Stricken language would be deleted from and underlined language would be added to present law.
Act 373 of the Regular Session
*ANS209* 03-11-2025 17:15:03 ANS209
State of Arkansas As Engrossed: S3/11/25 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: Representatives Eaves, Achor, F. Allen, Barnett, Beaty Jr., Brooks, M. Brown, Clowney, Cozart, 7
Duffield, Eaton, Eubanks, Evans, K. Ferguson, Gramlich, Hall, Jean, L. Johnson, Ladyman, Lynch, 8
Maddox, B. McKenzie, Pilkington, J. Richardson, R. Scott Richardson, Rye, Unger, Warren, Wing, 9
Wooten 10
11
For An Act To Be Entitled 12
AN ACT TO AMEND THE LAW CONCERNING PUBLIC UTILITIES; 13
TO CREATE THE GENERATING ARKANSAS JOBS ACT OF 2025; 14
TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES. 15
16
17
Subtitle 18
TO AMEND THE LAW CONCERNING PUBLIC 19
UTILITIES; TO CREATE THE GENERATING 20
ARKANSAS JOBS ACT OF 2025; AND TO 21
DECLARE AN EMERGENCY. 22
23
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
25
SECTION 1. Arkansas Code § 23 -3-201(a), concerning requirements for 26
new construction or operation of equipment or facilities, is amended to read 27
as follows: 28
(a) New construction or operation of equipment or facilities that are 29
located within this state for supplying a public service or the extension of 30
a public service within this state shall not be undertaken without first 31
obtaining from the Arkansas Public Service Commission a certificate that 32
public convenience and necessity require or will require the construction or 33
operation within this state. 34
35
SECTION 2. Arkansas Code § 23 -3-201(b), concerning when a certificate 36 As Engrossed: S3/11/25 SB307
2 03-11-2025 17:15:03 ANS209
of public convenience is not required, is amended to add additional 1
subdivisions to read as follows: 2
(3)(A) A public utility shall provide notice to the commission 3
of the public utility's intent to recover any strategic investments that are 4
subject to this subchapter through a rider under the Generating Arkansas Jobs 5
Act of 2025, § 23-4-1301 et seq. as part of the public utility's application 6
under this subchapter. 7
(B) To the extent a member cooperative of a generation and 8
transmission cooperative is exempt from the requirement to obtain a 9
certificate of public convenience and necessity under subsection (b) of this 10
section, the exemption shall extend to the generation and transmission 11
cooperative. 12
(C) An exemption claimed by a public utility under this 13
section or under § 23 -18-504(a)(5) does not bar: 14
(i) The public utility from voluntarily seeking the 15
issuance of a certificate of public convenience and necessity under this 16
section; or 17
(ii) The commission from: 18
(a) Granting the public utility the 19
certificate of public convenience and necessity sought under subdivision 20
(d)(1) of this section; and 21
(b) Allowing the public utility to seek 22
recovery of the reasonable cost of the equipment or facilities through rates. 23
24
SECTION 3. Arkansas Code § 23 -3-201, concerning requirements for a 25
certificate of public convenience and necessity, is amended to add an 26
additional subsection to read as follows: 27
(e) As used in this section: 28
(1) "Generation and transmission cooperative" means the same as 29
defined in § 23-4-1101; 30
(2) "Major utility facility" means the same as defined in § 23 -31
18-503; and 32
(3) "Strategic investments" means the same as defined in § 23-4-33
1303. 34
35
SECTION 4. Arkansas Code Title 23, Chapter 3, Subchapter 2, is amended 36 As Engrossed: S3/11/25 SB307
3 03-11-2025 17:15:03 ANS209
to add an additional section to read as follows: 1
23-3-207. Issuance of certificate of public convenience and necessity. 2
(a) If the Arkansas Public Service Commission determines that granting 3
a certificate of public convenience and necessity is consistent with the 4
public interest, the commission shall enter an order granting a certificate 5
of public convenience and necessity within six (6) months after the public 6
utility submits an application for a certificate of public convenience and 7
necessity. 8
(b)(1) If the commission determines that granting a certificate of 9
public convenience and necessity is not in the public interest, the 10
commission shall enter an order denying the certificate of public convenience 11
and necessity. 12
(2) In the order entered by the commission under subdivision 13
(b)(1) of this section, the commission shall discuss: 14
(A) The basis for the commission's findings; and 15
(B) Any evidence or other information submitted by the 16
public utility as part of its notice or application that the commission deems 17
to be insufficient. 18
(3)(A) If a public utility submits additional evidence or other 19
information to the commission demonstrating that the strategic investments, 20
as defined in § 23-4-1303, that are subject to this subchapter are 21
reasonable, necessary, and in the public interest, then the commission shall 22
enter an order granting the certificate of public convenience and necessity 23
within thirty (30) days after the date of the public utility’s filing. 24
(B) If the commission finds that the strategic investments 25
that are subject to this subchapter are not reasonable, necessary, or in the 26
public interest, the commission shall enter an order denying the certificate 27
of public convenience and necessity. 28
(C) In the order issued under subdivision (b)(3)(B) of 29
this section, the commission shall discuss: 30
(i) The basis for the commission's findings; and 31
(ii) Any evidence or other information submitted by 32
the public utility as part of its notice or application that the commission 33
deems to be insufficient. 34
(D) The process outlined in subdivisions (b)(3)(B) and (C) 35
of this section may continue until the commission finds that: 36 As Engrossed: S3/11/25 SB307
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(i) The public utility's application complies with 1
this subchapter; 2
(ii) The public utility withdraws its application; 3
or 4
(iii) The public utility appeals the commission's 5
decision under § 23-2-423. 6
7
SECTION 5. Arkansas Code § 23 -4-901, concerning definitions used under 8
a rate case by the Arkansas Public Service Commission, is amended to add 9
additional subdivisions to read as follows: 10
(5) "Notice" means a written form document, not an application, 11
that contains only as much information as is needed to provide the necessary 12
information to the commission and member -consumers as is specifically 13
required under this subchapter; and 14
(6) "Rate case procedures" means the administrative procedures 15
and requirements normally required by a co -op when adjusting rates and 16
charges under §§ 23-4-402, 23-4-405, 23-4-407 — 23-4-418, 23-4-422, and 23-4-17
620 — 23-4-634 or other applicable statutes and rules of the commission. 18
19
SECTION 6. Arkansas Code § 23 -4-902 is amended to read as follows: 20
23-4-902. Exemption from rate case procedures, etc. 21
A co-op, as defined in § 23 -4-901, shall not be subject to rate case 22
procedures and hearings and other requirements of §§ 23 -4-402 — 23-4-405, 23-23
4-407 — 23-4-418, and 23-4-620 — 23-4-634 and Arkansas Public Service 24
Commission rules implementary thereof, hereafter referred to as “rate case 25
procedures”, by the commission Arkansas Public Service Commission unless: 26
(1) By action of its board of directors, the co -op elects to be 27
subject to rate case procedures by the commission; 28
(2) A proposed change in the co -op's rates and charges exceeds 29
ten percent (10%) of total gross revenues; 30
(3) Ten percent (10%) of the co -op's member-consumers petition 31
the commission to apply rate case procedures , and the commission notifies the 32
co-op that the commission will initiate an investigation and may apply rate 33
case procedures if the commission determines that there is substantial 34
evidence indicating that rates and charges are unreasonable; or 35
(4) As otherwise provided in this subchapter. 36 As Engrossed: S3/11/25 SB307
5 03-11-2025 17:15:03 ANS209
1
SECTION 7. Arkansas Code § 23 -4-903 is amended to read as follows: 2
23-4-903. Notification of proposed rate change. 3
(a) Each co-op not subject to rate case procedures, at least ninety 4
(90) days before the effective date of any proposed rate change, shall notify 5
the Arkansas Public Service Commission and each of its member -consumers of 6
the proposed rate change. Notice to the commission shall include a verified 7
statement showing the then total number of member -consumers of the co-op. 8
Notice by the co-op to its member-consumers shall: 9
(1) Be in a notice form prescribed by the commission; 10
(2) Be by regular mail and may be included in regular member -11
consumer billings or in regularly published co -op newsletters provided to its 12
member-consumers; and 13
(3) Include a schedule of the proposed rate change, the 14
effective date of the proposed rate change, and the procedure necessary for 15
the member-consumers to petition the commission to apply rate case 16
procedures; and 17
(4) Not require a new cost -of-service study, application for 18
approval, or additional rate case procedure requirement . 19
(b) The commission shall not require or establish additional notice or 20
filing requirements for a co -op that is adjusting the co -op's rates and 21
charges under this subchapter and shall certify whether the co -op met the 22
notice requirements set forth in this subchapter. 23
24
SECTION 8. Arkansas Code § 23 -4-905 is amended to read as follows: 25
23-4-905. Petition for relief from rate change — Effect. 26
(a)(1) If, by the effective date of the proposed change in rates and 27
charges, the Arkansas Public Service Commission has received petitions from 28
fewer than fifteen percent (15%) ten percent (10%) of the member-consumers 29
requesting that the commission apply rate case procedures, then the 30
commission shall immediately certify that fact to the co -op. 31
(2) The proposed rates and charges shall become effective as 32
published in the notice to the member -consumers. 33
(b) Rates and charges so established shall be in effect for not less 34
than one (1) year, subject to the procedure provided for in § 23 -4-906. If, 35
on or before the effective date of the proposed change in rates and charges, 36 As Engrossed: S3/11/25 SB307
6 03-11-2025 17:15:03 ANS209
the commission has received petitions from ten percent (10%) of the member -1
consumers, then the commission shall notify the co -op that it will initiate 2
an investigation and may apply rate case procedures under § 23-4-908. 3
4
SECTION 9. Arkansas Code § 23 -4-907 is amended to read as follows: 5
23-4-907. Commission's jurisdiction not affected. 6
Sections 23-4-902, 23-4-903, 23-4-905, and 23-4-906, 23-4-908, and 23-7
4-909 apply only to rates and charges and shall have no effect on the 8
Arkansas Public Service Commission's jurisdiction over a co -op as otherwise 9
provided by law. 10
11
SECTION 10. Arkansas Code § 23 -4-908 is amended to read as follows: 12
23-4-908. Authority of commission. 13
(a) The Upon receipt of a sufficient number of valid petitions under § 14
23-4-905, the Arkansas Public Service Commission shall have the authority to 15
investigate and determine the reasonableness of the change in rates and 16
charges of each co-op changing its rates and charges pursuant to this 17
subchapter, within one (1) year of the time of the change in rates and 18
charges. 19
(b) If the commission preliminarily determines that there is 20
substantial evidence indicating that the rates and charges are unreasonable, 21
the commission shall have the authority to apply rate case procedures. 22
(c)(1) After a hearing thereon, the commission shall have the 23
authority to modify all or any portion of the changes found to be 24
unreasonable. 25
(2) If, following the hearing, the commission orders a change in 26
the co-op's rates and charges, the co -op shall not effect a subsequent change 27
in rates and charges pursuant to this subchapter for a period of twelve (12) 28
months from the date of the commission order. 29
30
SECTION 11. Arkansas Code § 23 -4-909 is amended to read as follows: 31
23-4-909. Apportionment of rates and charges. 32
(a) Upon receipt of a sufficient number of valid petitions under § 23 -33
4-905, the Arkansas Public Service Commission may inquire into the 34
reasonableness of the apportionment of rates and charges by a co -op. 35
(b) When determining how rates and charges established under § 23 -4-36 As Engrossed: S3/11/25 SB307
7 03-11-2025 17:15:03 ANS209
903 are to be allocated among different rate classes, a co -op shall endeavor 1
to apportion the rates and charges in a manner which reflects consistent 2
with, as closely as practicable, the costs of providing service to each class 3
last approved cost-of-service study. 4
5
SECTION 12. Arkansas Code § 23 -4-1102 is amended to read as follows: 6
23-4-1102. Exemption from general rate case procedure. 7
A generation and transmission cooperative may modify its rates and 8
charges if: 9
(1) At least three-fourths (¾) of its board votes to change its 10
rates and charges, including a proposed change to cost allocation and rate 11
design of the generation and transmission cooperative ; 12
(2) A proposed increase in the generation and transmission 13
cooperative's rates and charges does not exceed five percent (5%) in any 14
twelve-month period of the total gross revenues of the generation and 15
transmission cooperative; and 16
(3) Any additional requirements of this subchapter are 17
satisfied. 18
19
SECTION 13. Arkansas Code § 23 -4-1104(a)(2), concerning alternative 20
procedures for modifying rates and charges of a generation and transmission 21
cooperative, is amended to read as follows: 22
(2) In addition to an attachment containing the proposed tariffs 23
to effect the modification of the rates and charges, the application shall 24
provide the following: 25
(A) Proof of the board vote required by § 23 -4-1102; 26
(B) The proof of notice required by § 23 -4-1103; 27
(C) A current calculation of the generation and 28
transmission cooperative's: 29
(i) Times interest earned ratio; 30
(ii) Debt service coverage ratio; and 31
(iii) Margins as a percent of revenue for the last 32
available calendar year; 33
(D) An analysis of the impact of the proposed change in 34
rates and charges on each member cooperative's cost of wholesale power that 35
is acquired from the generation and transmission cooperative; 36 As Engrossed: S3/11/25 SB307
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(E) Documentary evidence that the impact of the proposed 1
change in rates and charges does not exceed five percent (5%) of the 2
generation and transmission cooperative's total gross revenues for the 3
previous calendar year twelve-month period before the generation and 4
transmission cooperative's notice under § 23 -4-1103(a)(1); 5
(F) Documentation that shows the derivation of the 6
generation and transmission cooperative's proposed changes in its rates and 7
charges; and 8
(G)(i) Any other supporting documentation or evidence 9
required by the commission to validate the requirements of this subchapter . 10
(ii)(a) However, the commission shall not require 11
the generation and transmission cooperative to prepare a cost -of-service 12
study. 13
(b) Instead In lieu of voluntarily filing a 14
new cost-of-service study for approval, the generation and transmission 15
cooperative shall rely upon the most recent commission -approved cost 16
allocation. 17
18
SECTION 14. Arkansas Code § 23 -4-1105(a), concerning the application 19
for modification of retail rates, is amended to read as follows: 20
(a) A member cooperative may propose a modification of its retail 21
rates and charges to incorporate the proposed change in the generation and 22
transmission cooperative's wholesale rates and charges filed under § 23 -4-23
1104 if: 24
(1) The member cooperative files its application for a 25
modification of its retail rates and charges with the Arkansas Public Service 26
Commission on the same within ten (10) days from the date as the generation 27
and transmission cooperative files its application for a modification of its 28
change in wholesale rates and charges under § 23 -4-1104; and 29
(2) The member cooperative apportions its proposed change in 30
rates and charges in a manner that reflects, as closely as practicable, its 31
cost of providing service to each class. 32
33
SECTION 15. Arkansas Code § 23 -4-1106 is repealed. 34
23-4-1106. Limitation on increase in rates. 35
The generation and transmission cooperative shall not increase its 36 As Engrossed: S3/11/25 SB307
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rates and charges under this subchapter by an aggregate total of more than 1
eight percent (8%) during any twenty -four-month period. 2
3
SECTION 16. Arkansas Code Title 23, Chapter 4, is amended to add an 4
additional subchapter to read as follows: 5
6
Subchapter 13 — Generating Arkansas Jobs Act of 2025 7
8
23-4-1301. Title. 9
This subchapter shall be known and may be cited as the "Generating 10
Arkansas Jobs Act of 2025". 11
12
23-4-1302. Legislative findings. 13
The General Assembly finds that: 14
(1) Significant strategic investments in electric utility 15
infrastructure and natural gas utility infrastructure are necessary to enable 16
this state to: 17
(A) Attract and serve economic development projects across 18
a variety of industries; 19
(B) Continue reliable support for existing customers by 20
investing in additions of new electric utility infrastructure and natural gas 21
utility infrastructure to support growth; and 22
(C) Replace retiring electric generation facilities and 23
other electric utility infrastructure and natural gas utility infrastructure; 24
(2) Strategic investments to ensure that electric utilities have 25
adequate dispatchable generation resources to support reliable service for 26
their customers continue to be a significant element in enabling this state 27
to attract and serve these economic development opportunities; 28
(3) Strategic investments in electric utility infrastructure and 29
natural gas utility infrastructure are needed to support the development of 30
sites designated as available for economic development projects, as these 31
sites are critical to this state’s economic development efforts; 32
(4) While Arkansas's electric utilities have pursued beneficial 33
resource acquisition opportunities for their customers, most will need to 34
construct new electric generating facilities in the near future; 35
(5) Further strategic investments in electric utility 36 As Engrossed: S3/11/25 SB307
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infrastructure are needed to support the license extension for existing 1
nuclear generation resources and ensure that electric utilities maintain 2
adequate dispatchable generation resources to support reliable service for 3
their customers; 4
(6) Supporting the continued evaluation of modular reactors and 5
advanced nuclear technologies to identify opportunities to pursue strategic 6
investments in those advanced nuclear technologies if it is in the public 7
interest in considering whether or not those advanced nuclear technologies 8
become technically feasible, commercially viable, and financially viable or 9
otherwise beneficial to customers in Arkansas; 10
(7) Economic development projects and the continued provision of 11
reliable electric utility service and reliable natural gas utility service 12
are essential to the future of Arkansas; 13
(8) Failure to act now will result in the state's missing 14
transformational opportunities for economic development, including new 15
business opportunities as well as the expansion of existing businesses that 16
may not be available again for many years to come; 17
(9) These prospective and existing businesses are prepared to 18
invest in electric utility infrastructure and natural gas utility 19
infrastructure in this state and will provide employment for Arkansas 20
residents that will benefit the public interest; 21
(10) These prospective strategic investments and the resulting 22
employment and workforce development opportunities for this state will 23
produce investment, economic growth and activity, and new state and local tax 24
revenue that will strengthen communities throughout this state and will 25
enhance the state’s overall economic vitality and well -being; 26
(11) Existing regulatory frameworks for electric utilities and 27
natural gas utilities are inadequate and were not designed to enable the 28
electric utilities and the natural gas utilities to respond timely and make 29
the required level of strategic investments in electric utility or natural 30
gas utility infrastructure and the associated expenses, in addition to 31
maintaining the financial viability necessary to support strategic 32
investments requiring new infrastructure to serve the residents of Arkansas; 33
(12) Regulatory reform is required to keep pace with the 34
evolving industry and help ensure that electric utilities and natural gas 35
utilities are financially sound and able to make the strategic investments to 36 As Engrossed: S3/11/25 SB307
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continue providing customers safe, reliable, affordable, and sustainable 1
electric utility service and natural gas utility service; 2
(13) To support economic development in Arkansas, nothing herein 3
is intended to develop rates that would unreasonably shift costs from a 4
customer or customer class to other customers in a manner that would result 5
in rates that are not just and reasonable, not consistent with applicable 6
law, or not in the public interest; 7
(14) It is the policy of this state to maintain adequate 8
capacity of available, reliable, dispatchable, affordable, and resilient 9
electric generation to provide for the existing and reasonably projected 10
future energy consumption needs of all consumers of electricity in Arkansas; 11
(15) Arkansas can support a multitude of potential electric 12
generating resources and fuel supply resources so as to be the national 13
leader in the production of reliable and affordable energy in all forms that 14
make sense and are technically feasible, commercially viable, and financially 15
viable or otherwise beneficial to customers in Arkansas and the Arkansas 16
Public Service Commission shall ensure that generation resource s will 17
maintain or improve the affordability, adequacy, and reliability of the 18
electric grid in Arkansas; 19
(16) Strategic investments will support the expansion of 20
Arkansas’s natural gas production capacity that will lead to economic growth 21
and employment opportunities in that business sector and will support the 22
continued development and use of Arkansas’s natural resources; and 23
(17) Strategic investments will enhance the capacity, 24
reliability, and resiliency of Arkansas’s electric and natural gas utility 25
infrastructure, which will support the reliability and resiliency of 26
Arkansas’s overall utility infrastructure and reliable electric and natural 27
gas utility service during extreme temperatures and other weather conditions 28
and during other periods of high demand and usage. 29
30
23-4-1303. Definitions. 31
As used in this subchapter: 32
(1)(A) "Construction work in progress" means: 33
(i) Materials costs; 34
(ii) Labor costs; 35
(iii) Labor costs adders; 36 As Engrossed: S3/11/25 SB307
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(iv) Costs associated with third -party vendors and 1
consultants; 2
(v) Costs associated with procurement of real 3
property rights; 4
(vi) Costs associated with securing all necessary 5
approvals; 6
(vii) Taxes; 7
(viii) Tax gross-up charges; 8
(ix) Capital suspense charges; and 9
(x) Overheads for any strategic investments that are 10
not yet complete or in service. 11
(B) "Construction work in progress" includes costs that 12
are: 13
(i) Recorded under the requirements of the uniform 14
system of accounts adopted by the Arkansas Public Service Commission by rule 15
and any applicable accounting guidance issued by the Federal Energy 16
Regulatory Commission that are adopted by the Arkansas Public Service 17
Commission by rule; and 18
(ii) In conformance with generally accepted 19
accounting principles; 20
(2) "Electric distribution cooperative" means a rural electric 21
cooperative that sells electricity at retail and is a member of an electric 22
generation and transmission cooperative; 23
(3) "Electric generation and transmission cooperative" means a 24
rural electric cooperative formed under the Electric Cooperative Corporation 25
Act, § 23-18-301 et seq., that: 26
(A) Does not have a certificated service territory; and 27
(B) Exclusively sells electricity at wholesale; 28
(4) "Investor-owned electric utility" means a public utility 29
that is engaged in generating, transmitting, delivering, or furnishing 30
electricity to or for the public for compensation and that is owned by 31
investors and is not a cooperative; 32
(5) "Investor-owned natural gas utility" means a public utility 33
that is engaged in the production, transport, delivery, or furnishing of 34
natural gas to or for the public for compensation and that is owned by 35
investors and is not a cooperative; 36 As Engrossed: S3/11/25 SB307
13 03-11-2025 17:15:03 ANS209
(6) "Major utility facility" means the same as defined in § 23 -1
18-503; 2
(7) "Public utility" means the same as defined in § 23 -1-101; 3
(8) "Rider" means a rate schedule approved by the Arkansas 4
Public Service Commission to recover one (1) or more strategic investments 5
and the recovery costs that are not included in other rates or rate schedules 6
approved by the Arkansas Public Service Commission; 7
(9) "Rider test period" means a historical test period under § 8
23-4-406 which shall include adjustments identified by the electric utility 9
or the natural gas utility to a historical test period to reflect the effects 10
on an annualized basis of a change in circumstances which may occur within 11
twelve (12) months after the end of the historical test year where the 12
changes are reasonably known and measurable; 13
(10)(A) "Strategic investments" means investments, either 14
construction or purchase, and associated operating expenses made by a 15
electric public utility or natural gas public utility, and approved by the 16
Arkansas Public Service Commission under § 23 -3-201 et seq., the Utility 17
Facility Environmental and Economic Protection Act, § 23 -18-501 et seq., or a 18
notice under § 23-18-104 or as otherwise stated in subdivision (10)(B) of 19
this section, to: 20
(i) Support growth and economic development in this 21
state, including supporting the development of sites designated as available 22
for economic development; 23
(ii) Maintain and improve the provision of reliable 24
electric utility service and natural gas utility service to new and existing 25
customers in this state; 26
(iii) Support the license extension for existing 27
nuclear generation resources; and 28
(iv) Ensure that electric utilities maintain 29
adequate dispatchable generation resources to support reliable service for 30
their customers that is consistent with the resource adequacy requirements 31
established by the applicable load balancing authority. 32
(B) "Strategic investments" includes without limitation 33
investments and associated operating expenses associated with: 34
(i) A new electric generating facility, an 35
associated transportation and storage facility for fuel, and other facilities 36 As Engrossed: S3/11/25 SB307
14 03-11-2025 17:15:03 ANS209
designed for or capable of operation at a capacity of one hundred megawatts 1
(100 MW) or more for a single facility; 2
(ii) An energy storage facility designed for or 3
capable of operating at a capacity of fifty megawatts (50 MW) or more for a 4
single facility or a combination of energy storage facilities and an electric 5
generating facility designed for or capable of operation at a combined 6
capacity of one hundred megawatts (100 MW) or more for a single facility to 7
provide service to new and existing customers located in Arkansas; 8
(iii) Upgrades, expansions, or fuel conversions of 9
existing electric generating facilities and associated transportation and 10
storage facilities for fuel and other facilities, energy storage facilities, 11
or any combination thereof to sustain or increase capacity and, therefore, 12
improve reliability, to provide service to new and existing customers in 13
Arkansas; 14
(iv) New electric transmission facilities, including 15
substations with a design voltage of more than one hundred kilovolts (100 kV) 16
or more to provide service to new and existing customers located in Arkansas; 17
(v) Upgrades or expansions of existing electric 18
transmission facilities, including substations with a design voltage of more 19
than one hundred kilovolts (100 kV) or more to increase capacity, therefore, 20
improve reliability to provide service to new and existing customers located 21
in Arkansas; 22
(vi) New natural gas transmission lines or high 23
pressure distribution lines with a maximum allowable operating pressure of 24
one hundred twenty-five pounds per square inch gauge (125 PSIG) or greater 25
and natural gas storage facilities; 26
(vii) Upgrades or expansions of existing natural gas 27
transmission lines, high pressure distribution lines with a maximum allowable 28
operating pressure of one hundred twenty -five pounds per square inch gauge 29
(125 PSIG) or greater and natural gas storage facilities; and 30
(viii) Feasibility studies of strategic investments 31
and advanced energy technologies, as defined in § 23 -4-1308, including site 32
studies and due diligence to determine construction estimates. 33
(C)(i) A renewable resource strategic investment shall be 34
eligible for recovery through the rider under this section, if the Arkansas 35
Public Service Commission finds in a proceeding under § 23 -3-201 et seq., § 36 As Engrossed: S3/11/25 SB307
15 03-11-2025 17:15:03 ANS209
23-18-104, the Utility Facility Environmental and Economic Protection Act, § 1
23-18-501 et seq., or any other proceeding for approval of a renewable 2
resource strategic investment based on substantial evidence, that a renewable 3
resource strategic investment results in benefits to customers and the 4
electric utility would continue to have adequate dispatchable resources to 5
provide reliable service to its customers consistent with the resource 6
adequacy requirements of the load balancing authority with the addition of 7
the renewable strategic investment. 8
(ii) As used in subdivision (10)(C)(i) of this 9
section, "benefits" shall include without limitation: 10
(a) The cost of the renewable strategic 11
investment is reasonable and prudently incurred; 12
(b) The renewable resource strategic 13
investment is necessary to supplement or replace the electric utility's 14
existing generation resources; 15
(c) The renewable resource strategic 16
investment provides energy and capacity benefits; 17
(d) The renewable resource provides generation 18
resource mix diversification and fuel source mix benefits and risk mitigation 19
benefits; 20
(e) The renewable resource strategic 21
investment supports efforts to attract or retain economic development 22
opportunities for this state; or 23
(f) A customer or customers contract to pay 24
all or a portion of the cost of the strategic investment as a resource 25
through a special rate contract, a renewable rate schedule, a contribution in 26
aid of construction, or other form of payment. 27
(D) Wind resources located in Arkansas are not eligible 28
for recovery through a rider under this subchapter ; and 29
(11) "Times interest earned ratio" means earnings before 30
interest and taxes divided by the total interest payable on bonds and other 31
debt. 32
33
23-4-1304. Authorization to recover strategic investments through 34
rider — Investor-owned electric utility and investor -owned natural gas 35
utility. 36 As Engrossed: S3/11/25 SB307
16 03-11-2025 17:15:03 ANS209
(a) An investor-owned electric utility or an investor -owned natural 1
gas utility may use a rider to recover strategic investments that are not 2
otherwise recoverable through rates that were previously approved by the 3
Arkansas Public Service Commission or charged by the investor -owned electric 4
utility or the investor -owned natural gas utility after: 5
(1) A commission order approving an application under § 23 -3-201 6
et seq. or the Utility Facility Environmental and Economic Protection Act, § 7
23-18-501 et seq., or a notice under § 23 -18-104; or 8
(2) A commission order approving any other application related 9
to the siting or prudence of the decision to invest in the new strategic 10
investments. 11
(b)(1) An investor-owned electric utility or an investor -owned natural 12
gas utility may elect to file with the commission a rider to recover 13
strategic investments that are not included in rates. 14
(2) The investor-owned electric utility or the investor -owned 15
natural gas utility shall provide notice to the Attorney General of the 16
filing of the rider by the investor -owned electric utility or the investor -17
owned natural gas utility on the date the investor -owned electric utility or 18
the investor-owned natural gas utility files the rider with the commission. 19
(c)(1) An investor-owned electric utility or an investor -owned natural 20
gas utility may select the date of the first annual filing update, with all 21
subsequent updates to be filed on or by the same day annually as the first 22
filing update. 23
(2) An investor-owned electric utility or an investor -owned 24
natural gas utility shall provide notice to the Attorney General of the 25
filing of the rider on the date the investor -owned electric utility or the 26
investor-owned natural gas utility files each annual update to the rider with 27
the commission. 28
(d) For a rider under this subchapter, an investor -owned electric 29
utility or an investor -owned natural gas utility shall use a rider test 30
period. 31
(e)(1) Upon receipt of an investor -owned electric utility's or an 32
investor-owned natural gas utility’s filing to implement the rider rate 33
schedule and each annual update under this subchapter, the commission shall 34
issue an order approving the rider rate schedule and each annual update to 35
recover strategic investments under this subchapter if the commission 36 As Engrossed: S3/11/25 SB307
17 03-11-2025 17:15:03 ANS209
determines that the investor -owned electric utility's or the investor -owned 1
natural gas utility’s application complies with the provisions of this 2
section. 3
(2)(A) Unless the commission determines that approving the 4
investor-owned electric utility's or the investor -owned natural gas utility’s 5
application for the rider and each annual update does not comply with this 6
subchapter, the commission shall enter an order within ninety (90) calendar 7
days following the date of the investor -owned electric utility's or the 8
investor-owned natural gas utility’s filing. 9
(B)(i) If the commission determines that approving an 10
application for approval of a rider rate schedule or annual update under this 11
subchapter does not comply with this section, the commission shall enter an 12
order denying the application. 13
(ii) In the order entered by the commission under 14
subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 15
(a) The basis for the commission's findings; 16
and 17
(b) Any evidence or other information 18
submitted by the investor -owned electric utility or the investor -owned 19
natural gas utility as part of its application that the commission deems to 20
be insufficient. 21
(C) Each annual update shall include, for the initial 22
rider test year, the construction work in progress costs that will ultimately 23
be capitalized on which the utility will earn a return, amounts that would 24
otherwise be recorded as allowance for funds used during construction, and 25
any expenses associated with the construction work in progress that will not 26
be capitalized. 27
(D) The commission shall verify the amounts included in 28
each annual update reflect the amounts authorized for recovery under the 29
Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 30
(E) The commission shall complete its review of each 31
annual update filing and issue its order within sixty (60) days following the 32
date of the annual update filing. 33
(F)(i) If the investor -owned electric utility or the 34
investor-owned natural gas utility submits an amended filing remedying the 35
areas of noncompliance identified by the commission in its order, the 36 As Engrossed: S3/11/25 SB307
18 03-11-2025 17:15:03 ANS209
commission shall enter an order approving the application within ten (10) 1
calendar days following the date of the amended filing unless the commission 2
finds that the filing does not comply with the provisions of this subchapter. 3
(ii) If the commission finds that the amended filing 4
does not remedy the areas of noncompliance, the commission shall enter an 5
order denying the application. 6
(iii) In the order issued under subdivision 7
(e)(2)(F)(ii) of this section, the commission shall discuss: 8
(a) The basis for the commission's findings; 9
and 10
(b) Any evidence or other information 11
submitted by the investor -owned electric utility or the investor -owned 12
natural gas utility as part of its notice or application that the commission 13
deems to be insufficient. 14
(G) The process outlined in subdivision (e)(2)(B) and (F) 15
of this section may continue until the commission finds that: 16
(i) The investor-owned electric utility's or the 17
investor-owned natural gas utility's application complies with this 18
subchapter; or 19
(ii) The investor-owned electric utility or the 20
investor-owned natural gas utility withdraws its application or appeals the 21
commission's decision under § 23-2-423. 22
(H) If the commission fails to issue its order within the 23
timeframes stated in this section, the investor -owned electric utility's 24
filing or the investor -owned natural gas utility’s filing shall become 25
effective by operation of law subject to completion of the commission's 26
review under this subchapter. 27
(f)(1) At the election of the investor -owned electric utility or the 28
investor-owned natural gas utility, strategic investments shall be recovered 29
through the rider, separate from the investor -owned electric utility's or the 30
investor-owned natural gas utility’s formula rate plan implemented under the 31
Formula Rate Review Act, § 23 -4-1201 et seq., any other rider, or otherwise 32
as part of the investor -owned electric utility's or the investor -owned 33
natural gas utility's rates approved by the commission. 34
(2) If elected by an investor -owned electric utility or an 35
investor-owned natural gas utility, the rider shall remain in effect under 36 As Engrossed: S3/11/25 SB307
19 03-11-2025 17:15:03 ANS209
this subchapter until the investor -owned electric utility or the investor -1
owned natural gas utility decides to withdraw the rider with respect to 2
future cost recovery for strategic investments to be made after the date of 3
the withdrawal. 4
(g) For the purposes of calculating rates to recover the costs of 5
strategic investments, including rates implemented through an individual 6
customer contract, the commission shall ensure that the rates charged to 7
customers recover the costs of strategic investments in a manner that is 8
consistent with applicable law and in the public interest. 9
(h)(1) An amount collected through the rider under this subchapter 10
shall be collected subject to refunds pending the completion of the 11
commission's review under this subchapter. 12
(2) At any time during the process, if the commission finds that 13
any costs were not prudently incurred, the commission shall order that the 14
costs that were not prudently incurred be refunded to customers through bill 15
credits. 16
(i) The rider elected by an investor -owned electric utility or an 17
investor-owned natural gas utility under this subchapter to recover strategic 18
investments is a revenue requirement rider and shall provide return on 19
construction work in progress plus operating expenses during construction and 20
return on rate base plus operating expenses once complete and in service. 21
(j)(1) An investor-owned electric utility or an investor -owned natural 22
gas utility shall not accrue an allowance for funds used during construction 23
for strategic investments with costs recovered through the rider. 24
(2) Instead, the commission shall authorize an investor -owned 25
electric utility or an investor -owned natural gas utility to earn a return 26
through the rider under this subchapter on any construction work in progress. 27
(k) The commission shall authorize an investor -owned electric utility 28
or an investor-owned natural gas utility to recover through the rider filed 29
under this subchapter any expenses associated with the construction of 30
strategic investments that will not be capitalized. 31
(l) In calculating construction work in progress, including actual 32
costs and any projections, the investor -owned electric utility or the 33
investor-owned natural gas utility shall base all amounts on year -end 34
information not subject to averaging beginning -of-year or end-of-year 35
balances. 36 As Engrossed: S3/11/25 SB307
20 03-11-2025 17:15:03 ANS209
(m)(1)(A) During the construction of strategic investments included in 1
the rider, an investor -owned electric utility or an investor -owned natural 2
gas utility shall include in the capital structure only short -term debt, 3
long-term debt, and equity. 4
(B) The investor-owned electric utility or the investor -5
owned natural gas utility shall base the balances of those items under 6
subdivision (m)(1)(A) of this section on the investor -owned electric 7
utility’s or the investor -owned natural gas utility’s actual capital 8
structure with a minimum equity percentage of thirty percent (30%) and a 9
maximum equity percentage of fifty percent (50%). 10
(C) During the construction of strategic investments, the 11
commission shall not require an investor -owned electric utility or an 12
investor-owned natural gas utility that is electing to utilize a rider under 13
this subchapter to include in the capital structure of the rider other items, 14
including current, accrued, or other liabilities or accumulated deferred 15
income taxes. 16
(D) For the purposes of the rider, the cost of debt used 17
in calculating the cost of capital shall be the cost of short -term debt and 18
the cost of long-term debt approved in the investor -owned electric utility’s 19
or the investor-owned natural gas utility’s most recent general rate case 20
proceeding or formula rate plan annual filing. 21
(2) For any strategic investment included in the rider under 22
this section that is complete and in service, the investor -owned electric 23
utility or the investor -owned natural gas utility shall use the capital 24
structure and overall rate of return that was approved in the investor -owned 25
electric utility’s or the investor -owned natural gas utility's most recent 26
general rate case proceeding or annual formula rate plan filing. 27
(n) For the purpose of the rider, the return on equity used in 28
calculating the cost of capital shall be set at the return on equity approved 29
in the investor-owned electric utility's or the investor -owned natural gas 30
utility’s most recent general rate case proceeding. 31
(o)(1) On the strategic investments' being complete and in service, 32
the commission shall authorize the investor -owned electric utility or the 33
investor-owned natural gas utility to earn a fair and reasonable return 34
through the rider on any capitalized costs for the strategic investments. 35
(2) Once the strategic investments go into service, the 36 As Engrossed: S3/11/25 SB307
21 03-11-2025 17:15:03 ANS209
commission shall authorize the investor -owned electric utility or the 1
investor-owned natural gas utility to recover through the rider any on -going 2
expenses associated with the strategic investments. 3
(3) In the investor -owned electric utility's or the investor -4
owned natural gas utility’s next general rate case proceeding, the commission 5
shall allow the investor -owned electric utility or the investor -owned natural 6
gas utility to include any capitalized amounts and associated expenses for 7
completed strategic investments in its base rates. 8
(4)(A) In the investor -owned electric utility's or the investor -9
owned natural gas utility's next general rate case proceeding, the investor-10
owned electric utility or the investor -owned natural gas utility shall move 11
any amounts for any completed strategic investments from the rider into base 12
rates. 13
(B) The investor-owned electric utility or the investor -14
owned natural gas utility shall continue to recover through the rider 15
implemented under this subchapter the costs and expenses associated with any 16
strategic investments that are not complete and in service. 17
(p) The revenues from the rider shall be included in calculating the 18
maximum amount of revenue increase or decrease under § 23 -4-1207(d) for any 19
formula rate plan implemented under the Formula Rate Review Act, § 23 -4-1201 20
et seq., but shall otherwise be excluded from the revenues included in a 21
formula rate plan under the Formula Rate Review Act, § 23 -4-1201 et seq., for 22
an investor-owned electric utility or an investor -owned natural gas utility. 23
(q)(1) For any excess accumulated deferred income tax associated with 24
strategic investments, the commission shall: 25
(A) Authorize the investor -owned electric utility or 26
investor-owned natural gas utility to apply the excess deferred income taxes 27
to offset the investor -owned electric utility's or investor -owned natural gas 28
utility’s rate base used in calculating its rates; or 29
(B) Apply the excess deferred income taxes as a credit to 30
customer bills. 31
(2) The commission shall determine which form and the timing of 32
applying the accumulated deferred income taxes under subsection (q) of this 33
section is in the public interest. 34
(r) The commission shall authorize the investor -owned electric utility 35
or the investor-owned natural gas utility to monetize or apply any tax 36 As Engrossed: S3/11/25 SB307
22 03-11-2025 17:15:03 ANS209
credits or other tax incentives, including without limitation investment tax 1
credits and production tax credits, where possible to reduce the cost of 2
constructing or acquiring any strategic investments to benefit customers of 3
an investor-owned electric utility or an investor -owned natural gas utility. 4
(s)(1) The investor -owned electric utility or the investor -owned 5
natural gas utility shall seek federal funds and loan programs to reduce the 6
cost of constructing, acquiring, and financing strategic investments if 7
possible, appropriate, and available to reduce the cost of constructing or 8
acquiring any strategic investments. 9
(2) If an investor-owned electric utility or an investor -owned 10
natural gas utility requests and receives federal funding to support 11
constructing or acquiring strategic investments, the applicable amount of 12
federal funding shall be deducted from the value of the strategic investments 13
that are capitalized and recoverable through rates charged to customers of an 14
investor-owned electric utility or an investor -owned natural gas utility. 15
(t)(1) If an investor -owned electric utility or an investor -owned 16
natural gas utility, with rates regulated under the Formula Rate Review Act, 17
§ 23-4-1201 et seq., has a return on equity above the return on the investor -18
owned electric utility's or the investor -owned natural gas utility’s most 19
recent general rate case proceeding, plus five -tenths percent (0.5%), and 20
would otherwise be required to provide credits to a customer's bill, the 21
investor-owned electric utility or the investor -owned natural gas utility 22
shall not be required to adjust rates and provide credits to customers that 23
may otherwise be required under § 23 -4-1207(b) if the investor -owned electric 24
utility or the investor -owned natural gas utility has strategic investments 25
under construction in an amount equal to or greater than the amount above the 26
return on equity approved in the investor -owned electric utility's or the 27
investor-owned natural gas utility’s most recent general rate case 28
proceeding, plus five -tenths percent (0.5%). 29
(2) For an investor -owned electric utility or an investor -owned 30
natural gas utility, with rates regulated under the Formula Rate Review Act, 31
§ 23-4-1201 et seq., the commission shall not require a reduction of rates to 32
the investor-owned electric utility's or the investor -owned natural gas 33
utility’s authorized rate of return, or reduce the investor -owned electric 34
utility's or the investor -owned natural gas utility’s target rate of return 35
under § 23-4-1207(b) for any formula rate plan mechanism under the Formula 36 As Engrossed: S3/11/25 SB307
23 03-11-2025 17:15:03 ANS209
Rate Review Act, § 23 -4-1201 et seq., if an investor -owned electric utility 1
or an investor-owned natural gas utility has strategic investments under 2
construction in an amount equal to or greater than the level of earnings 3
above the investor-owned electric utility's or the investor -owned natural gas 4
utility’s authorized rate of return or the investor -owned electric utility's 5
or the investor-owned natural gas utility’s target rate of return under § 23 -6
4-1207(b) for any formula rate plan mechanism implemented under the Formula 7
Rate Review Act, § 23 -4-1201 et seq. 8
(3)(A) The investor -owned electric utility or the investor -owned 9
natural gas utility shall first apply any amounts identified in subdivisions 10
(t)(1) and (2) of this section to strategic investments under construction. 11
(B)(i) The commission may authorize the investor -owned 12
electric utility or the investor -owned natural gas utility to record any 13
amounts identified in subdivisions (t)(1) and (2) of this section and 14
designate those amounts to offset the cost of approved strategic investments 15
not yet under construction if the commission determines that doing so is in 16
the public interest. 17
(ii) If the commission authorizes recording any 18
amounts for the projects described in subdivision (t)(3)(B)(i) of this 19
section, the investor -owned electric utility or the investor -owned natural 20
gas utility shall deduct interest at a rate equal to the cost of short -term 21
debt approved in the investor -owned electric utility's or the investor -owned 22
natural gas utility’s last general rate case proceeding from any amounts 23
recorded until those amounts are applied to offset the cost of strategic 24
investments. 25
(C) The investor-owned electric utility or the investor -26
owned natural gas utility shall provide credits to customers equal to any 27
remaining amounts identified in subdivisions (t)(1) and (2) of this section 28
as required under § 23 -4-1207(b), plus interest at a rate equal to the cost 29
of short-term debt approved in the investor -owned electric utility's or the 30
investor-owned natural gas utility's most recent general rate case proceeding 31
or annual formula rate plan filing. 32
(u) Except as otherwise provided in this subchapter, this section does 33
not alter the powers and authority of the commission. 34
(v) A commission review of the expenditures associated with strategic 35
investments included in the rider, including evaluating whether or not any 36 As Engrossed: S3/11/25 SB307
24 03-11-2025 17:15:03 ANS209
costs or expenses are reasonable and prudently incurred, shall be completed 1
within twelve (12) calendar months after the date upon which the investor -2
owned electric utility or the investor -owned natural gas utility provides 3
notice that the strategic investments are complete and in service. 4
(w) An expenditure associated with strategic investments for which an 5
application for approval is pending before the commission as of the effective 6
date of this subchapter shall be eligible for recovery through the rider 7
under this subchapter if: 8
(1) The costs are not otherwise included in rates approved by 9
the commission before the effective date of this subchapter; 10
(2) The investor-owned electric utility or the investor -owned 11
natural gas utility has an application pending that was filed before the 12
effective date of this subchapter for approval: 13
(A) To construct a power generation facility outside of 14
the state under § 23 -18-104; 15
(B) To obtain a certificate of environmental compatibility 16
and public need under the Utility Facility Environmental and Economic 17
Protection Act, § 23 -18-501 et seq.; 18
(C) To obtain a certificate of public convenience and 19
necessity under § 23 -3-201 et seq.; or 20
(D) For any other application related to the siting or 21
prudence of the decision to invest in the new strategic investments; and 22
(3) The commission enters an order after January 1, 2025, 23
approving an application that was filed before the effective date of this 24
subchapter for approval: 25
(A) To construct a power generation facility outside of 26
the state under § 23 -18-104; 27
(B) To obtain a certificate of environmental compatibility 28
and public need under the Utility Facility Environmental and Economic 29
Protection Act, § 23 -18-501 et seq.; 30
(C) To obtain a certificate of public convenience and 31
necessity under § 23 -3-201 et seq.; or 32
(D) For any other application related to the siting or 33
prudence of the decision to invest in the new strategic investments. 34
(x)(1) If a customer pays or multiple customers pay for a portion of 35
any strategic investments through a contribution in aid of construction or 36 As Engrossed: S3/11/25 SB307
25 03-11-2025 17:15:03 ANS209
through other form of payment, the strategic investments shall continue to be 1
considered strategic investments and classified as part of the investor -owned 2
electric utility's or the investor -owned natural gas utility’s retail assets 3
and recoverable through the investor -owned electric utility's or the 4
investor-owned natural gas utility’s retail rates, either in the base rates 5
of the investor-owned electric utility or the investor -owned natural gas 6
utility, through a rider under this subchapter, or rates otherwise approved 7
by the commission. 8
(2)(A) A payment by a customer or customers for any a portion of 9
any strategic investments through a contribution in aid of construction shall 10
be deducted from the cost of the strategic investments capitalized and 11
recovered through rates. 12
(B) A payment by a customer or customers through any other 13
forms of payment shall be recorded for ratemaking purposes, when the 14
strategic investments are first included in rates and shall be recognized as 15
payment over a period not to exceed the life of the strategic investments, in 16
a manner that provides comparable benefits for other customers over the life 17
of the strategic investments. 18
19
23-4-1305. Procedure to recover strategic investments through riders — 20
Investor-owned electric utility and investor -owned natural gas utility. 21
(a) An investor-owned electric utility or an investor -owned natural 22
gas utility electing to file with the Arkansas Public Service Commission a 23
rider to recover strategic investments that are not otherwise included in 24
rates previously approved by the commission, may file an application to 25
implement the rider any time within twelve (12) months after: 26
(1) The commission enters an order approving an application 27
under § 23-3-201 et seq. or the Utility Facility Environmental and Economic 28
Protection Act, § 23 -18-501 et seq., or a notice under § 23 -18-104; or 29
(2) Any other application related to the siting or prudence of 30
the decision to invest in strategic investments. 31
(b) An investor-owned electric utility or an investor -owned natural 32
gas utility shall file: 33
(1) An annual update to the rider to reflect the annual 34
expenditures; 35
(2) An update to any projections included in the rider to 36 As Engrossed: S3/11/25 SB307
26 03-11-2025 17:15:03 ANS209
recover strategic investments; and 1
(3) An investor-owned electric utility's or an investor -owned 2
natural gas utility’s recovery through the rider shall be limited to the 3
amounts identified by the investor -owned electric utility or an investor -4
owned natural gas utility in the proceeding in which the commission approved 5
the strategic investments unless a greater amount is subsequently authorized 6
by the commission. 7
(c) The annual update required under subsection (b) of this section 8
shall include the information stated in subsections (a) -(b) of this section 9
for strategic investments following subsequent commission orders approving 10
strategic investments. 11
(d) An investor-owned electric utility or an investor -owned natural 12
gas utility shall immediately notify the commission of any significant delays 13
or material changes in the construction schedule to include any strategic 14
investments that are abandoned before completion or for which construction 15
has been indefinitely suspended or material changes in costs of any strategic 16
investments recovered through the rider under this subsection (d). 17
(e)(1) An investor-owned electric utility or an investor -owned natural 18
gas utility shall remove the cost of any strategic investments that are 19
abandoned before completion or for which construction has been indefinitely 20
suspended from the rider unless the commission determines, based on 21
substantial evidence provided by the investor -owned electric utility or the 22
investor-owned natural gas utility, that: 23
(A) The costs were reasonable and prudently incurred at 24
the time the costs were incurred; 25
(B) Continued recovery through the rider remains 26
reasonable; 27
(C) The circumstance of the abandonment before completion 28
or indefinite construction suspension is reasonable; and 29
(D) Recovery of those costs is in the public interest. 30
(2) Upon removal of any costs for strategic investments that are 31
abandoned before completion or for which construction has been indefinitely 32
suspended, the investor -owned electric utility or the investor -owned natural 33
gas utility may seek recovery of those costs through rates if the commission 34
determines, based on substantial evidence provided by the investor -owned 35
electric utility or the investor -owned natural gas utility, that: 36 As Engrossed: S3/11/25 SB307
27 03-11-2025 17:15:03 ANS209
(A) The costs were reasonable and prudently incurred at 1
the time those costs were incurred; 2
(B) The circumstance of the abandonment before completion 3
or indefinite construction suspension is reasonable; and 4
(C) Recovery of those costs is in the public interest. 5
(3)(A) An investor-owned electric utility or an investor -owned 6
natural gas utility may request recovery of any costs for strategic 7
investments that are abandoned before completion or for which construction 8
has been indefinitely suspended if the costs for strategic investments that 9
are abandoned before completion or for which construction has been 10
indefinitely suspended are removed from recovery through the rider in a 11
separate proceeding. 12
(B) Upon receipt of a request for recovery of costs under 13
subdivision (e)(3)(A) of this section, the commission shall determine: 14
(i) Whether recovery of those costs is in the public 15
interest; and 16
(ii) The form and timing of recovery through rates 17
charged to customers. 18
(f)(1)(A) Except as provided in subdivision (f)(2)(D)(i) of this 19
section, an investor -owned electric utility's or an investor -owned natural 20
gas utility’s total amount of revenue increase from an annual update to the 21
rider under this subchapter shall not result in the investor -owned electric 22
utility's or the investor -owned natural gas utility’s rates exceeding a level 23
ten percent (10%) below the national average for all sectors. 24
(B) For this comparison, the rates under subdivision 25
(f)(1)(A) of this section shall be calculated using: 26
(i) The same method as that used by the United 27
States Energy Information Administration and published in its most recent 28
edition of the Electric Power Annual report for electric utilities, as 29
adopted by the commission by rule, or the Natural Gas Annual report for 30
natural gas utilities, as adopted by the commission by rule; and 31
(ii) Data from the same calendar year as the United 32
States Energy Information Administration's publication to which the investor -33
owned electric utility's or the investor -owned natural gas utility’s revenue 34
increase is compared. 35
(C) If the commission finds that the investor -owned 36 As Engrossed: S3/11/25 SB307
28 03-11-2025 17:15:03 ANS209
electric utility or the investor -owned natural gas utility provides 1
substantial evidence to the commission demonstrating that its rates will 2
remain capable of attracting or retaining economic development opportunities 3
for the state even if the rates exceed ten percent (10%) below national 4
average and that doing so is in the public interest, then the commission 5
shall approve each revenue increase. 6
(2)(A) If the commission approves a revenue increase for an 7
investor-owned electric utility or an investor -owned natural gas utility from 8
an annual update to the rider under this subchapter that results in the 9
investor-owned electric utility's or the investor -owned natural gas utility’s 10
rates exceeding a level ten percent (10%) below the national average, the 11
commission shall submit a letter to the cochairs of the Legislative Council 12
notifying the General Assembly that the commission has approved a revenue 13
increase for an investor -owned electric utility or investor -owned natural gas 14
utility from an annual update to the rider under this subchapter that has 15
resulted in an investor -owned electric utility's or an investor -owned natural 16
gas utility’s total rates inclusive of all riders is exceeding a level ten 17
percent (10%) below the national average. 18
(B) Unless the commission approves an increase in the 19
total amount of revenue increase from an annual update to the rider under 20
this subchapter that exceeds a level ten percent (10%) below the national 21
average for all sectors under subdivision (f)(2)(A) of this section, the 22
investor-owned electric utility or the investor -owned natural gas utility 23
shall adjust its annual update to the rider under subsections (a) —(d) of this 24
section to include only a revenue increase that results in rates that are ten 25
percent (10%) below the national average. 26
(C) The commission shall verify that an annual update to 27
the rider under subsections (a) —(d) of this section does not include a 28
revenue increase that results in rates exceeding a level ten percent (10%) 29
below the national average unless it authorizes a greater amount under 30
subdivision (f)(1)(A) of this section. 31
(D)(i) If an investor -owned natural gas utility’s rates 32
are above the national average for all sectors calculated using the same 33
method as that used by the United States Energy Information Administration 34
and published in its most recent edition of the Natural Gas Annual report for 35
natural gas utilities, as adopted by the commission by rule, and calculated 36 As Engrossed: S3/11/25 SB307
29 03-11-2025 17:15:03 ANS209
using data from the same calendar year as the United States Energy 1
Information Administration publication to which the investor -owned natural 2
gas utility’s revenue increase is compared, the total amount of revenue 3
increase or decrease for an investor -owned natural gas utility from an annual 4
update to the rider under this subchapter shall not exceed four percent (4%) 5
of each rate class's total revenue. 6
(ii) If a conflict exists between subdivision (f)(1) 7
of this section and subdivision (f)(2)(D)(i) of this section, subdivision 8
(f)(2)(D)(i) of this section shall control. 9
(E) The commission shall submit an annual report to the 10
Legislative Council describing: 11
(i) The strategic investments included in the rider 12
for an investor-owned electric utility or an investor -owned natural gas 13
utility; and 14
(ii) The change in rates resulting from the 15
investor-owned electric utility's and the investor -owned natural gas 16
utility’s annual update to the rider under this subchapter on the investor -17
owned electric utility's or the investor -owned natural gas utility’s rates. 18
(3) An investor-owned electric utility shall submit an annual 19
report to the commission describing its generation portfolio mix based on the 20
generation capacity mix and on the energy mix. 21
(4) The commission shall submit an annual report to the 22
Legislative Council describing the generation portfolio mix based on the 23
generation capacity mix and based on the energy mix for each investor -owned 24
electric utility. 25
(g) Once strategic investments in public utility facilities are 26
complete and in service, an investor -owned electric utility or an investor -27
owned natural gas utility shall: 28
(1) Reconcile the actual expenditures and any projected amounts 29
included in the rider; 30
(2) Net any differences in projected amounts and actual 31
expenditures; and 32
(3) Either: 33
(A) Reduce the amounts ultimately capitalized by any over -34
collection; or 35
(B) Recover any under -collection through subsequent years’ 36 As Engrossed: S3/11/25 SB307
30 03-11-2025 17:15:03 ANS209
rider filings. 1
(h) For recovery through the rider, an investor -owned electric utility 2
or an investor-owned natural gas utility shall give priority to strategic 3
investments in new electric generation and transmission facilities located in 4
Arkansas, unless: 5
(1) The investor-owned electric utility or the investor -owned 6
natural gas utility demonstrates, and the commission finds that a strategic 7
investment in new electric generation and transmission facilities located 8
outside of Arkansas provides greater benefits to the investor -owned electric 9
utility's or the investor -owned natural gas utility’s customers in Arkansas 10
than a comparable strategic investment in new electric generation and 11
transmission facilities located in Arkansas; 12
(2) A comparable strategic investment in new electric generation 13
or transmission facility is not available or cannot be constructed in 14
Arkansas; or 15
(3) A customer or customers contract to pay all or a portion of 16
the cost of the strategic investment in the resource through a special rate 17
contract, a renewable rate schedule, a contribution in aid of construction, 18
or other form of payment. 19
20
23-4-1306. Authorization to recover strategic investments through 21
rider – Electric distribution cooperative and electric generation and 22
transmission cooperative. 23
(a) An electric distribution cooperative or an electric generation and 24
transmission cooperative may obtain a rider to recover strategic investments 25
if not otherwise recoverable in rates previously approved by the Arkansas 26
Public Service Commission after: 27
(1) A commission order approving an application under § 23 -3-201 28
et seq. or the Utility Facility Environmental and Economic Protection Act, § 29
23-18-501 et seq. or a notice under § 23 -18-104; or 30
(2) A commission order approving any other application related 31
to the sighting or prudence of the decision to invest in the new strategic 32
investments. 33
(b)(1) An electric distribution cooperative or an electric generation 34
and transmission cooperative may elect to file with the commission a rider to 35
recover strategic investments that are not included in rates. 36 As Engrossed: S3/11/25 SB307
31 03-11-2025 17:15:03 ANS209
(2) The electric distribution cooperative or the electric 1
generation and transmission cooperative shall provide notice to the Attorney 2
General of the filing of the rider by the electric distribution cooperative 3
or the electric generation and transmission cooperative on the date the 4
electric distribution cooperative or the electric generation and transmission 5
cooperative files the rider with the commission. 6
(c) An electric distribution cooperative or an electric generation and 7
transmission cooperative may select the date of the first annual filing 8
update, with all subsequent updates to be filed on or by the same day 9
annually as the first filing update. 10
(d) For a rider under this subchapter, an electric distribution 11
cooperative or an electric generation and transmission cooperative shall use 12
a rider test period. 13
(e)(1) Upon receipt of an electric distribution cooperative’s or an 14
electric generation and transmission cooperative's filing to implement the 15
rider rate schedule and each annual update under this subchapter, the 16
commission shall issue an order approving the rider rate schedule and each 17
annual update to recover strategic investments under this subchapter if the 18
commission determines that the electric distribution cooperative’s or the 19
electric generation and transmission cooperative’s application complies with 20
and therefore is in the public interest. 21
(2)(A) Unless the commission determines that approving the 22
electric distribution cooperative's or the electric generation and 23
transmission cooperative's application does not comply with this subchapter, 24
the commission shall enter an order within ninety (90) calendar days 25
following the date of the electric distribution cooperative's or the electric 26
generation and transmission cooperative’s filing. 27
(B)(i) If the commission determines that approving an 28
application does not comply with this section, the commission shall enter an 29
order denying the application. 30
(ii) In the order entered by the commission under 31
subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 32
(a) The basis for the commission's findings; 33
and 34
(b) Any evidence or other information 35
submitted by the electric distribution cooperative or the electric generation 36 As Engrossed: S3/11/25 SB307
32 03-11-2025 17:15:03 ANS209
and transmission cooperative as part of its application that the commission 1
deems to be insufficient. 2
(C) Each annual update shall include, for the initial 3
rider test year, the construction work in progress costs that will ultimately 4
be capitalized on which the utility will earn a return, amounts that would 5
otherwise be recorded as allowance for funds used during construction, and 6
any expenses associated with the construction work in progress that will not 7
be capitalized. 8
(D) The commission shall verify the amounts included in 9
each annual update reflect the amounts authorized for recovery under the 10
Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 11
(E) The commission shall complete its review of each 12
annual update filing and issue its order within sixty (60) days following the 13
date of the annual update filing. 14
(F)(i) If the electric distribution cooperative or 15
electric generation and transmission cooperative submits an amended filing 16
remedying the areas of noncompliance identified by the commission in its 17
order, the commission shall enter an order approving the application within 18
ten (10) calendar days following the date of the amended filing unless the 19
commission finds that the filing does not comply with the provisions of this 20
subchapter. 21
(ii) If the commission finds that the amended filing 22
does not remedy the areas of noncompliance, the commission shall enter an 23
order denying the application. 24
(iii) In the order entered under subdivision 25
(e)(2)(F)(ii) of this section, the commission shall discuss: 26
(a) The basis for the commission’s findings; 27
and 28
(b) Any evidence or other information 29
submitted by the electric distribution cooperative or electric generation and 30
transmission cooperative with its amended filing that the commission finds 31
does not comply with specific provisions of this subchapter. 32
(G) The process outlined in subdivisions (e)(2)(B) and (F) 33
of this section may continue until the commission finds that: 34
(i) The electric distribution cooperative's or an 35
electric generation and transmission cooperative’s application complies with 36 As Engrossed: S3/11/25 SB307
33 03-11-2025 17:15:03 ANS209
this subchapter; 1
(ii) The electric distribution cooperative or the 2
electric generation and transmission cooperative withdraws its application; 3
or 4
(iii) The electric distribution cooperative or the 5
electric generation and transmission cooperative appeals the commission's 6
decision under § 23-2-423. 7
(H) If the commission fails to issue its order within the 8
time frames stated in this subchapter, the electric distribution 9
cooperative's or the electric generation and transmission cooperative’s 10
filing shall become effective by operation of law, subject to completion of 11
the commission’s review under this subchapter. 12
(f)(1) At the election of the electric distribution cooperative or the 13
electric generation and transmission cooperative, strategic investments shall 14
be recovered through the rider under this subchapter, separate from any rate 15
adjustments by an electric distribution cooperative under § 23 -4-901 et seq., 16
any rate adjustments by an electric generation and transmission cooperative 17
under § 23-4-1101 et seq., any other rider, or otherwise as part of the 18
electric distribution cooperative's or the electric generation and 19
transmission cooperative’s rates approved by the commission. 20
(2) If elected by an electric distribution cooperative or an 21
electric generation and transmission cooperative, the rider shall remain in 22
effect under this subchapter until the electric distribution cooperative or 23
the electric generation and transmission cooperative decides to withdraw the 24
rider with respect to future cost recovery for strategic investments to be 25
made after the date of the withdrawal. 26
(g) For the purposes of calculating rates to recover the costs of 27
strategic investments, including rates implemented through an individual 28
customer contract, the commission shall ensure that the rates charged to 29
customers recover the costs of strategic investments in a manner that is 30
consistent with applicable law and in the public interest. 31
(h)(1) An amount collected through the rider under this subchapter 32
shall be collected subject to refunds pending the completion of the 33
commission's review under this subchapter. 34
(2) At any time during the process, if the commission finds that 35
any costs were not prudently incurred, the commission shall order that the 36 As Engrossed: S3/11/25 SB307
34 03-11-2025 17:15:03 ANS209
costs that were not prudently incurred be refunded to customers through bill 1
credits. 2
(i) The rider elected by an electric distribution cooperative or an 3
electric generation and transmission cooperative under this subchapter to 4
recover strategic investments is a revenue requirement rider and shall 5
provide an electric distribution cooperative's or an electric generation and 6
transmission cooperative's approved times interest earned ratio, including 7
any amounts to build members equity, for the construction work in progress 8
during construction and return on rate base plus operating expenses once the 9
strategic investments are complete and in service. 10
(j)(1) An electric distribution cooperative or an electric generation 11
and transmission cooperative shall not accrue an allowance for funds used 12
during construction for strategic investments with costs recovered through 13
the rider. 14
(2) Instead the commission may allow an electric distribution 15
cooperative or an electric generation and transmission cooperative to adjust 16
its revenues through the rider under this subchapter to maintain its 17
authorized times interest earned ratio for expenditures associated with any 18
construction work in progress. 19
(k) The commission may allow an electric distribution cooperative or 20
an electric generation and transmission cooperative to recover through the 21
rider under this subchapter any expenses associated with the construction of 22
strategic investments that will not be capitalized. 23
(l) In calculating construction work in progress, including actual 24
costs and any projections, the electric distribution cooperative or the 25
electric generation and transmission cooperative shall base all amounts on 26
year-end information not subject to averaging beginning -of-year and end-of-27
year balances. 28
(m) For the purposes of the rider under this subchapter, the electric 29
distribution cooperative's or the electric generation and transmission 30
cooperative’s times interest earned ratio shall be the times interest earned 31
ratio underlying its currently approved rates, including any additional 32
amounts to build equity of the members of the electric distribution 33
cooperative or the electric generation and transmission cooperative. 34
(n)(1) On the strategic investments' being complete and in service, 35
the commission shall authorize the electric distribution cooperative or the 36 As Engrossed: S3/11/25 SB307
35 03-11-2025 17:15:03 ANS209
electric generation and transmission cooperative to adjust its revenues 1
through the rider under this subchapter to maintain its authorized times 2
interest earned ratio for expenditures associated with any construction work 3
in progress costs that will ultimately be capitalized or recorded as 4
allowance for funds used during construction when the strategic investments 5
are complete and in service. 6
(2) Once the strategic investments are complete and in service, 7
the commission shall authorize the electric distribution cooperative or the 8
electric generation and transmission cooperative to recover through the rider 9
under this subchapter any on -going expenses associated with the strategic 10
investments. 11
(3) In the electric distribution cooperative's or the electric 12
generation and transmission cooperative’s next general rate case proceeding, 13
the commission shall allow the electric distribution cooperative or the 14
electric generation and transmission cooperative to include any capitalized 15
amounts and associated expenses for completed strategic investments in its 16
base rates. 17
(4)(A) In its next general rate case proceeding, the electric 18
distribution cooperative or the electric generation and transmission 19
cooperative shall move any amounts for any completed strategic investments 20
from the rider under this subchapter into its base rates. 21
(B) The electric distribution cooperative or the electric 22
generation and transmission cooperative shall continue to recover through the 23
rider under this subchapter the costs and expenses associated with any 24
strategic investments that are not complete and in service. 25
(o) The revenues from the rider under this subchapter shall be 26
included in calculating the allowed level of any rate increase for electric 27
distribution cooperative rate adjustments under § 23 -4-901 et seq. or 28
electric generation and transmission cooperative rate adjustments under § 23 -29
4-1101 et seq. but shall otherwise be excluded from the revenues included in 30
electric distribution cooperative rate adjustments under § 23 -4-901 et seq. 31
or electric generation and transmission cooperative rate adjustments under § 32
23-4-1101 et seq. 33
(p) The commission shall authorize an electric distribution 34
cooperative or an electric generation and transmission cooperative to 35
monetize or apply any tax credits or other tax incentives, including without 36 As Engrossed: S3/11/25 SB307
36 03-11-2025 17:15:03 ANS209
limitation investment tax credits and production tax credits, where possible 1
to reduce the cost of constructing or acquiring any strategic investments for 2
the benefit of members of the electric distribution cooperative or the 3
electric generation and transmission cooperative. 4
(q)(1) An electric distribution cooperative or an electric generation 5
and transmission cooperative shall seek federal funds and loan programs to 6
reduce the cost of constructing, acquiring, and financing strategic 7
investments if possible, appropriate, and available for the benefit of 8
members of the electric distribution cooperative or the electric generation 9
and transmission cooperative. 10
(2) If an electric distribution cooperative or an electric 11
generation and transmission cooperative requests and receives federal funding 12
to support constructing or acquiring strategic investments, the applicable 13
amount of federal funding shall be deducted from the value of the strategic 14
investments that are capitalized and recoverable through rates charged to 15
members of the electric distribution cooperative or the electric generation 16
and transmission cooperative. 17
(r) If an electric distribution cooperative or an electric generation 18
and transmission cooperative has revenues above its authorized times interest 19
earned ratio, the electric distribution cooperative or the electric 20
generation and transmission cooperative shall not be required to adjust rates 21
if the electric distribution cooperative or the electric generation and 22
transmission cooperative can demonstrate that it has plans to invest in 23
strategic investments that would qualify for recovery through the rider in 24
amounts equal to or greater than the amount above the authorized times 25
interest earned ratio. 26
(s) Except as otherwise provided in this subchapter, this section does 27
not alter the powers and authority of the commission. 28
(t) A commission review of the expenditures associated with strategic 29
investments included in the rider under this subchapter, including evaluating 30
whether or not any costs or expenses are reasonable and prudently incurred, 31
shall be completed within twelve (12) calendar months after the date upon 32
which the electric distribution cooperative or the electric generation and 33
transmission cooperative provides notice that the strategic investments are 34
complete and in service. 35
(u) An expenditure associated with strategic investments for which an 36 As Engrossed: S3/11/25 SB307
37 03-11-2025 17:15:03 ANS209
application for approval is pending before the commission as of the effective 1
date of this subchapter shall be eligible for recovery through the rider 2
under this subchapter if: 3
(1) The costs are not otherwise included in rates approved by 4
the commission before the effective date of this subchapter; and 5
(2) The electric distribution cooperative or the electric 6
generation and transmission cooperative has an application pending that was 7
filed before the effective date of this 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 siting or 16
prudence of the decision to invest in the new strategic investments; and 17
(4) The commission enters an order after January 1, 2025, 18
approving an application that was filed before the effective date of this 19
subchapter for approval: 20
(A) To construct a power generation facility outside of 21
the state under § 23 -18-104; 22
(B) To obtain a certificate of environmental compatibility 23
and public need under the Utility Facility Environmental and Economic 24
Protection Act, § 23 -18-501 et seq.; 25
(C) To obtain a certificate of public convenience and 26
necessity under § 23 -3-201 et seq.; or 27
(D) For any other application related to the siting or 28
prudence of the decision to invest in the new strategic investments. 29
(v)(1) If a customer pays or multiple customers pay for a portion of 30
any strategic investments through a contribution in aid of construction or 31
through other form of payment, the strategic investments shall continue to be 32
considered strategic investments and classified as part of the electric 33
distribution cooperative's or the electric generation and transmission 34
cooperative’s retail assets and recoverable through the electric distribution 35
cooperative's or the electric generation and transmission cooperative’s 36 As Engrossed: S3/11/25 SB307
38 03-11-2025 17:15:03 ANS209
retail rates, either in the base rates of the electric distribution 1
cooperative or the electric generation and transmission cooperative, through 2
a rider under this subchapter, or rates otherwise approved by the commission. 3
(2)(A) A payment by a customer or customers for a portion of any 4
strategic investments through a contribution in aid of construction shall be 5
deducted from the cost of the strategic investments capitalized and recovered 6
through rates. 7
(B) A payment by a customer or customers through any other 8
forms of payment shall be recorded for ratemaking purposes when the strategic 9
investments are first included in rates and shall be recognized as payment 10
over a period not to exceed the life of the strategic investments in a manner 11
that provides comparable benefits for other customers over the life of the 12
strategic investments. 13
14
23-4-1307. Procedure to recover strategic investments through rider — 15
Electric distribution cooperative and electric generation and transmission 16
cooperative. 17
(a) An electric distribution cooperative or an electric generation and 18
transmission cooperative electing to file with the Arkansas Public Service 19
Commission a rider under this subchapter to recover strategic investments not 20
otherwise included in rates previously approved by the commission, may file 21
an application to implement the rider any time within twelve (12) months 22
after: 23
(1) A commission order approving an application under § 23 -3-201 24
et seq. or the Utility Facility Environmental and Economic Protection Act, § 25
23-18-501 et seq., or a notice under § 23 -18-104; or 26
(2) Any other application related to the siting or prudence of 27
the decision to invest in the strategic investments. 28
(b)(1) An electric distribution cooperative or an electric generation 29
and transmission cooperative shall file an annual update to the rider under 30
this subchapter to reflect the annual expenditures plus an update to any 31
projections included in the rider under this subchapter to recover strategic 32
investments. 33
(2) An electric distribution cooperative’s or an electric 34
generation and transmission cooperative’s recovery through the rider shall be 35
limited to the amounts identified by the electric distribution cooperative or 36 As Engrossed: S3/11/25 SB307
39 03-11-2025 17:15:03 ANS209
the electric generation and transmission cooperative in the proceeding in 1
which the commission approved the strategic investments unless a greater 2
amount is subsequently authorized by the commission. 3
(c) The annual update required under subdivision (b)(1) of this 4
section shall include the amounts stated in this section for strategic 5
investments following subsequent orders from the commission approving 6
strategic investments. 7
(d) An electric distribution cooperative or an electric generation and 8
transmission cooperative shall immediately notify the commission of any 9
significant delays or material changes in the construction schedule to 10
include any strategic investments that are abandoned before completion or for 11
which construction has been indefinitely suspended or material changes in 12
costs of any strategic investments recovered through the rider in this 13
subsection (d). 14
(e)(1) An electric distribution cooperative or an electric generation 15
and transmission cooperative shall remove from the rider under this 16
subchapter the cost of any strategic investments that are abandoned before 17
completion or for which construction has been indefinitely suspended unless 18
the commission determines, based on substantial evidence provided by the 19
electric distribution cooperative or the electric generation and transmission 20
cooperative, that: 21
(A) The costs were reasonable and prudently incurred at 22
the time those costs were incurred; 23
(B) Continued recovery through the rider under this 24
subchapter remains reasonable; 25
(C) The circumstance of the abandonment before completion 26
or indefinite construction suspension is reasonable; and 27
(D) Recovery of those costs is in the public interest. 28
(2) Upon removal of any costs for strategic investments that are 29
abandoned or for which construction has been indefinitely suspended, an 30
electric distribution cooperative or an electric generation and transmission 31
cooperative may seek recovery of those costs through rates if the commission 32
determines, based on substantial evidence provided by the electric 33
distribution cooperative or the electric generation and transmission 34
cooperative, that: 35
(A) The costs were reasonable and prudently incurred at 36 As Engrossed: S3/11/25 SB307
40 03-11-2025 17:15:03 ANS209
the time those costs were incurred; 1
(B) The circumstance of the abandonment before completion 2
or indefinite construction suspension is reasonable; and 3
(C) Recovery of those costs is in the public interest. 4
(3)(A) An electric distribution cooperative or an electric 5
generation and transmission cooperative may request recovery of any costs for 6
strategic investments that are abandoned before completion or for which 7
construction has been indefinitely suspended and that are removed from 8
recovery through the rider under this subchapter in a separate proceeding. 9
(B) The commission shall determine: 10
(i) Whether recovery of those costs is in the public 11
interest; and 12
(ii) The form and timing of recovery through rates 13
charged to customers. 14
(f)(1)(A) An electric distribution cooperative’s or an electric 15
generation and transmission cooperative’s total amount of revenue increase 16
from an annual update to the rider under this subchapter shall not result in 17
the electric distribution cooperative’s or the electric generation and 18
transmission cooperative’s rates exceeding a level ten percent (10%) below 19
the national average for all sectors calculated using the same method as that 20
used by the United States Energy Information Administration and published in 21
its most recent editions of the Electric Power Annual report for electric 22
public utilities as adopted by the commission by rule and calculated using 23
data from the same calendar year as the United States Energy Information 24
Administration publication to which the electric distribution cooperative's 25
or the electric generation and transmission cooperative’s revenue increase is 26
compared. 27
(B) If an electric distribution cooperative or an electric 28
generation and transmission cooperative provides substantial evidence 29
demonstrating that the electric distribution cooperative's or the electric 30
generation and transmission cooperative's rates will remain capable of 31
attracting or retaining economic development opportunities for the state even 32
if the rates exceed a level of ten percent (10%) below national average and 33
that doing so is in the public interest, then the commission shall approve 34
the revenue increase. 35
(2)(A) If the commission approves a revenue increase for an 36 As Engrossed: S3/11/25 SB307
41 03-11-2025 17:15:03 ANS209
electric distribution cooperative or an electric generation and transmission 1
cooperative from an annual update to the rider under this subchapter that 2
results in the electric distribution cooperative's or the electric generation 3
and transmission cooperative's rates exceeding a level ten percent (10%) 4
below the national average, the commission shall submit a letter to the 5
cochairs of the Legislative Council notifying the General Assembly that the 6
commission has approved a revenue increase for the electric distribution 7
cooperative or the electric generation and transmission cooperative from an 8
annual update to the rider under this subchapter that has resulted in the 9
electric distribution cooperative’s or the electric generation and 10
transmission cooperative’s total rates, inclusive of all riders, that exceeds 11
a level ten percent (10%) below the national average. 12
(B) Unless the commission approves an increase in the 13
total amount of revenue increase from an annual update to the rider under 14
this subchapter that exceeds a level ten percent (10%) below the national 15
average for all sectors under subdivision (g)(1)(A) of this section, the 16
electric distribution cooperative or the electric generation and transmission 17
cooperative shall adjust an annual update as required under subsections (a) —18
(c) of this section to include only a revenue increase that results in rates 19
that are ten percent (10%) below the national average. 20
(C) The commission shall verify that an annual update to 21
the rider under subsections (a) —(c) of this section does not include a 22
revenue increase that results in rates exceeding a level ten percent (10%) 23
below the national average unless it authorizes a greater amount under 24
subdivision (f)(1)(A). 25
(g) The commission shall submit an annual report to the Legislative 26
Council describing the strategic investments included in the rider under this 27
subchapter for each electric distribution cooperative or electric generation 28
and transmission cooperative and indicating the change in rates resulting 29
from each electric distribution cooperative's or electric generation and 30
transmission cooperative's annual update to the rider under this subchapter 31
on the electric distribution cooperative's or the electric generation and 32
transmission cooperative’s rates. 33
(h)(1) Each electric distribution cooperative or electric generation 34
and transmission cooperative shall submit an annual report to the commission 35
describing the electric distribution cooperative or the electric generation 36 As Engrossed: S3/11/25 SB307
42 03-11-2025 17:15:03 ANS209
and transmission cooperative generation portfolio mix based on the generation 1
capacity mix and based on the energy mix. 2
(2) The commission shall submit an annual report to the 3
Legislative Council describing the generation portfolio mix based on the 4
generation capacity mix and based on the energy mix for an electric 5
distribution cooperative or an electric generation and transmission 6
cooperative. 7
(i) Once strategic investments in public utility facilities that are 8
complete and in service, an electric distribution cooperative or an electric 9
generation and transmission cooperative shall: 10
(1) Reconcile the actual expenditures and any projected amounts 11
included in the rider under this subchapter to recover strategic investments; 12
(2) Net any differences in projected amounts and actual 13
expenditures; and 14
(3) Either: 15
(A) Reduce the amounts ultimately capitalized by any over -16
collection; or 17
(B) Recover any under -collection through subsequent years’ 18
rider to recover strategic investments filings. 19
(j) For recovery through the rider, an electric distribution 20
cooperative or an electric generation and transmission cooperative shall give 21
priority to strategic investments in new electric generation and transmission 22
facilities located in Arkansas, unless: 23
(1) The electric distribution cooperative or the electric 24
generation and transmission cooperative demonstrates, and the commission 25
finds that a strategic investment in new electric generation and transmission 26
facilities located outside of Arkansas provides greater benefits to the 27
electric distribution cooperative's or an electric generation and 28
transmission cooperative’s customers in Arkansas than a comparable strategic 29
investment in new electric generation and transmission facilities located in 30
Arkansas; 31
(2) A comparable strategic investment in new electric generation 32
or transmission facility is not available or cannot be constructed in 33
Arkansas; or 34
(3) A customer or customers contract to pay all or a portion of 35
the cost of the strategic investment in the resource through a special rate 36 As Engrossed: S3/11/25 SB307
43 03-11-2025 17:15:03 ANS209
contract, a renewable rate schedule, a contribution in aid of construction, 1
or other form of payment. 2
3
23-4-1308. Recovery of advanced energy technologies and feasibility 4
studies under strategic investments rider — Definition. 5
(a)(1)(A) Upon a finding by the Arkansas Public Service Commission 6
that advanced energy technologies are in the public interest, a public 7
utility may elect to pursue strategic investments in the advanced energy 8
technologies and shall recover strategic investments in the advanced energy 9
technologies through the rider obtained under this subchapter after a 10
commission order approving an application under § 23 -3-201 et seq. or § 23-11
18-501 et seq., a notice under § 23 -18-104, or any other application related 12
to the siting or prudence of the decision to invest in strategic investments. 13
(B) The commission may find that advanced energy 14
technologies are in the public interest under subdivision (a)(1)(A) of this 15
section by considering whether those advanced energy technologies are: 16
(i) Technically feasible; 17
(ii) Commercially and financially viable; and 18
(iii) Otherwise beneficial to customers in Arkansas. 19
(2)(A) A facility using advanced energy technologies that are in 20
use by a public utility in Arkansas to serve customers, including without 21
limitation nuclear generation or hydroelectric generation, pumped or run -of-22
river, is not subject to subdivision (a)(1)(A) of this section. 23
(B) A public utility may recover the costs of feasibility 24
studies and strategic investments in advanced energy technologies that are 25
currently being used or have been used by the public utility in Arkansas to 26
serve customers through a rider obtained under this subchapter. 27
(3) As used in this section, "advanced energy technologies" 28
includes without limitation: 29
(A) Modular nuclear reactors; 30
(B) New technologies for nuclear generation technologies; 31
(C) Hydrogen-fueled generation technologies; 32
(D) Geothermal generation technologies; 33
(E) Renewable natural gas technologies; 34
(F) Hydrogen technologies; 35
(G) Biomass generation technologies; 36 As Engrossed: S3/11/25 SB307
44 03-11-2025 17:15:03 ANS209
(H) Hydroelectric generation technologies; and 1
(I) Emissions capture and sequestration equipment or 2
facilities associated with any new or existing major utility facility as 3
defined in the Utility Facility Environmental and Economic Protection Act, § 4
23-18-501 et seq., or other electric transmission facilities or natural gas 5
transmission facilities by a public utility that are: 6
(i) Required by state law or rule or federal 7
regulation; 8
(ii) Paid for in total or in part by a customer or 9
customers through a special rate contract, a contribution in aid of 10
construction, or other form of payment; or 11
(iii) Otherwise found by the commission to be in the 12
public interest. 13
(b) A public utility shall monitor and evaluate advancements in 14
modular nuclear reactors and other new nuclear generation technologies and 15
evaluate the resources as part of the public utility's resource planning once 16
those technologies become in the public interest considering without 17
limitation whether or not those technologies become technically feasible, 18
commercially and financially viable, and otherwise beneficial to customers in 19
Arkansas. 20
(c) For strategic investments approved by the commission, a public 21
utility may elect to, and upon election may recover strategic investments in 22
advanced energy technologies and feasibility studies through a rider under 23
this section. 24
(d)(1) Upon election by a public utility, the commission shall 25
authorize a public utility to recover the reasonable and prudently incurred 26
costs of studying the feasibility of advanced energy technologies, including 27
the cost of engineering and economic analyses to assess the technical, 28
financial, and commercial feasibility of implementing and using advanced 29
energy technologies to serve customers in Arkansas through the rider to 30
recover strategic investments under this section for feasibility studies of 31
advanced energy technologies associated with strategic investments that are 32
approved by the commission. 33
(2) For all other feasibility studies of advanced energy 34
technologies, the commission shall authorize a public utility to recover the 35
reasonable and prudently incurred cost of the feasibility study and shall 36 As Engrossed: S3/11/25 SB307
45 03-11-2025 17:15:03 ANS209
determine the form and timing of recovery through rates charged to customers. 1
2
23-4-1309. Authorization of special rate contracts. 3
(a)(1) An investor-owned electric utility or an investor -owned natural 4
gas utility may enter into a special rate contract to serve a new or existing 5
customer location in Arkansas. 6
(2) If the Arkansas Public Service Commission finds that the 7
special rate contract under subdivision (a)(1) of this section is consistent 8
with the public interest, the commission shall enter an order approving the 9
special rate contract within ninety (90) days after an investor -owned 10
electric utility or an investor -owned natural gas utility files an 11
application for approval. 12
(3) If the commission finds that a special rate contract in the 13
application is inconsistent with the public interest under subdivision (b)(2) 14
of this section, the commission shall: 15
(A) Enter an order describing the provisions that are not 16
consistent with the public interest; and 17
(B) Provide an opportunity for the investor -owned electric 18
utility or the investor -owned natural gas utility to file an amended 19
application to remedy the identified insufficiencies. 20
(4)(A) If an investor -owned electric utility or an investor -21
owned natural gas utility files an amended application remedying those 22
provisions, the commission shall enter an order approving the special rate 23
contract in the application within thirty (30) days after the investor -owned 24
electric utility's or the investor -owned natural gas utility's filing. 25
(B) If the commission determines that approving the 26
contract is inconsistent with the public interest, in its order denying 27
approval of the contract, the commission shall include a discussion of: 28
(i) The basis for the commission's findings; and 29
(ii) The specific evidence or information provided 30
by the investor-owned electric utility or an investor -owned natural gas 31
utility as part of its application upon which the commission relied to reach 32
that conclusion in its order. 33
(C)(i) If an investor -owned electric utility or an 34
investor-owned natural gas utility submits additional evidence or other 35
information demonstrating that the contract is in the public interest, the 36 As Engrossed: S3/11/25 SB307
46 03-11-2025 17:15:03 ANS209
commission shall enter an order approving the contract within thirty (30) 1
days after its filing unless the commission determines that approving the 2
contract is inconsistent with the public interest. 3
(ii) If the commission determines that approving the 4
contract is inconsistent with the public interest, in its order denying 5
approval of the contract, the commission shall include a discussion of: 6
(a) The basis for the commission's findings; 7
and 8
(b) The specific evidence or information 9
provided by the investor -owned electric utility or the investor -owned natural 10
gas utility as part of its application upon which the commission relied to 11
reach that conclusion in its order. 12
(iii) The process outlined in subdivision (a)(4) of 13
this section may continue until the commission finds that: 14
(a) Approving the contract is in the public 15
interest; 16
(b) The investor-owned electric utility or the 17
investor-owned natural gas utility withdraws its application; or 18
(c) The investor-owned electric utility or an 19
investor-owned natural gas utility appeals the commission's decision under § 20
23-2-423. 21
(b)(1) An investor-owned electric utility or an investor -owned natural 22
gas utility shall be authorized to develop and implement rates and other 23
contract provisions to recover all or part of the cost of any strategic 24
investments necessary to serve the customer as part of the special rate 25
contract if the investor -owned electric utility or the investor -owned natural 26
gas utility demonstrates that doing so is in the public interest. 27
(2) As part of a special rate contract, the investor -owned 28
electric utility or the investor -owned natural gas utility is authorized to 29
set forth customer rates and other contract terms attributable to all or part 30
of the cost of any strategic investments through various cost recovery 31
methods, including without limitation: 32
(A) A contribution in aid of construction; 33
(B) Any other contribution toward the cost of the 34
strategic investments; 35
(C) As part of the customer's monthly rate; 36 As Engrossed: S3/11/25 SB307
47 03-11-2025 17:15:03 ANS209
(D) A customer prepayment or other charge; 1
(E) Prepaid allowance for funds used during construction; 2
or 3
(F) As part of a minimum bill provision. 4
(c) An electric cooperative corporation that is established under the 5
Electric Cooperative Corporation Act, § 23 -18-301 et seq., including any 6
electric generation and transmission cooperative, may facilitate the recovery 7
of all or part of the cost in subsections (a) and (b) of this section through 8
one (1) or more riders under this subchapter. 9
(d) This section does not alter or diminish the commission’s authority 10
over an electric utility’s allocated service territory, including without 11
limitation where the commission has authorized an electric utility to serve 12
within a municipality, territorial district, or other geographic area. 13
14
23-4-1310. Authorization for alternative methods of financing. 15
(a) An electric utility or a natural gas utility may use alternative 16
methods of financing for the purpose of financing strategic investments under 17
this subchapter. 18
(b) The alternative methods of financing may include without 19
limitation: 20
(1) Sale-leaseback agreements; 21
(2) Third-party financing or customer financing; or 22
(3) Other methods of financing. 23
(c)(1) The Arkansas Public Service Commission shall not disallow, 24
impute alternative values, or adjust the financing under this section unless 25
the commission determines based on substantial evidence that: 26
(A) The financing is unreasonable; 27
(B) The costs are not prudently incurred; or 28
(C) The financing is detrimental to customers. 29
(2)(A) If an electric utility or a natural gas utility files 30
additional evidence or other information demonstrating that the financing is 31
reasonable and in the public interest, the commission shall enter an order 32
approving the financing within thirty (30) days after its filing if the 33
commission determines that approving the financing is consistent with the 34
public interest. 35
(B) If the commission determines that approving the 36 As Engrossed: S3/11/25 SB307
48 03-11-2025 17:15:03 ANS209
financing is inconsistent with the public interest, in its order denying 1
approval of the financing, the commission shall include a discussion of: 2
(i) The basis for the commission's findings; and 3
(ii) The specific evidence or information provided 4
by the electric utility or the natural gas utility as part of its application 5
upon which the commission relied to reach that conclusion in its order. 6
(C)(i) If an electric utility or a natural gas utility 7
submits additional evidence or other information demonstrating that the 8
financing is in the public interest, the commission shall enter an order 9
approving the contract within thirty (30) days after its filing unless the 10
commission determines that approving the financing is inconsistent with the 11
public interest. 12
(ii) If the commission determines that approving the 13
financing is inconsistent with the public interest, in its order denying 14
approval of the financing, the commission shall include a discussion of: 15
(a) The basis for the commission's findings; 16
and 17
(b) The specific evidence or information 18
provided by the electric utility or the natural gas utility as part of its 19
application upon which the commission relied to reach that conclusion in its 20
order. 21
(D) The process outlined in subdivision (c)(2) of this 22
section may continue until the commission finds that: 23
(i) Approving the financing is in the public 24
interest; 25
(ii) The electric utility or the natural gas utility 26
withdraws its application; or 27
(iii) The electric utility or the natural gas 28
utility appeals the commission's decision under § 23-3-423. 29
30
23-4-1311. Rules. 31
(a) The Arkansas Public Service Commission shall amend its rules as 32
required to implement and administer this subchapter. 33
(b) The commission shall initiate a proceeding to establish any new 34
rules or modify any existing rules necessary to administer this subchapter 35
and any other applicable exemptions under this subchapter. 36 As Engrossed: S3/11/25 SB307
49 03-11-2025 17:15:03 ANS209
(c) The commission shall enter an order approving the rules necessary 1
to administer this subchapter before March 31, 2026. 2
(d) An electric public utility or a natural gas public utility shall 3
be authorized to file an application under this section after the effective 4
date of this act before the commission completes any modification to its 5
rules necessary to carry out this section. 6
7
SECTION 17. Arkansas Code § 23 -18-104 is amended to read as follows: 8
23-18-104. Construction of power -generating facilities outside the 9
state Arkansas. 10
(a) No Except as provided under subsection (c) of this section, an 11
electric public utility subject to the jurisdiction of the Arkansas Public 12
Service Commission shall not commence construction of any power-generating 13
electric generating facility that is a major utility facility to be located 14
outside the boundaries of this state without the express written approval of 15
the commission. 16
(b)(1) Any An electric public utility proposing such construction 17
shall render adequate written notice to the commission of its intent in order 18
that the commission may conduct any germane inspection, investigation, public 19
hearing, or take any other action deemed appropriate by the commission. 20
(2) An electric public utility or natural gas public utility 21
shall provide notice to the commission of its intent to recover any strategic 22
investments, as defined under § 23 -4-1303, subject to the Generating Arkansas 23
Jobs Act of 2025, § 23 -4-1301 et seq., as part of a public utility's notice 24
under this section or application to construct an electric generation 25
facility under this subchapter. 26
(c) Failure on the part of any electric public utility to obtain prior 27
approval of the commission, as established in this section, shall constitute 28
grounds for disallowance by the commission of all costs and expenses 29
associated with the construction and subsequent operation of the facility 30
when computing the electric public utility's cost of service for purposes of 31
any rate-making proceedings. 32
(d)(1) If the commission determines that approving an electric public 33
utility's application to construct an electric generating facility located 34
outside of Arkansas that is a major utility facility is consistent with the 35
public interest, the commission shall enter an order granting approval of the 36 As Engrossed: S3/11/25 SB307
50 03-11-2025 17:15:03 ANS209
electric public utility's application within six (6) months after the 1
electric public utility submits its notice of intent to construct electric 2
generating facilities under this section. 3
(2)(A) If the commission determines that granting approval of an 4
application to construct an electric generating facility located outside of 5
Arkansas that is a major utility facility is not in the public interest, the 6
commission shall enter an order. 7
(B) In the order entered by the commission under 8
subdivision (d)(2)(A) of this section, the commission shall discuss: 9
(i) The basis for the commission's determination; 10
and 11
(ii) Any evidence or other information submitted by 12
the electric public utility as part of its notice or application upon which 13
that the commission relied to reach that determination. 14
(3)(A)(i) If an electric public utility submits additional 15
evidence or other information demonstrating that the construction of an 16
electric generating facility located outside of Arkansas that is a major 17
utility facility is reasonable, necessary, and in the public interest, then 18
the commission shall enter an order granting its approval within thirty (30) 19
days after the date of the electric public utility’s filing. 20
(ii)(a) If the commission finds that the electric 21
public utility’s filing fails to comply with this subchapter, the commission 22
shall enter an order. 23
(b) In the order entered by the commission 24
under subdivision (d)(3)(A)(ii)(a) of this section, the commission shall 25
discuss: 26
(1) The basis for the commission's 27
findings; and 28
(2) Any evidence or other information 29
submitted by the electric public utility as part of its notice or application 30
that the commission finds did not comply with this subchapter. 31
(B) The process described in subdivision (d)(2) of this 32
section and this subdivision (d)(3) may continue until the commission finds 33
that: 34
(i) The electric public utility’s application 35
complies with this subchapter; 36 As Engrossed: S3/11/25 SB307
51 03-11-2025 17:15:03 ANS209
(ii) The electric public utility withdraws its 1
application; or 2
(iii) The electric public utility appeals the 3
commission's decision under § 23-2-423. 4
(d)(e) Any electric public utility which does not own in whole or in 5
part another electric public utility and which is not owned in whole or in 6
part by a holding company and which derives less than twenty -five percent 7
(25%) of its total revenues from Arkansas customers is exempt from the 8
provisions of this section. 9
10
SECTION 18. Arkansas Code § 23 -18-202, concerning the jurisdiction of 11
the Arkansas Public Service Commission, is amended to add an additional 12
subsection to read as follows: 13
(c) An approval shall not be required from the commission for 14
borrowings, loan contracts, notes, mortgages, or guarantees from other public 15
or private sources that have been approved by a majority of the board of 16
directors of an electric cooperative corporation formed under the Electric 17
Cooperative Corporation Act, § 23 -18-301 et seq. 18
19
SECTION 19. Arkansas Code § 23 -18-502(a), concerning the legislative 20
findings under the Utility Facility Environmental and Economic Protection 21
Act, is amended to add an additional subdivision to read as follows: 22
(4) Furthermore, it is necessary to reform the certification 23
process for construction of major utility facilities under this subchapter to 24
expedite the certification process and reduce the regulatory and 25
administrative burdens associated with the certification process. 26
27
SECTION 20. Arkansas Code § 23 -18-503, concerning the definitions used 28
under the Utility Facility Environmental and Economic Protection Act, is 29
amended to add additional subdivisions to read as follows: 30
(16) "Gas transmission line" means a natural gas pipeline or 31
connected series of natural gas pipelines, other than a gathering line, that: 32
(A) Transports gas from a gathering pipeline or natural 33
gas storage facility to a distribution center or to a large volume customer 34
using similar volumes of gas as a distribution center and is not located 35
downstream from a distribution center; 36 As Engrossed: S3/11/25 SB307
52 03-11-2025 17:15:03 ANS209
(B) Has a maximum allowable operating pressure of twenty 1
percent (20%) or more of specified minimum yield strength; 2
(C) Transports gas within a storage field; or 3
(D) Is voluntarily or otherwise designated by the operator 4
as a transmission pipeline; and 5
(17) "Strategic investments" means the same as defined in § 23 -6
4-1303. 7
8
SECTION 21. Arkansas Code § 23 -18-503(6), concerning the definition of 9
"major utility facility" under the Utility Facility Environmental and 10
Economic Protection Act, is amended to read as follows: 11
(6) “Major utility facility” means: 12
(A) An A single electric generating plant and associated 13
transportation and storage facilities for fuel and other facilities designed 14
for or capable of operation at a capacity of fifty megawatts (50 MW) or more; 15
(B) For the sole purpose of requiring an environmental 16
impact statement under this subchapter, an electric transmission line and 17
associated facilities including substations of: 18
(i) A design voltage of one hundred kilovolts (100 19
kV) or more and extending a distance of more than ten (10) miles; or 20
(ii) A design voltage of one hundred seventy 21
kilovolts (170 kV) or more and extending a distance of more than one (1) 22
mile; or 23
(C) For the sole purpose of requiring an environmental 24
impact statement under this subchapter, a A gas transmission line and 25
associated facilities designed for or capable of transporting gas at 26
pressures in excess of one hundred twenty -five pounds per square inch (125 27
psi) and extending a distance of more than one (1) mile five (5) miles except 28
gas pipelines devoted solely to the gathering of gas from gas wells 29
constructed within the limits of any gas field as defined by the Oil and Gas 30
Commission; 31
32
SECTION 22. Arkansas Code § 23 -18-504(a), concerning exemptions for a 33
major utility facility under the Utility Facility Environmental and Economic 34
Protection Act, is amended to read as follows: 35
(a)(1) This subchapter does not apply to a major utility facility: 36 As Engrossed: S3/11/25 SB307
53 03-11-2025 17:15:03 ANS209
(1)(A) That is located outside of Arkansas; 1
(B) For which, before July 24, 1973, an application for 2
the approval of the major utility facility was made to any federal, state, 3
regional, or local governmental agency that possesses the jurisdiction to 4
consider the matters prescribed for finding and determination in § 23 -18-5
519(a) and (b); 6
(2)(C) For which, before July 24, 1973, the Arkansas 7
Public Service Commission issued a certificate of convenience and necessity 8
or otherwise approved the construction of the major utility facility; 9
(3)(D) Over which an agency of the federal government has 10
exclusive jurisdiction; 11
(4)(E) A majority of which is owned by one (1) or more 12
exempt wholesale generators as defined in § 23 -1-101(5); 13
(5)(F) That is a major utility facility for generating 14
electric energy, if the majority of the major utility facility is owned by 15
any person, including without limitation a public utility that will not 16
recover the cost of the major utility facility in rates subject to regulation 17
by the commission; or 18
(6)(G) That is a gas pipeline of less than five (5) miles 19
in length constructed: 20
(A)(i) Primarily for serving a single customer or a 21
group of customers that is under common ownership or control; 22
(B)(ii) For use by the customer or group of 23
customers that have entered into a lease to facilitate the issuance of bonds 24
under Title 14, Chapter 164 of this Code; and 25
(C)(iii) Entirely on land: 26
(i)(a) Owned by the customer or group of 27
customers to be served; or 28
(ii)(b) Leased by the customer or group of 29
customers to be served. 30
31
SECTION 23. Arkansas Code § 23 -18-508 is amended to read as follows: 32
23-18-508. Rules. 33
(a) The Arkansas Public Service Commission shall have and is granted 34
the power and authority to make and amend from time to time after reasonable 35
notice and hearing reasonable rules establishing exemptions from some or all 36 As Engrossed: S3/11/25 SB307
54 03-11-2025 17:15:03 ANS209
of the requirements of this subchapter for the construction, reconstruction, 1
or expansion of any major utility facility which is unlikely to have major 2
adverse environmental or economic impact by reason of length, size, location, 3
available space, or right -of-way on or adjacent to existing utility 4
facilities, and similar reasons. 5
(b) The commission shall: 6
(1) Initiate a proceeding to modify any existing rules necessary 7
to administer this subchapter and any other applicable exemptions under this 8
subchapter; and 9
(2) Enter an order modifying any existing rules on or before 10
March 31, 2026. 11
(c) An electric or natural gas public utility shall be authorized to 12
file an application under this section after the effective date of this act 13
before the commission completes any modification of its rules necessary to 14
carry out this section. 15
16
SECTION 24. Arkansas Code § 23 -18-510 is amended to read as follows: 17
23-18-510. Certificate of environmental compatibility and public need 18
— Requirement — Exceptions. 19
(a)(1) Except for persons exempted as provided in subsection (c) of 20
this section and § 23 -18-504(a) and § 23-18-508, a person shall not begin 21
construction of a major utility facility in the state without first obtaining 22
a certificate of environmental compatibility and public need for the major 23
utility facility from the Arkansas Public Service Commission. 24
(2)(A) The replacement, reconfiguration, or expansion of an 25
existing transmission facility with a similar facility in substantially the 26
same location or the rebuilding, upgrading, modernizing, or reconstruction 27
for the purposes of increasing capacity or reusing a generation or 28
transmission interconnection shall not constitute construction of a major 29
utility facility if no increase in width of right -of-way is required. 30
(B) In the instance of a generation facility that would 31
meet the requirements of subdivision (a)(2)(A) of this section but for an 32
increase in the width of the right -of-way caused by replacement, 33
reconfiguration, or expansion of a transmission or related facility, the 34
commission shall consider the generation facility separately from any 35
transmission or related facilities to be under separate construction. 36 As Engrossed: S3/11/25 SB307
55 03-11-2025 17:15:03 ANS209
(b)(1) An entity, including without limitation a person, public 1
utility, utility, regional transmission organization, municipality, merchant 2
transmission provider, merchant generator, or other entity, whether regulated 3
or not by the commission, shall not begin construction of an electric 4
transmission line and associated facilities, as described in § 23 -18-5
503(6)(B), within a national interest electric transmission corridor without 6
first obtaining a certificate of environmental compatibility and public need 7
for the facility from the commission. 8
(2) An electric public utility or a natural gas public utility 9
shall provide notice to the commission of its intent to construct to recover 10
any strategic investments, as defined under § 23 -4-1303, subject to the 11
Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq., as part of a 12
public utility's application under the Utility Facility Environmental and 13
Economic Protection Act, § 23 -18-501 et seq. 14
(c) This subchapter does not require a certificate of environmental 15
compatibility and public need or an amendment of such a certificate for: 16
(1) Reconstruction, alteration, or relocation of a major utility 17
facility that must be reconstructed, altered, or relocated because of the 18
requirements of a federal, state, or county governmental body or agency for 19
purposes of highway transportation, public safety, or air and water quality; 20
or 21
(2) An electric transmission line and associated facilities 22
including substations of a design voltage of one hundred kilovolts (100 kV) 23
or more to be constructed or operated by a municipal electric utility system 24
that is located within the territorial limits of the municipal electric 25
utility system. 26
(d) An entity granted a certificate of environmental compatibility and 27
public need pursuant to subsection (b) of this section shall have the right 28
of eminent domain as provided by Arkansas law for the limited purpose of 29
constructing the certificated electric transmission line and associated 30
facilities, as described in § 23 -18-503(6)(B), to the extent that the 31
facility is located within a national interest electric transmission 32
corridor. 33
(e)(1) Strategic investments in major utility facilities under § 23 -34
18-503(6)(A) located on the same or adjacent property or in the same rights -35
of-way or adjacent rights -of-way by a public utility are exempt from this 36 As Engrossed: S3/11/25 SB307
56 03-11-2025 17:15:03 ANS209
subchapter but shall be subject to the requirements of § 23 -3-201 et seq. 1
(2) The purchase of a major utility facility constructed by a 2
third party for that third party, upon completion of construction or at any 3
time after completion of construction, by a public utility is exempt from 4
this subchapter but shall be subject to the requirements of § 23 -3-201 et 5
seq. 6
(3) Except as provided in this section, this section does not 7
alter the powers and authority of the commission. 8
9
SECTION 25. Arkansas Code § 23 -18-513 is amended to read as follows: 10
23-18-513. Application for certificate — Service or notice of 11
application. 12
(a) Each public utility filing an application for a certificate of 13
environmental compatibility and public need shall be accompanied by proof of 14
service of a copy of the application on provide notice of its application as 15
the Arkansas Public Service Commission may require. 16
(b) Each application submitted under subsection (a) of this section 17
shall be accompanied by proof of notice of the application to : 18
(1) The mayor of each municipality; 19
(2) The county judge; 20
(3) The chair of the county planning board, if any; 21
(4) Any head of a governmental agency charged with the duty of 22
protecting the environment or of planning land use, upon which the Arkansas 23
Public Service Commission has by rule or order directed that service be made, 24
in the area in which any portion of such facility is to be located, both as 25
primarily and as alternatively proposed; 26
(5) Each member of the General Assembly in whose district the 27
facility or any alternative location listed in the application is to be 28
located; 29
(6) The office of the Governor; and 30
(7) The director or other administrative head of the following 31
state agencies or departments: 32
(A) Division of Environmental Quality; 33
(B) Department of Health; 34
(C) Arkansas Economic Development Commission; 35
(D) Arkansas Department of Transportation; 36 As Engrossed: S3/11/25 SB307
57 03-11-2025 17:15:03 ANS209
(E) Arkansas State Game and Fish Commission; 1
(F) Arkansas Natural Heritage Commission; 2
(G) Any state agency which may have the authority to 3
assist in financing the applicant's facility; 4
(H) Any other state agency or department which manages or 5
has jurisdiction over state -owned lands on which all or part of the proposed 6
utility facility is to be or may be located; 7
(I) Department of Finance and Administration; 8
(J) State Energy Conservation and Policy Office 9
[abolished]; 10
(K) The office of the Attorney General; and 11
(L)(K) Any other state agency or department designated by 12
Arkansas Public Service Commission rule or order ; and 13
(8) Proof that a copy of the application has been made available 14
for public inspection at all public libraries in each county in which the 15
proposed utility facility is to be or may be located . 16
(b)(c) The copy of the application shall be accompanied by a notice 17
specifying the date on or about which the application is to be filed and a 18
notice that interventions or limited appearances must be filed with the 19
Arkansas Public Service Commission within thirty (30) days after the date set 20
forth as the date of filing, unless good cause is shown pursuant to § 23 -18-21
517. 22
(c)(1)(d)(1) Each application shall also be accompanied by proof that 23
written notice specifying the date on or about which the application is to be 24
filed and the date that interventions or limited appearances must be filed 25
with the Arkansas Public Service Commission, unless good cause is shown 26
pursuant to § 23-18-517, has been sent by certified mail to each owner of 27
real property on the proposed route selected by the public utility on which a 28
major utility facility is to be located or constructed. 29
(2) The written notice required by this subsection shall be 30
directed to the address of the owner of the real property as it appears on 31
the records in the office of the county sheriff or county tax assessor for 32
the mailing of statements for taxes as provided in § 26 -35-705. 33
(d)(1)(e) Each application shall also be accompanied by proof that 34
public notice of the application was given to persons residing in 35
municipalities and counties entitled to receive notice under subsection (a) 36 As Engrossed: S3/11/25 SB307
58 03-11-2025 17:15:03 ANS209
(b) of this section by the publication in a newspaper having substantial 1
circulation in the municipalities or counties of: 2
(A)(1) A summary of the application; 3
(B)(2) A statement of the date on or about which it is to be 4
filed; and 5
(C)(3) A statement that intervention or limited appearances 6
shall be filed with the Arkansas Public Service Commission within thirty (30) 7
days after the date stated in the notice, unless good cause is shown under § 8
23-18-517. 9
(2)(A)(4) For purposes of this subsection, an environmental 10
impact statement submitted as an exhibit to the application need not be 11
summarized, but the published notice shall include a statement that the 12
impact statements are on file at the office of the Arkansas Public Service 13
Commission and available for public inspection or are available 14
electronically on the Arkansas Public Service Commission's website. 15
(B) The applicant shall also cause copies of the 16
environmental impact statement to be furnished to at least one (1) of its 17
local offices, if any, in the counties in which any portion of the major 18
utility facilities are to be located, both as primarily or as alternatively 19
proposed, to be there available for public inspection. 20
(C) The published notice shall contain a statement of the 21
location of the local offices described in subdivision (d)(2)(B) of this 22
section and the times the impact statements will be available for public 23
inspection. 24
(e)(f) Inadvertent failure of service on or notice to any of the 25
municipalities, counties, governmental agencies, or persons identified in 26
subsections (a) and (c) (b) and (d) of this section may be cured pursuant to 27
orders of the Arkansas Public Service Commission designed to afford such 28
persons adequate notice to enable their effective participation in the 29
proceedings. 30
(f)(g) In addition, after filing, the Arkansas Public Service 31
Commission may require the applicant to serve notice of the application or 32
copies thereof, or both, upon such other persons and file proof thereof, as 33
the Arkansas Public Service Commission may deem appropriate. 34
(g)(h) Where any personal service or notice is required in this 35
section, the service may be made by any officer authorized by law to serve 36 As Engrossed: S3/11/25 SB307
59 03-11-2025 17:15:03 ANS209
process, by personal delivery, or by certified mail. 1
2
SECTION 26. Arkansas Code § 23 -18-514 is repealed. 3
23-18-514. Application for certificate — Commentary by state agencies 4
— Deficiency letters. 5
(a)(1) Promptly after the filing of an application for a certificate 6
of environmental compatibility and public need, the staff of the Arkansas 7
Public Service Commission shall invite comments from all state agencies 8
entitled to service under § 23 -18-513 as to the adequacy of applicant's 9
statements. 10
(2) The invitation to comment shall advise the state agencies 11
that comments must be received within sixty (60) days of the date of mailing 12
or delivery thereof, unless an agency requests for cause a longer period for 13
consideration. 14
(b)(1) Upon review of the comments, if any, if the staff shall 15
determine that the applicant failed to include or adequately develop any 16
relevant environmental or economic aspect of the facility, it shall issue a 17
deficiency letter pointing out in detail all such specific deficiencies in 18
the statements. 19
(2) The deficiency letter shall be prepared and served upon the 20
applicant as promptly as possible and in no event later than twenty (20) days 21
before the date set for the public hearing. 22
(3) The applicant shall promptly respond to any deficiency 23
letter, and the public hearing shall be deferred unless the applicant has 24
responded prior thereto to any deficiency letter. 25
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SECTION 27. Arkansas Code § 23 -18-516(a)(1), concerning hearings on 27
applications or amendments, is amended to read as follows: 28
(a)(1) Upon receipt of an application complying with §§ 23 -18-511 — 29
23-18-514 23-18-513, the Arkansas Public Service Commission shall promptly 30
fix a date for the commencement of a public hearing thereon, which date shall 31
be not fewer than forty (40) days nor more than one hundred eighty (180) 32
ninety (90) days after the receipt of the application, and shall conclude the 33
proceedings as expeditiously as practicable. 34
35
SECTION 28. Arkansas Code § 23 -18-517(a), concerning parties to 36 As Engrossed: S3/11/25 SB307
60 03-11-2025 17:15:03 ANS209
certification proceedings, is amended to read as follows: 1
(a) The parties to a certification proceeding shall include: 2
(1) The applicant; or 3
(2) Each municipality, county, and government agency or 4
department or other person entitled to receive service of a copy of the 5
application under § 23 -18-513(a) if it has filed with the Arkansas Public 6
Service Commission a notice of intervention as a party within thirty (30) 7
days after service; or 8
(3) A person residing in a municipality or county that is 9
entitled to receive service of a copy of the application under § 23 -18-513(a) 10
or any domestic nonprofit corporation formed in whole or in part to promote 11
conservation or natural beauty, to promote energy conservation, to protect 12
the environment, personal health, or other biological values, to represent 13
commercial and industrial groups, or to promote the orderly development of 14
the areas in which the facility is to be located if the: 15
(A) Person or organization has an interest that may be 16
directly affected by the commission's action; 17
(B) Interest is not adequately represented by other 18
parties; and 19
(C) Person A person as defined under § 23 -1-101(8) or 20
corporation that has petitioned the commission for leave to intervene as a 21
party within thirty (30) days after the date given in the public notice as 22
the date of filing the application. 23
24
SECTION 29. Arkansas Code § 23 -18-519(a), concerning decisions of the 25
Arkansas Public Service Commission and modifications of applications, is 26
amended to read as follows: 27
(a)(1) The Arkansas Public Service Commission shall render a decision 28
upon the record either granting or denying the application as filed or 29
granting it upon such terms, conditions, or modifications of the location, 30
financing, construction, operation, or maintenance of the major utility 31
facility as the commission may deem appropriate. 32
(2) The record may include by reference the findings of the 33
commission in an energy resource declaration -of-need proceeding that the 34
utility needs additional energy supply resources or transmission resources. 35
(3)(A) If the commission determines that granting a certificate 36 As Engrossed: S3/11/25 SB307
61 03-11-2025 17:15:03 ANS209
of environmental compatibility and public need is in the public interest, it 1
shall enter an order granting a certificate of environmental compatibility 2
and public need within six (6) months after the receipt of the application. 3
(B)(i) If the commission determines that granting a 4
certificate of environmental compatibility and public need is not in the 5
public interest, it shall enter an order. 6
(ii) An order entered under subdivision (a)(3)(B)(i) 7
of this section shall discuss: 8
(a) The basis for the commission's findings; 9
and 10
(b) Any evidence upon which the commission 11
relied to reach that conclusion in its order. 12
(C)(i) If a public utility submits additional evidence 13
demonstrating that the strategic investments in major utility facilities that 14
are subject to this subchapter are reasonable, necessary, and in the public 15
interest, the commission shall enter an order granting the certificate within 16
thirty (30) days after the date of the public utility’s filing unless the 17
commission finds that the strategic investments subject to this subchapter 18
are not reasonable, necessary, or in the public interest. 19
(ii) An order entered under subdivision (a)(3)(C)(i) 20
of this section shall discuss: 21
(a) The basis for the commission's findings; 22
and 23
(b) Any evidence or other information upon 24
which the commission relied to reach that conclusion in its order. 25
(iii) The process outlined in subdivision (a)(3)(B) 26
of this section and this subdivision (a)(3)(C) may continue until the 27
commission finds that: 28
(a) The strategic investments subject to this 29
subchapter are reasonable, necessary, and in the public interest; 30
(b) The public utility withdraws its 31
application; or 32
(c) The public utility appeals the 33
commission's decision under § 23-2-423. 34
35
SECTION 30. Arkansas Code § 23 -18-521 is amended to read as follows: 36 As Engrossed: S3/11/25 SB307
62 03-11-2025 17:15:03 ANS209
23-18-521. Issuance of certificate — Effect. 1
(a) A certificate to construct and operate a major utility facility 2
may be issued only under this subchapter unless a certificate is not required 3
under § 23-18-510(c) or 23-18-510(e). 4
(b)(1) A certificate issued under this subchapter to an applicant is 5
in lieu of and exempts the applicant from the requirements of obtaining a 6
certificate of convenience and necessity under § 23 -3-201 et seq. 7
(2) A certificate issued under this subchapter entitles the 8
applicant to a permit under § 23 -3-501 et seq. without any further notice or 9
hearing if the applicant has filed with the Arkansas Public Service 10
Commission the consent or authorization required by § 23 -3-504(7) and paid 11
the damages stated in § 23 -3-501 et seq. 12
(c) If the applicant is a corporation, before a certificate can be 13
issued under § 23-18-519, a certified copy of the articles of incorporation 14
or charter shall be on file with the commission. 15
16
SECTION 31. EMERGENCY CLAUSE. It is found and determined by the 17
General Assembly of the State of Arkansas that significant investment in 18
electric public utility infrastructure and natural gas public utility 19
infrastructure is required to enable this state to attract and serve economic 20
development projects across a variety of industries, as well as to continue 21
reliably supporting existing and new customers; that these economic 22
development projects and the continued provision of reliable electric utility 23
services and natural gas utility services are essential to the future of this 24
state; and that this act is immediately necessary because strategic 25
investments in electric public utility infrastructure and natural gas public 26
utility infrastructure support the development of sites available for 27
economic development projects. Therefore, an emergency is declared to exist, 28
and this act being immediately necessary for the preservation of the public 29
peace, health, and safety shall become effective on: 30
(1) The date of its approval by the Governor; 31
(2) If the bill is neither approved nor vetoed by the Governor, 32
the expiration of the period of time during which the Governor may veto the 33
bill; or 34
(3) If the bill is vetoed by the Governor and the veto is 35
overridden, the date the last house overrides the veto. 36 As Engrossed: S3/11/25 SB307
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/s/J. Dismang 2
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APPROVED: 3/20/25 5
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