not be 3 
summarized, but the published notice shall include a statement that the 4 
impact statements are on file at the office of the Arkansas Public Service 5 
Commission and available for public inspection or are available 6 
electronically on the Arkansas Public Service Commission's website. 7 
 (B)  The applicant shall also cause copies of the 8 
environmental impact statement to be furnished to at least one (1) of its 9 
local offices, if any, in the counties in which any portion of the major 10 
utility facilities are to be located, both as primarily or as alternatively 11 
proposed, to be there available for public inspection. 12 
 (C)  The published notice shall contain a statement of the 13 
location of the local offices described in subdivision (d)(2)(B) of this 14 
section and the times the impact statements will be available for public 15 
inspection. 16 
 (e)(f) Inadvertent failure of service on or notice to any of the 17 
municipalities, counties, governmental agencies, or persons identified in 18 
subsections (a) and (c) (b) and (d) of this section may be cured pursuant to 19 
orders of the Arkansas Public Service Commission designed to afford such 20 
persons adequate notice to enable their effective participation in the 21 
proceedings. 22 
 (f)(g) In addition, after filing, the Arkansas Public Service 23 
Commission may require the applicant to serve notice of the application or 24 
copies thereof, or both, upon such other persons and file proof thereof, as 25 
the Arkansas Public Service Commission may deem appropriate. 26 
 (g)(h) Where any personal service or notice is required in this 27 
section, the service may be made by any officer authorized by law to serve 28 
process, by personal delivery, or by certified mail. 29 
 30 
 SECTION 26.  Arkansas Code § 23 -18-514 is repealed. 31 
 23-18-514.  Application for certificate — Commentary by state agencies 32 
— Deficiency letters. 33 
 (a)(1)  Promptly after the filing of an application for a certificate 34 
of environmental compatibility and public need, the staff of the Arkansas 35 
Public Service Commission shall invite comments from all state agencies 36    	SB307 
 
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entitled to service under § 23 -18-513 as to the adequacy of applicant's 1 
statements. 2 
 (2)  The invitation to comment shall advise the state agencies 3 
that comments must be received within sixty (60) days of the date of mailing 4 
or delivery thereof, unless an agency requests for cause a longer period for 5 
consideration. 6 
 (b)(1)  Upon review of the comments, if any, if the staff shall 7 
determine that the applicant failed to include or adequately develop any 8 
relevant environmental or economic aspect of the facility, it shall issue a 9 
deficiency letter pointing out in detail all such specific deficiencies in 10 
the statements. 11 
 (2)  The deficiency letter shall be prepared and served upon the 12 
applicant as promptly as possible and in no event later than twenty (20) days 13 
before the date set for the public hearing. 14 
 (3)  The applicant shall promptly respond to any deficiency 15 
letter, and the public hearing shall be deferred unless the applicant has 16 
responded prior thereto to any deficiency letter. 17 
 18 
 SECTION 27.  Arkansas Code § 23 -18-516(a)(1), concerning hearings on 19 
applications or amendments, is amended to read as follows: 20 
 (a)(1)  Upon receipt of an application complying with §§ 23 -18-511 — 21 
23-18-514 23-18-513, the Arkansas Public Service Commission shall promptly 22 
fix a date for the commencement of a public hearing thereon, which date shall 23 
be not fewer than forty (40) days nor more than one hundred eighty (180) 24 
ninety (90) days after the receipt of the application, and shall conclude the 25 
proceedings as expeditiously as practicable. 26 
 27 
 SECTION 28.  Arkansas Code § 23 -18-517(a), concerning parties to 28 
certification proceedings, is amended to read as follows: 29 
 (a)  The parties to a certification proceeding shall include: 30 
 (1)  The applicant; or 31 
 (2)  Each municipality, county, and government agency or 32 
department or other person entitled to receive service of a copy of the 33 
application under § 23 -18-513(a) if it has filed with the Arkansas Public 34 
Service Commission a notice of intervention as a party within thirty (30) 35 
days after service; or 36    	SB307 
 
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 (3)  A person residing in a municipality or county that is 1 
entitled to receive service of a copy of the application under § 23 -18-513(a) 2 
or any domestic nonprofit corporation formed in whole or in part to promote 3 
conservation or natural beauty, to promote energy conservation, to protect 4 
the environment, personal health, or other biological values, to represent 5 
commercial and industrial groups, or to promote the orderly development of 6 
the areas in which the facility is to be located if the: 7 
 (A)  Person or organization has an interest that may be 8 
directly affected by the commission's action; 9 
 (B)  Interest is not adequately represented by other 10 
parties; and  11 
 (C)  Person A person or corporation that has petitioned the 12 
commission for leave to intervene as a party within thirty (30) days after 13 
the date given in the public notice as the date of filing the application. 14 
 15 
 SECTION 29.  Arkansas Code § 23 -18-519(a), concerning decisions of the 16 
Arkansas Public Service Commission and modifications of applications, is 17 
amended to read as follows: 18 
 (a)(1)  The Arkansas Public Service Commission shall render a decision 19 
upon the record either granting or denying the application as filed or 20 
granting it upon such terms, conditions, or modifications of the location, 21 
financing, construction, operation, or maintenance of the major utility 22 
facility as the commission may deem appropriate. 23 
 (2)  The record may include by reference the findings of the 24 
commission in an energy resource declaration -of-need proceeding that the 25 
utility needs additional energy supply resources or transmission resources. 26 
 (3)(A)  If the commission determines that granting a certificate 27 
of environmental compatibility and public need is in the public interest, it 28 
shall enter an order granting a certificate of environmental compatibility 29 
and public need within six (6) months after the receipt of the application. 30 
 (B)(i)  If the commission determines that granting a 31 
certificate of environmental compatibility and public need is not in the 32 
public interest, it shall enter an order. 33 
 (ii)  An order entered under subdivision (a)(3)(B)(i) 34 
of this section shall discuss: 35 
 (a)  The basis for the commission's findings; 36    	SB307 
 
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and 1 
 (b)  Any evidence upon which the commission 2 
relied to reach that conclusion in its order. 3 
 (C)(i)  If a public utility submits additional evidence 4 
demonstrating that the strategic investments in major utility facilities that 5 
are subject to this subchapter are reasonable, necessary, and in the public 6 
interest, the commission shall enter an order granting the certificate within 7 
thirty (30) days after the date of the public utility’s filing unless the 8 
commission finds that the strategic investments subject to this subchapter 9 
are not reasonable, necessary, or in the public interest. 10 
 (ii)  An order entered under subdivision (a)(3)(C)(i) 11 
of this section shall discuss: 12 
 (a)  The basis for the commission's findings; 13 
and 14 
 (b)  Any evidence or other information upon 15 
which the commission relied to reach that conclusion in its order. 16 
 (iii)  The process outlined in subdivision (a)(3)(B) 17 
of this section and this subdivision (a)(3)(C) may continue until the 18 
commission finds that: 19 
 (a)  The strategic investments subject to this 20 
subchapter are reasonable, necessary, and in the public interest; 21 
 (b)  The public utility withdraws its 22 
application; or 23 
 (c)  The public utility appeals the 24 
commission's decision. 25 
 26 
 SECTION 30.  Arkansas Code § 23 -18-521 is amended to read as follows: 27 
 23-18-521. Issuance of certificate — Effect. 28 
 (a)  A certificate to construct and operate a major utility facility 29 
may be issued only under this subchapter unless a certificate is not required 30 
under § 23-18-510(c) or 23-18-510(e). 31 
 (b)(1)  A certificate issued under this subchapter to an applicant is 32 
in lieu of and exempts the applicant from the requirements of obtaining a 33 
certificate of convenience and necessity under § 23 -3-201 et seq. 34 
 (2)  A certificate issued under this subchapter entitles the 35 
applicant to a permit under § 23 -3-501 et seq. without any further notice or 36    	SB307 
 
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hearing if the applicant has filed with the Arkansas Public Service 1 
Commission the consent or authorization required by § 23 -3-504(7) and paid 2 
the damages stated in § 23 -3-501 et seq. 3 
 (c)  If the applicant is a corporation, before a certificate can be 4 
issued under § 23-18-519, a certified copy of the articles of incorporation 5 
or charter shall be on file with the commission. 6 
 7 
 SECTION 31.  EMERGENCY CLAUSE.  It is found and determined by the 8 
General Assembly of the State of Arkansas that significant investment in 9 
electric public utility infrastructure and natural gas public utility 10 
infrastructure is required to enable this state to attract and serve economic 11 
development projects across a variety of industries, as well as to continue 12 
reliably supporting existing and new customers; that these economic 13 
development projects and the continued provision of reliable electric utility 14 
services and natural gas utility services are essential to the future of this 15 
state; and that this act is immediately necessary because strategic 16 
investments in electric public utility infrastructure and natural gas public 17 
utility infrastructure support the development of sites available for 18 
economic development projects. Therefore, an emergency is declared to exist, 19 
and this act being immediately necessary for the preservation of the public 20 
peace, health, and safety shall become effective on: 21 
 (1)  The date of its approval by the Governor; 22 
 (2)  If the bill is neither approved nor vetoed by the Governor, 23 
the expiration of the period of time during which the Governor may veto the 24 
bill; or 25 
 (3)  If the bill is vetoed by the Governor and the veto is 26 
overridden, the date the last house overrides the veto. 27 
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