AR
Arkansas Senate Bill SB307

Arkansas 2025 Regular Session

Arkansas Senate Bill SB307 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
2-Act 373 of the Regular Session
3-*ANS209* 03-11-2025 17:15:03 ANS209
4-
5-State of Arkansas As Engrossed: S3/11/25 1
2+*ANS209* 02/25/2025 4:06:48 PM ANS209
3+State of Arkansas 1
64 95th General Assembly A Bill 2
75 Regular Session, 2025 SENATE BILL 307 3
86 4
97 By: Senators J. Dismang, M. McKee, J. Boyd, S. Flowers, R. Murdock, B. Johnson, B. Davis, Hester, 5
108 Gilmore 6
11-By: Representatives Eaves, Achor, F. Allen, Barnett, Beaty Jr., Brooks, M. Brown, Clowney, Cozart, 7
12-Duffield, Eaton, Eubanks, Evans, K. Ferguson, Gramlich, Hall, Jean, L. Johnson, Ladyman, Lynch, 8
13-Maddox, B. McKenzie, Pilkington, J. Richardson, R. Scott Richardson, Rye, Unger, Warren, Wing, 9
14-Wooten 10
15- 11
16-For An Act To Be Entitled 12
17-AN ACT TO AMEND THE LAW CONCERNING PUBLIC UTILITIES; 13
18-TO CREATE THE GENERATING ARKANSAS JOBS ACT OF 2025; 14
19-TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES. 15
9+By: Representative Eaves 7
10+ 8
11+For An Act To Be Entitled 9
12+AN ACT TO AMEND THE LAW CONCERNING PUBLIC UTILITIES; 10
13+TO CREATE THE GENERATING ARKANSAS JOBS ACT OF 2025; 11
14+TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES. 12
15+ 13
16+ 14
17+Subtitle 15
18+TO AMEND THE LAW CONCERNING PUBLIC 16
19+UTILITIES; TO CREATE THE GENERATING 17
20+ARKANSAS JOBS ACT OF 2025; AND TO 18
21+DECLARE AN EMERGENCY. 19
22+ 20
23+BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21
24+ 22
25+ SECTION 1. Arkansas Code § 23 -3-201(a), concerning requirements for 23
26+new construction or operation of equipment or facilities, is amended to read 24
27+as follows: 25
28+ (a) New construction or operation of equipment or facilities that are 26
29+located within this state for supplying a public service or the extension of 27
30+a public service within this state shall not be undertaken without first 28
31+obtaining from the Arkansas Public Service Commission a certificate that 29
32+public convenience and necessity require or will require the construction or 30
33+operation within this state. 31
34+ 32
35+ SECTION 2. Arkansas Code § 23 -3-201(b), concerning when a certificate 33
36+of public convenience is not required, is amended to add additional 34
37+subdivisions to read as follows: 35
38+ (3)(A) A public utility shall provide notice to the commission 36 SB307
39+
40+ 2 02/25/2025 4:06:48 PM ANS209
41+of the public utility's intent to recover any strategic investments that are 1
42+subject to this subchapter through a rider under the Generating Arkansas Jobs 2
43+Act of 2025, § 23-4-1301 et seq. as part of the public utility's application 3
44+under this subchapter. 4
45+ (B) To the extent a member cooperative of a generation and 5
46+transmission cooperative is exempt from the requirement to obtain a 6
47+certificate of public convenience and necessity under subsection (b) of this 7
48+section, the exemption shall extend to the generation and transmission 8
49+cooperative. 9
50+ (C) An exemption claimed by a public utility under this 10
51+section or under § 23 -18-504(a)(5) does not bar: 11
52+ (i) The public utility from voluntarily seeking the 12
53+issuance of a certificate of public convenience and necessity under this 13
54+section; or 14
55+ (ii) The commission from: 15
56+ (a) Granting the public utility the 16
57+certificate of public convenience and necessity sought under subdivision 17
58+(d)(1) of this section; and 18
59+ (b) Allowing the public utility to seek 19
60+recovery of the reasonable cost of the equipment or facilities through rates. 20
61+ 21
62+ SECTION 3. Arkansas Code § 23 -3-201, concerning requirements for a 22
63+certificate of public convenience and necessity, is amended to add an 23
64+additional subsection to read as follows: 24
65+ (e) As used in this section: 25
66+ (1) "Generation and transmission cooperative" means the same as 26
67+defined in § 23-4-1101; 27
68+ (2) "Major utility facility" means the same as defined in § 23 -28
69+18-503; and 29
70+ (3) "Strategic investments" means the same as defined in § 23 -4-30
71+1303. 31
72+ 32
73+ SECTION 4. Arkansas Code Title 23, Chapter 3, Subchapter 2, is amended 33
74+to add an additional section to read as follows: 34
75+ 23-3-207. Issuance of certificate of public convenience and necessity. 35
76+ (a) If the Arkansas Public Service Commission determines that granting 36 SB307
77+
78+ 3 02/25/2025 4:06:48 PM ANS209
79+a certificate of public convenience and necessity is consistent with the 1
80+public interest, the commission shall enter an order granting a certificate 2
81+of public convenience and necessity within six (6) months after the public 3
82+utility submits an application for a certificate of public convenience and 4
83+necessity. 5
84+ (b)(1) If the commission determines that granting a certificate of 6
85+public convenience and necessity is not in the public interest, the 7
86+commission shall enter an order denying the certificate of public convenience 8
87+and necessity. 9
88+ (2) In the order entered by the commission under subdivision 10
89+(b)(1) of this section, the commission shall discuss: 11
90+ (A) The basis for the commission's findings; and 12
91+ (B) Any evidence or other information submitted by the 13
92+public utility as part of its notice or application that the commission deems 14
93+to be insufficient. 15
94+ (3)(A) If a public utility submits additional evidence or other 16
95+information to the commission demonstrating that the strategic investments, 17
96+as defined in § 23-4-1303, that are subject to this subchapter are 18
97+reasonable, necessary, and in the public interest, then the commission shall 19
98+enter an order granting the certificate of public convenience and necessity 20
99+within thirty (30) days after the date of the public utility’s filing. 21
100+ (B) If the commission finds that the strategic investments 22
101+that are subject to this subchapter are not reasonable, necessary, or in the 23
102+public interest, the commission shall enter an order denying the certificate 24
103+of public convenience and necessity. 25
104+ (C) In the order issued under subdivision (b)(3)(B) of 26
105+this section, the commission shall discuss: 27
106+ (i) The basis for the commission's findings; and 28
107+ (ii) Any evidence or other information submitted by 29
108+the public utility as part of its notice or application that the commission 30
109+deems to be insufficient. 31
110+ (D) The process outlined in subdivisions (b)(3)(B) and (C) 32
111+of this section may continue until the commission finds that: 33
112+ (i) The public utility's application complies with 34
113+this subchapter; 35
114+ (ii) The public utility withdraws its application; 36 SB307
115+
116+ 4 02/25/2025 4:06:48 PM ANS209
117+or 1
118+ (iii) The public utility appeals the commission's 2
119+decision. 3
120+ 4
121+ SECTION 5. Arkansas Code § 23 -4-901, concerning definitions used under 5
122+a rate case by the Arkansas Public Service Commission, is amended to add 6
123+additional subdivisions to read as follows: 7
124+ (5) "Notice" means a written form document, not an application, 8
125+that contains only as much information as is needed to provide the necessary 9
126+information to the commission and member-consumers as is specifically 10
127+required under this subchapter; and 11
128+ (6) "Rate case procedures" means the administrative procedures 12
129+and requirements normally required by a co -op when adjusting rates and 13
130+charges under §§ 23-4-402, 23-4-405, 23-4-407 — 23-4-418, 23-4-422, and 23-4-14
131+620 — 23-4-634 or other applicable statutes and rules of the commission. 15
20132 16
21- 17
22-Subtitle 18
23-TO AMEND THE LAW CONCERNING PUBLIC 19
24-UTILITIES; TO CREATE THE GENERATING 20
25-ARKANSAS JOBS ACT OF 2025; AND TO 21
26-DECLARE AN EMERGENCY. 22
27- 23
28-BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
29- 25
30- SECTION 1. Arkansas Code § 23 -3-201(a), concerning requirements for 26
31-new construction or operation of equipment or facilities, is amended to read 27
32-as follows: 28
33- (a) New construction or operation of equipment or facilities that are 29
34-located within this state for supplying a public service or the extension of 30
35-a public service within this state shall not be undertaken without first 31
36-obtaining from the Arkansas Public Service Commission a certificate that 32
37-public convenience and necessity require or will require the construction or 33
38-operation within this state. 34
133+ SECTION 6. Arkansas Code § 23 -4-902 is amended to read as follows: 17
134+ 23-4-902. Exemption from rate case procedures, etc. 18
135+ A co-op, as defined in § 23 -4-901, shall not be subject to rate case 19
136+procedures and hearings and other requirements of §§ 23 -4-402 — 23-4-405, 23-20
137+4-407 — 23-4-418, and 23-4-620 — 23-4-634 and Arkansas Public Service 21
138+Commission rules implementary thereof, hereafter referred to as “rate case 22
139+procedures”, by the commission Arkansas Public Service Commission unless: 23
140+ (1) By action of its board of directors, the co -op elects to be 24
141+subject to rate case procedures by the commission; 25
142+ (2) A proposed change in the co -op's rates and charges exceeds 26
143+ten percent (10%) of total gross revenues; 27
144+ (3) Ten percent (10%) of the co -op's member-consumers petition 28
145+the commission to apply rate case procedures , and the commission determines 29
146+there is substantial evidence indicating that the rates and charges are 30
147+unreasonable; or 31
148+ (4) As otherwise provided in this subchapter. 32
149+ 33
150+ SECTION 7. Arkansas Code § 23 -4-903 is amended to read as follows: 34
151+ 23-4-903. Notification of proposed rate change. 35
152+ (a) Each co-op not subject to rate case procedures, at least ninety 36 SB307
153+
154+ 5 02/25/2025 4:06:48 PM ANS209
155+(90) days before the effective date of any proposed rate change, shall notify 1
156+the Arkansas Public Service Commission and each of its member -consumers of 2
157+the proposed rate change. Notice to the commission shall include a verified 3
158+statement showing the then total number of member -consumers of the co-op. 4
159+Notice by the co-op to its member-consumers shall: 5
160+ (1) Be in a notice form prescribed by the commission; 6
161+ (2) Be by regular mail and may be included in regular member -7
162+consumer billings or in regularly published co -op newsletters provided to its 8
163+member-consumers; and 9
164+ (3) Include a schedule of the proposed rate change, the 10
165+effective date of the proposed rate change, and the procedure necessary for 11
166+the member-consumers to petition the commission to apply rate case 12
167+procedures; and 13
168+ (4) Not require a new cost -of-service study, application for 14
169+approval, or additional rate case procedure requirement . 15
170+ (b) The commission shall not require or establish additional notice or 16
171+filing requirements for a co -op that is adjusting the co -op's rates and 17
172+charges under this subchapter and shall certify whether the co -op met the 18
173+notice requirements set forth in this subchapter. 19
174+ 20
175+ SECTION 8. Arkansas Code § 23 -4-905 is amended to read as follows: 21
176+ 23-4-905. Petition for relief from rate change — Effect. 22
177+ (a)(1) If, by the effective date of the proposed change in rates and 23
178+charges, the Arkansas Public Service Commission has received petitions from 24
179+fewer than fifteen percent (15%) ten percent (10%) of the member-consumers 25
180+requesting that the commission apply rate case procedures, then the 26
181+commission shall immediately certify that fact to the co -op. 27
182+ (2) The proposed rates and charges shall become effective as 28
183+published in the notice to the member -consumers. 29
184+ (b) Rates and charges so established shall be in effect for not less 30
185+than one (1) year, subject to the procedure provided for in § 23 -4-906. If, 31
186+on or before the effective date of the proposed change in rates and charges, 32
187+the commission has received petitions from ten percent (10%) of the member -33
188+consumers, then the commission shall notify the co -op that it will initiate 34
189+an investigation and may apply rate case procedures under § 23-4-908. 35
190+ 36 SB307
191+
192+ 6 02/25/2025 4:06:48 PM ANS209
193+ SECTION 9. Arkansas Code § 23 -4-907 is amended to read as follows: 1
194+ 23-4-907. Commission's jurisdiction not affected. 2
195+ Sections 23-4-902, 23-4-903, 23-4-905, and 23-4-906, 23-4-908, and 23-3
196+4-909 apply only to rates and charges and shall have no effect on the 4
197+Arkansas Public Service Commission's jurisdiction over a co -op as otherwise 5
198+provided by law. 6
199+ 7
200+ SECTION 10. Arkansas Code § 23 -4-908 is amended to read as follows: 8
201+ 23-4-908. Authority of commission. 9
202+ (a) The Upon receipt of a sufficient number of valid petitions under § 10
203+23-4-905, the Arkansas Public Service Commission shall have the authority to 11
204+investigate and determine the reasonableness of the change in rates and 12
205+charges of each co-op changing its rates and charges pursuant to this 13
206+subchapter, within one (1) year of the time of the change in rates and 14
207+charges. 15
208+ (b) If the commission preliminarily determines that there is 16
209+substantial evidence indicating that the rates and charges are unreasonable, 17
210+the commission shall have the authority to apply rate case procedures. 18
211+ (c)(1) After a hearing thereon, the commission shall have the 19
212+authority to modify all or any portion of the changes found to be 20
213+unreasonable. 21
214+ (2) If, following the hearing, the commission orders a change in 22
215+the co-op's rates and charges, the co -op shall not effect a subsequent change 23
216+in rates and charges pursuant to this subchapter for a period of twelve (12) 24
217+months from the date of the commission order. 25
218+ 26
219+ SECTION 11. Arkansas Code § 23 -4-909 is amended to read as follows: 27
220+ 23-4-909. Apportionment of rates and charges. 28
221+ (a) Upon receipt of a sufficient number of valid petitions under § 23 -29
222+4-905, the Arkansas Public Service Commission may inquire into the 30
223+reasonableness of the apportionment of rates and charges by a co -op. 31
224+ (b) When determining how rates and charges established under § 23 -4-32
225+903 are to be allocated among different rate classes, a co -op shall endeavor 33
226+to apportion the rates and charges in a manner which reflects consistent 34
227+with, as closely as practicable, the costs of providing service to each class 35
228+last approved cost-of-service study. 36 SB307
229+
230+ 7 02/25/2025 4:06:48 PM ANS209
231+ 1
232+ SECTION 12. Arkansas Code § 23 -4-1102 is amended to read as follows: 2
233+ 23-4-1102. Exemption from general rate case procedure. 3
234+ A generation and transmission cooperative may modify its rates and 4
235+charges if: 5
236+ (1) At least three-fourths (¾) of its board votes to change its 6
237+rates and charges, including a proposed change to cost allocation and rate 7
238+design of the generation and transmission cooperative ; 8
239+ (2) A proposed increase in the generation and transmission 9
240+cooperative's rates and charges does not exceed five percent (5%) in any 10
241+twelve-month period of the total gross revenues of the generation and 11
242+transmission cooperative; and 12
243+ (3) Any additional requirements of this subchapter are 13
244+satisfied. 14
245+ 15
246+ SECTION 13. Arkansas Code § 23 -4-1104(a)(2), concerning alternative 16
247+procedures for modifying rates and charges of a generation and transmission 17
248+cooperative, is amended to read as follows: 18
249+ (2) In addition to an attachment containing the proposed tariffs 19
250+to effect the modification of the rates and charges, the application shall 20
251+provide the following: 21
252+ (A) Proof of the board vote required by § 23 -4-1102; 22
253+ (B) The proof of notice required by § 23 -4-1103; 23
254+ (C) A current calculation of the generation and 24
255+transmission cooperative's: 25
256+ (i) Times interest earned ratio; 26
257+ (ii) Debt service coverage ratio; and 27
258+ (iii) Margins as a percent of revenue for the last 28
259+available calendar year; 29
260+ (D) An analysis of the impact of the proposed change in 30
261+rates and charges on each member cooperative's cost of wholesale power that 31
262+is acquired from the generation and transmission cooperative; 32
263+ (E) Documentary evidence that the impact of the proposed 33
264+change in rates and charges does not exceed five percent (5%) of the 34
265+generation and transmission cooperative's total gross revenues for the 35
266+previous calendar year twelve-month period before the generation and 36 SB307
267+
268+ 8 02/25/2025 4:06:48 PM ANS209
269+transmission cooperative's notice under § 23 -4-1103(a)(1); 1
270+ (F) Documentation that shows the derivation of the 2
271+generation and transmission cooperative's proposed changes in its rates and 3
272+charges; and 4
273+ (G)(i) Any other supporting documentation or evidence 5
274+required by the commission to validate the requirements of this subchapter . 6
275+ (ii)(a) However, the commission shall not require 7
276+the generation and transmission cooperative to prepare a cost -of-service 8
277+study. 9
278+ (b) Instead In lieu of voluntarily filing a 10
279+new cost-of-service study for approval, the generation and transmission 11
280+cooperative shall rely upon the most recent commission -approved cost 12
281+allocation. 13
282+ 14
283+ SECTION 14. Arkansas Code § 23 -4-1105(a), concerning the application 15
284+for modification of retail rates, is amended to read as follows: 16
285+ (a) A member cooperative may propose a modification of its retail 17
286+rates and charges to incorporate the proposed change in the generation and 18
287+transmission cooperative's wholesale rates and charges filed under § 23 -4-19
288+1104 if: 20
289+ (1) The member cooperative files its application for a 21
290+modification of its retail rates and charges with the Arkansas Public Service 22
291+Commission on the same within ten (10) days from the date as the generation 23
292+and transmission cooperative files its application for a modification of its 24
293+change in wholesale rates and charges under § 23 -4-1104; and 25
294+ (2) The member cooperative apportions its proposed change in 26
295+rates and charges in a manner that reflects, as closely as practicable, its 27
296+cost of providing service to each class. 28
297+ 29
298+ SECTION 15. Arkansas Code § 23 -4-1106 is repealed. 30
299+ 23-4-1106. Limitation on increase in rates. 31
300+ The generation and transmission cooperative shall not increase its 32
301+rates and charges under this subchapter by an aggregate total of more than 33
302+eight percent (8%) during any twenty -four-month period. 34
39303 35
40- SECTION 2. Arkansas Code § 23 -3-201(b), concerning when a certificate 36 As Engrossed: S3/11/25 SB307
41-
42- 2 03-11-2025 17:15:03 ANS209
43-
44-
45-of public convenience is not required, is amended to add additional 1
46-subdivisions to read as follows: 2
47- (3)(A) A public utility shall provide notice to the commission 3
48-of the public utility's intent to recover any strategic investments that are 4
49-subject to this subchapter through a rider under the Generating Arkansas Jobs 5
50-Act of 2025, § 23-4-1301 et seq. as part of the public utility's application 6
51-under this subchapter. 7
52- (B) To the extent a member cooperative of a generation and 8
53-transmission cooperative is exempt from the requirement to obtain a 9
54-certificate of public convenience and necessity under subsection (b) of this 10
55-section, the exemption shall extend to the generation and transmission 11
56-cooperative. 12
57- (C) An exemption claimed by a public utility under this 13
58-section or under § 23 -18-504(a)(5) does not bar: 14
59- (i) The public utility from voluntarily seeking the 15
60-issuance of a certificate of public convenience and necessity under this 16
61-section; or 17
62- (ii) The commission from: 18
63- (a) Granting the public utility the 19
64-certificate of public convenience and necessity sought under subdivision 20
65-(d)(1) of this section; and 21
66- (b) Allowing the public utility to seek 22
67-recovery of the reasonable cost of the equipment or facilities through rates. 23
68- 24
69- SECTION 3. Arkansas Code § 23 -3-201, concerning requirements for a 25
70-certificate of public convenience and necessity, is amended to add an 26
71-additional subsection to read as follows: 27
72- (e) As used in this section: 28
73- (1) "Generation and transmission cooperative" means the same as 29
74-defined in § 23-4-1101; 30
75- (2) "Major utility facility" means the same as defined in § 23 -31
76-18-503; and 32
77- (3) "Strategic investments" means the same as defined in § 23-4-33
78-1303. 34
79- 35
80- SECTION 4. Arkansas Code Title 23, Chapter 3, Subchapter 2, is amended 36 As Engrossed: S3/11/25 SB307
81-
82- 3 03-11-2025 17:15:03 ANS209
83-
84-
85-to add an additional section to read as follows: 1
86- 23-3-207. Issuance of certificate of public convenience and necessity. 2
87- (a) If the Arkansas Public Service Commission determines that granting 3
88-a certificate of public convenience and necessity is consistent with the 4
89-public interest, the commission shall enter an order granting a certificate 5
90-of public convenience and necessity within six (6) months after the public 6
91-utility submits an application for a certificate of public convenience and 7
92-necessity. 8
93- (b)(1) If the commission determines that granting a certificate of 9
94-public convenience and necessity is not in the public interest, the 10
95-commission shall enter an order denying the certificate of public convenience 11
96-and necessity. 12
97- (2) In the order entered by the commission under subdivision 13
98-(b)(1) of this section, the commission shall discuss: 14
99- (A) The basis for the commission's findings; and 15
100- (B) Any evidence or other information submitted by the 16
101-public utility as part of its notice or application that the commission deems 17
102-to be insufficient. 18
103- (3)(A) If a public utility submits additional evidence or other 19
104-information to the commission demonstrating that the strategic investments, 20
105-as defined in § 23-4-1303, that are subject to this subchapter are 21
106-reasonable, necessary, and in the public interest, then the commission shall 22
107-enter an order granting the certificate of public convenience and necessity 23
108-within thirty (30) days after the date of the public utility’s filing. 24
109- (B) If the commission finds that the strategic investments 25
110-that are subject to this subchapter are not reasonable, necessary, or in the 26
111-public interest, the commission shall enter an order denying the certificate 27
112-of public convenience and necessity. 28
113- (C) In the order issued under subdivision (b)(3)(B) of 29
114-this section, the commission shall discuss: 30
115- (i) The basis for the commission's findings; and 31
116- (ii) Any evidence or other information submitted by 32
117-the public utility as part of its notice or application that the commission 33
118-deems to be insufficient. 34
119- (D) The process outlined in subdivisions (b)(3)(B) and (C) 35
120-of this section may continue until the commission finds that: 36 As Engrossed: S3/11/25 SB307
121-
122- 4 03-11-2025 17:15:03 ANS209
123-
124-
125- (i) The public utility's application complies with 1
126-this subchapter; 2
127- (ii) The public utility withdraws its application; 3
128-or 4
129- (iii) The public utility appeals the commission's 5
130-decision under § 23-2-423. 6
131- 7
132- SECTION 5. Arkansas Code § 23 -4-901, concerning definitions used under 8
133-a rate case by the Arkansas Public Service Commission, is amended to add 9
134-additional subdivisions to read as follows: 10
135- (5) "Notice" means a written form document, not an application, 11
136-that contains only as much information as is needed to provide the necessary 12
137-information to the commission and member -consumers as is specifically 13
138-required under this subchapter; and 14
139- (6) "Rate case procedures" means the administrative procedures 15
140-and requirements normally required by a co -op when adjusting rates and 16
141-charges under §§ 23-4-402, 23-4-405, 23-4-407 — 23-4-418, 23-4-422, and 23-4-17
142-620 — 23-4-634 or other applicable statutes and rules of the commission. 18
143- 19
144- SECTION 6. Arkansas Code § 23 -4-902 is amended to read as follows: 20
145- 23-4-902. Exemption from rate case procedures, etc. 21
146- A co-op, as defined in § 23 -4-901, shall not be subject to rate case 22
147-procedures and hearings and other requirements of §§ 23 -4-402 — 23-4-405, 23-23
148-4-407 — 23-4-418, and 23-4-620 — 23-4-634 and Arkansas Public Service 24
149-Commission rules implementary thereof, hereafter referred to as “rate case 25
150-procedures”, by the commission Arkansas Public Service Commission unless: 26
151- (1) By action of its board of directors, the co -op elects to be 27
152-subject to rate case procedures by the commission; 28
153- (2) A proposed change in the co -op's rates and charges exceeds 29
154-ten percent (10%) of total gross revenues; 30
155- (3) Ten percent (10%) of the co -op's member-consumers petition 31
156-the commission to apply rate case procedures , and the commission notifies the 32
157-co-op that the commission will initiate an investigation and may apply rate 33
158-case procedures if the commission determines that there is substantial 34
159-evidence indicating that rates and charges are unreasonable; or 35
160- (4) As otherwise provided in this subchapter. 36 As Engrossed: S3/11/25 SB307
161-
162- 5 03-11-2025 17:15:03 ANS209
163-
164-
165- 1
166- SECTION 7. Arkansas Code § 23 -4-903 is amended to read as follows: 2
167- 23-4-903. Notification of proposed rate change. 3
168- (a) Each co-op not subject to rate case procedures, at least ninety 4
169-(90) days before the effective date of any proposed rate change, shall notify 5
170-the Arkansas Public Service Commission and each of its member -consumers of 6
171-the proposed rate change. Notice to the commission shall include a verified 7
172-statement showing the then total number of member -consumers of the co-op. 8
173-Notice by the co-op to its member-consumers shall: 9
174- (1) Be in a notice form prescribed by the commission; 10
175- (2) Be by regular mail and may be included in regular member -11
176-consumer billings or in regularly published co -op newsletters provided to its 12
177-member-consumers; and 13
178- (3) Include a schedule of the proposed rate change, the 14
179-effective date of the proposed rate change, and the procedure necessary for 15
180-the member-consumers to petition the commission to apply rate case 16
181-procedures; and 17
182- (4) Not require a new cost -of-service study, application for 18
183-approval, or additional rate case procedure requirement . 19
184- (b) The commission shall not require or establish additional notice or 20
185-filing requirements for a co -op that is adjusting the co -op's rates and 21
186-charges under this subchapter and shall certify whether the co -op met the 22
187-notice requirements set forth in this subchapter. 23
188- 24
189- SECTION 8. Arkansas Code § 23 -4-905 is amended to read as follows: 25
190- 23-4-905. Petition for relief from rate change — Effect. 26
191- (a)(1) If, by the effective date of the proposed change in rates and 27
192-charges, the Arkansas Public Service Commission has received petitions from 28
193-fewer than fifteen percent (15%) ten percent (10%) of the member-consumers 29
194-requesting that the commission apply rate case procedures, then the 30
195-commission shall immediately certify that fact to the co -op. 31
196- (2) The proposed rates and charges shall become effective as 32
197-published in the notice to the member -consumers. 33
198- (b) Rates and charges so established shall be in effect for not less 34
199-than one (1) year, subject to the procedure provided for in § 23 -4-906. If, 35
200-on or before the effective date of the proposed change in rates and charges, 36 As Engrossed: S3/11/25 SB307
201-
202- 6 03-11-2025 17:15:03 ANS209
203-
204-
205-the commission has received petitions from ten percent (10%) of the member -1
206-consumers, then the commission shall notify the co -op that it will initiate 2
207-an investigation and may apply rate case procedures under § 23-4-908. 3
304+ SECTION 16. Arkansas Code Title 23, Chapter 4, is amended to add an 36 SB307
305+
306+ 9 02/25/2025 4:06:48 PM ANS209
307+additional subchapter to read as follows: 1
308+ 2
309+Subchapter 13 — Generating Arkansas Jobs Act of 2025 3
208310 4
209- SECTION 9. Arkansas Code § 23 -4-907 is amended to read as follows: 5
210- 23-4-907. Commission's jurisdiction not affected. 6
211- Sections 23-4-902, 23-4-903, 23-4-905, and 23-4-906, 23-4-908, and 23-7
212-4-909 apply only to rates and charges and shall have no effect on the 8
213-Arkansas Public Service Commission's jurisdiction over a co -op as otherwise 9
214-provided by law. 10
215- 11
216- SECTION 10. Arkansas Code § 23 -4-908 is amended to read as follows: 12
217- 23-4-908. Authority of commission. 13
218- (a) The Upon receipt of a sufficient number of valid petitions under § 14
219-23-4-905, the Arkansas Public Service Commission shall have the authority to 15
220-investigate and determine the reasonableness of the change in rates and 16
221-charges of each co-op changing its rates and charges pursuant to this 17
222-subchapter, within one (1) year of the time of the change in rates and 18
223-charges. 19
224- (b) If the commission preliminarily determines that there is 20
225-substantial evidence indicating that the rates and charges are unreasonable, 21
226-the commission shall have the authority to apply rate case procedures. 22
227- (c)(1) After a hearing thereon, the commission shall have the 23
228-authority to modify all or any portion of the changes found to be 24
229-unreasonable. 25
230- (2) If, following the hearing, the commission orders a change in 26
231-the co-op's rates and charges, the co -op shall not effect a subsequent change 27
232-in rates and charges pursuant to this subchapter for a period of twelve (12) 28
233-months from the date of the commission order. 29
234- 30
235- SECTION 11. Arkansas Code § 23 -4-909 is amended to read as follows: 31
236- 23-4-909. Apportionment of rates and charges. 32
237- (a) Upon receipt of a sufficient number of valid petitions under § 23 -33
238-4-905, the Arkansas Public Service Commission may inquire into the 34
239-reasonableness of the apportionment of rates and charges by a co -op. 35
240- (b) When determining how rates and charges established under § 23 -4-36 As Engrossed: S3/11/25 SB307
241-
242- 7 03-11-2025 17:15:03 ANS209
243-
244-
245-903 are to be allocated among different rate classes, a co -op shall endeavor 1
246-to apportion the rates and charges in a manner which reflects consistent 2
247-with, as closely as practicable, the costs of providing service to each class 3
248-last approved cost-of-service study. 4
249- 5
250- SECTION 12. Arkansas Code § 23 -4-1102 is amended to read as follows: 6
251- 23-4-1102. Exemption from general rate case procedure. 7
252- A generation and transmission cooperative may modify its rates and 8
253-charges if: 9
254- (1) At least three-fourths (¾) of its board votes to change its 10
255-rates and charges, including a proposed change to cost allocation and rate 11
256-design of the generation and transmission cooperative ; 12
257- (2) A proposed increase in the generation and transmission 13
258-cooperative's rates and charges does not exceed five percent (5%) in any 14
259-twelve-month period of the total gross revenues of the generation and 15
260-transmission cooperative; and 16
261- (3) Any additional requirements of this subchapter are 17
262-satisfied. 18
263- 19
264- SECTION 13. Arkansas Code § 23 -4-1104(a)(2), concerning alternative 20
265-procedures for modifying rates and charges of a generation and transmission 21
266-cooperative, is amended to read as follows: 22
267- (2) In addition to an attachment containing the proposed tariffs 23
268-to effect the modification of the rates and charges, the application shall 24
269-provide the following: 25
270- (A) Proof of the board vote required by § 23 -4-1102; 26
271- (B) The proof of notice required by § 23 -4-1103; 27
272- (C) A current calculation of the generation and 28
273-transmission cooperative's: 29
274- (i) Times interest earned ratio; 30
275- (ii) Debt service coverage ratio; and 31
276- (iii) Margins as a percent of revenue for the last 32
277-available calendar year; 33
278- (D) An analysis of the impact of the proposed change in 34
279-rates and charges on each member cooperative's cost of wholesale power that 35
280-is acquired from the generation and transmission cooperative; 36 As Engrossed: S3/11/25 SB307
281-
282- 8 03-11-2025 17:15:03 ANS209
283-
284-
285- (E) Documentary evidence that the impact of the proposed 1
286-change in rates and charges does not exceed five percent (5%) of the 2
287-generation and transmission cooperative's total gross revenues for the 3
288-previous calendar year twelve-month period before the generation and 4
289-transmission cooperative's notice under § 23 -4-1103(a)(1); 5
290- (F) Documentation that shows the derivation of the 6
291-generation and transmission cooperative's proposed changes in its rates and 7
292-charges; and 8
293- (G)(i) Any other supporting documentation or evidence 9
294-required by the commission to validate the requirements of this subchapter . 10
295- (ii)(a) However, the commission shall not require 11
296-the generation and transmission cooperative to prepare a cost -of-service 12
297-study. 13
298- (b) Instead In lieu of voluntarily filing a 14
299-new cost-of-service study for approval, the generation and transmission 15
300-cooperative shall rely upon the most recent commission -approved cost 16
301-allocation. 17
302- 18
303- SECTION 14. Arkansas Code § 23 -4-1105(a), concerning the application 19
304-for modification of retail rates, is amended to read as follows: 20
305- (a) A member cooperative may propose a modification of its retail 21
306-rates and charges to incorporate the proposed change in the generation and 22
307-transmission cooperative's wholesale rates and charges filed under § 23 -4-23
308-1104 if: 24
309- (1) The member cooperative files its application for a 25
310-modification of its retail rates and charges with the Arkansas Public Service 26
311-Commission on the same within ten (10) days from the date as the generation 27
312-and transmission cooperative files its application for a modification of its 28
313-change in wholesale rates and charges under § 23 -4-1104; and 29
314- (2) The member cooperative apportions its proposed change in 30
315-rates and charges in a manner that reflects, as closely as practicable, its 31
316-cost of providing service to each class. 32
317- 33
318- SECTION 15. Arkansas Code § 23 -4-1106 is repealed. 34
319- 23-4-1106. Limitation on increase in rates. 35
320- The generation and transmission cooperative shall not increase its 36 As Engrossed: S3/11/25 SB307
321-
322- 9 03-11-2025 17:15:03 ANS209
323-
324-
325-rates and charges under this subchapter by an aggregate total of more than 1
326-eight percent (8%) during any twenty -four-month period. 2
327- 3
328- SECTION 16. Arkansas Code Title 23, Chapter 4, is amended to add an 4
329-additional subchapter to read as follows: 5
330- 6
331-Subchapter 13 — Generating Arkansas Jobs Act of 2025 7
311+ 23-4-1301. Title. 5
312+ This subchapter shall be known and may be cited as the "Generating 6
313+Arkansas Jobs Act of 2025". 7
332314 8
333- 23-4-1301. Title. 9
334- This subchapter shall be known and may be cited as the "Generating 10
335-Arkansas Jobs Act of 2025". 11
336- 12
337- 23-4-1302. Legislative findings. 13
338- The General Assembly finds that: 14
339- (1) Significant strategic investments in electric utility 15
340-infrastructure and natural gas utility infrastructure are necessary to enable 16
341-this state to: 17
342- (A) Attract and serve economic development projects across 18
343-a variety of industries; 19
344- (B) Continue reliable support for existing customers by 20
345-investing in additions of new electric utility infrastructure and natural gas 21
346-utility infrastructure to support growth; and 22
347- (C) Replace retiring electric generation facilities and 23
348-other electric utility infrastructure and natural gas utility infrastructure; 24
349- (2) Strategic investments to ensure that electric utilities have 25
350-adequate dispatchable generation resources to support reliable service for 26
351-their customers continue to be a significant element in enabling this state 27
352-to attract and serve these economic development opportunities; 28
353- (3) Strategic investments in electric utility infrastructure and 29
354-natural gas utility infrastructure are needed to support the development of 30
355-sites designated as available for economic development projects, as these 31
356-sites are critical to this state’s economic development efforts; 32
357- (4) While Arkansas's electric utilities have pursued beneficial 33
358-resource acquisition opportunities for their customers, most will need to 34
359-construct new electric generating facilities in the near future; 35
360- (5) Further strategic investments in electric utility 36 As Engrossed: S3/11/25 SB307
361-
362- 10 03-11-2025 17:15:03 ANS209
363-
364-
365-infrastructure are needed to support the license extension for existing 1
366-nuclear generation resources and ensure that electric utilities maintain 2
367-adequate dispatchable generation resources to support reliable service for 3
368-their customers; 4
369- (6) Supporting the continued evaluation of modular reactors and 5
370-advanced nuclear technologies to identify opportunities to pursue strategic 6
371-investments in those advanced nuclear technologies if it is in the public 7
372-interest in considering whether or not those advanced nuclear technologies 8
373-become technically feasible, commercially viable, and financially viable or 9
374-otherwise beneficial to customers in Arkansas; 10
375- (7) Economic development projects and the continued provision of 11
376-reliable electric utility service and reliable natural gas utility service 12
377-are essential to the future of Arkansas; 13
378- (8) Failure to act now will result in the state's missing 14
379-transformational opportunities for economic development, including new 15
380-business opportunities as well as the expansion of existing businesses that 16
381-may not be available again for many years to come; 17
382- (9) These prospective and existing businesses are prepared to 18
383-invest in electric utility infrastructure and natural gas utility 19
384-infrastructure in this state and will provide employment for Arkansas 20
385-residents that will benefit the public interest; 21
386- (10) These prospective strategic investments and the resulting 22
387-employment and workforce development opportunities for this state will 23
388-produce investment, economic growth and activity, and new state and local tax 24
389-revenue that will strengthen communities throughout this state and will 25
390-enhance the state’s overall economic vitality and well -being; 26
391- (11) Existing regulatory frameworks for electric utilities and 27
392-natural gas utilities are inadequate and were not designed to enable the 28
393-electric utilities and the natural gas utilities to respond timely and make 29
394-the required level of strategic investments in electric utility or natural 30
395-gas utility infrastructure and the associated expenses, in addition to 31
396-maintaining the financial viability necessary to support strategic 32
397-investments requiring new infrastructure to serve the residents of Arkansas; 33
398- (12) Regulatory reform is required to keep pace with the 34
399-evolving industry and help ensure that electric utilities and natural gas 35
400-utilities are financially sound and able to make the strategic investments to 36 As Engrossed: S3/11/25 SB307
401-
402- 11 03-11-2025 17:15:03 ANS209
403-
404-
405-continue providing customers safe, reliable, affordable, and sustainable 1
406-electric utility service and natural gas utility service; 2
407- (13) To support economic development in Arkansas, nothing herein 3
408-is intended to develop rates that would unreasonably shift costs from a 4
409-customer or customer class to other customers in a manner that would result 5
410-in rates that are not just and reasonable, not consistent with applicable 6
411-law, or not in the public interest; 7
412- (14) It is the policy of this state to maintain adequate 8
413-capacity of available, reliable, dispatchable, affordable, and resilient 9
414-electric generation to provide for the existing and reasonably projected 10
415-future energy consumption needs of all consumers of electricity in Arkansas; 11
416- (15) Arkansas can support a multitude of potential electric 12
417-generating resources and fuel supply resources so as to be the national 13
418-leader in the production of reliable and affordable energy in all forms that 14
419-make sense and are technically feasible, commercially viable, and financially 15
420-viable or otherwise beneficial to customers in Arkansas and the Arkansas 16
421-Public Service Commission shall ensure that generation resource s will 17
422-maintain or improve the affordability, adequacy, and reliability of the 18
423-electric grid in Arkansas; 19
424- (16) Strategic investments will support the expansion of 20
425-Arkansas’s natural gas production capacity that will lead to economic growth 21
426-and employment opportunities in that business sector and will support the 22
427-continued development and use of Arkansas’s natural resources; and 23
428- (17) Strategic investments will enhance the capacity, 24
429-reliability, and resiliency of Arkansas’s electric and natural gas utility 25
430-infrastructure, which will support the reliability and resiliency of 26
431-Arkansas’s overall utility infrastructure and reliable electric and natural 27
432-gas utility service during extreme temperatures and other weather conditions 28
433-and during other periods of high demand and usage. 29
434- 30
435- 23-4-1303. Definitions. 31
436- As used in this subchapter: 32
437- (1)(A) "Construction work in progress" means: 33
438- (i) Materials costs; 34
439- (ii) Labor costs; 35
440- (iii) Labor costs adders; 36 As Engrossed: S3/11/25 SB307
441-
442- 12 03-11-2025 17:15:03 ANS209
443-
444-
445- (iv) Costs associated with third -party vendors and 1
446-consultants; 2
447- (v) Costs associated with procurement of real 3
448-property rights; 4
449- (vi) Costs associated with securing all necessary 5
450-approvals; 6
451- (vii) Taxes; 7
452- (viii) Tax gross-up charges; 8
453- (ix) Capital suspense charges; and 9
454- (x) Overheads for any strategic investments that are 10
455-not yet complete or in service. 11
456- (B) "Construction work in progress" includes costs that 12
457-are: 13
458- (i) Recorded under the requirements of the uniform 14
459-system of accounts adopted by the Arkansas Public Service Commission by rule 15
460-and any applicable accounting guidance issued by the Federal Energy 16
461-Regulatory Commission that are adopted by the Arkansas Public Service 17
462-Commission by rule; and 18
463- (ii) In conformance with generally accepted 19
464-accounting principles; 20
465- (2) "Electric distribution cooperative" means a rural electric 21
466-cooperative that sells electricity at retail and is a member of an electric 22
467-generation and transmission cooperative; 23
468- (3) "Electric generation and transmission cooperative" means a 24
469-rural electric cooperative formed under the Electric Cooperative Corporation 25
470-Act, § 23-18-301 et seq., that: 26
471- (A) Does not have a certificated service territory; and 27
472- (B) Exclusively sells electricity at wholesale; 28
473- (4) "Investor-owned electric utility" means a public utility 29
474-that is engaged in generating, transmitting, delivering, or furnishing 30
475-electricity to or for the public for compensation and that is owned by 31
476-investors and is not a cooperative; 32
477- (5) "Investor-owned natural gas utility" means a public utility 33
478-that is engaged in the production, transport, delivery, or furnishing of 34
479-natural gas to or for the public for compensation and that is owned by 35
480-investors and is not a cooperative; 36 As Engrossed: S3/11/25 SB307
481-
482- 13 03-11-2025 17:15:03 ANS209
483-
484-
485- (6) "Major utility facility" means the same as defined in § 23 -1
486-18-503; 2
487- (7) "Public utility" means the same as defined in § 23 -1-101; 3
488- (8) "Rider" means a rate schedule approved by the Arkansas 4
489-Public Service Commission to recover one (1) or more strategic investments 5
490-and the recovery costs that are not included in other rates or rate schedules 6
491-approved by the Arkansas Public Service Commission; 7
492- (9) "Rider test period" means a historical test period under § 8
493-23-4-406 which shall include adjustments identified by the electric utility 9
494-or the natural gas utility to a historical test period to reflect the effects 10
495-on an annualized basis of a change in circumstances which may occur within 11
496-twelve (12) months after the end of the historical test year where the 12
497-changes are reasonably known and measurable; 13
498- (10)(A) "Strategic investments" means investments, either 14
499-construction or purchase, and associated operating expenses made by a 15
500-electric public utility or natural gas public utility, and approved by the 16
501-Arkansas Public Service Commission under § 23 -3-201 et seq., the Utility 17
502-Facility Environmental and Economic Protection Act, § 23 -18-501 et seq., or a 18
503-notice under § 23-18-104 or as otherwise stated in subdivision (10)(B) of 19
504-this section, to: 20
505- (i) Support growth and economic development in this 21
506-state, including supporting the development of sites designated as available 22
507-for economic development; 23
508- (ii) Maintain and improve the provision of reliable 24
509-electric utility service and natural gas utility service to new and existing 25
510-customers in this state; 26
511- (iii) Support the license extension for existing 27
512-nuclear generation resources; and 28
513- (iv) Ensure that electric utilities maintain 29
514-adequate dispatchable generation resources to support reliable service for 30
515-their customers that is consistent with the resource adequacy requirements 31
516-established by the applicable load balancing authority. 32
517- (B) "Strategic investments" includes without limitation 33
518-investments and associated operating expenses associated with: 34
519- (i) A new electric generating facility, an 35
520-associated transportation and storage facility for fuel, and other facilities 36 As Engrossed: S3/11/25 SB307
521-
522- 14 03-11-2025 17:15:03 ANS209
523-
524-
525-designed for or capable of operation at a capacity of one hundred megawatts 1
526-(100 MW) or more for a single facility; 2
527- (ii) An energy storage facility designed for or 3
528-capable of operating at a capacity of fifty megawatts (50 MW) or more for a 4
529-single facility or a combination of energy storage facilities and an electric 5
530-generating facility designed for or capable of operation at a combined 6
531-capacity of one hundred megawatts (100 MW) or more for a single facility to 7
532-provide service to new and existing customers located in Arkansas; 8
533- (iii) Upgrades, expansions, or fuel conversions of 9
534-existing electric generating facilities and associated transportation and 10
535-storage facilities for fuel and other facilities, energy storage facilities, 11
536-or any combination thereof to sustain or increase capacity and, therefore, 12
537-improve reliability, to provide service to new and existing customers in 13
538-Arkansas; 14
539- (iv) New electric transmission facilities, including 15
540-substations with a design voltage of more than one hundred kilovolts (100 kV) 16
541-or more to provide service to new and existing customers located in Arkansas; 17
542- (v) Upgrades or expansions of existing electric 18
543-transmission facilities, including substations with a design voltage of more 19
544-than one hundred kilovolts (100 kV) or more to increase capacity, therefore, 20
545-improve reliability to provide service to new and existing customers located 21
546-in Arkansas; 22
547- (vi) New natural gas transmission lines or high 23
548-pressure distribution lines with a maximum allowable operating pressure of 24
549-one hundred twenty-five pounds per square inch gauge (125 PSIG) or greater 25
550-and natural gas storage facilities; 26
551- (vii) Upgrades or expansions of existing natural gas 27
552-transmission lines, high pressure distribution lines with a maximum allowable 28
553-operating pressure of one hundred twenty -five pounds per square inch gauge 29
554-(125 PSIG) or greater and natural gas storage facilities; and 30
555- (viii) Feasibility studies of strategic investments 31
556-and advanced energy technologies, as defined in § 23 -4-1308, including site 32
557-studies and due diligence to determine construction estimates. 33
558- (C)(i) A renewable resource strategic investment shall be 34
559-eligible for recovery through the rider under this section, if the Arkansas 35
560-Public Service Commission finds in a proceeding under § 23 -3-201 et seq., § 36 As Engrossed: S3/11/25 SB307
561-
562- 15 03-11-2025 17:15:03 ANS209
563-
564-
565-23-18-104, the Utility Facility Environmental and Economic Protection Act, § 1
566-23-18-501 et seq., or any other proceeding for approval of a renewable 2
567-resource strategic investment based on substantial evidence, that a renewable 3
568-resource strategic investment results in benefits to customers and the 4
569-electric utility would continue to have adequate dispatchable resources to 5
570-provide reliable service to its customers consistent with the resource 6
571-adequacy requirements of the load balancing authority with the addition of 7
572-the renewable strategic investment. 8
573- (ii) As used in subdivision (10)(C)(i) of this 9
574-section, "benefits" shall include without limitation: 10
575- (a) The cost of the renewable strategic 11
576-investment is reasonable and prudently incurred; 12
577- (b) The renewable resource strategic 13
578-investment is necessary to supplement or replace the electric utility's 14
579-existing generation resources; 15
580- (c) The renewable resource strategic 16
581-investment provides energy and capacity benefits; 17
582- (d) The renewable resource provides generation 18
583-resource mix diversification and fuel source mix benefits and risk mitigation 19
584-benefits; 20
585- (e) The renewable resource strategic 21
586-investment supports efforts to attract or retain economic development 22
587-opportunities for this state; or 23
588- (f) A customer or customers contract to pay 24
589-all or a portion of the cost of the strategic investment as a resource 25
590-through a special rate contract, a renewable rate schedule, a contribution in 26
591-aid of construction, or other form of payment. 27
592- (D) Wind resources located in Arkansas are not eligible 28
593-for recovery through a rider under this subchapter ; and 29
594- (11) "Times interest earned ratio" means earnings before 30
595-interest and taxes divided by the total interest payable on bonds and other 31
596-debt. 32
597- 33
598- 23-4-1304. Authorization to recover strategic investments through 34
599-rider — Investor-owned electric utility and investor -owned natural gas 35
600-utility. 36 As Engrossed: S3/11/25 SB307
601-
602- 16 03-11-2025 17:15:03 ANS209
603-
604-
605- (a) An investor-owned electric utility or an investor -owned natural 1
606-gas utility may use a rider to recover strategic investments that are not 2
607-otherwise recoverable through rates that were previously approved by the 3
608-Arkansas Public Service Commission or charged by the investor -owned electric 4
609-utility or the investor -owned natural gas utility after: 5
610- (1) A commission order approving an application under § 23 -3-201 6
611-et seq. or the Utility Facility Environmental and Economic Protection Act, § 7
612-23-18-501 et seq., or a notice under § 23 -18-104; or 8
613- (2) A commission order approving any other application related 9
614-to the siting or prudence of the decision to invest in the new strategic 10
315+ 23-4-1302. Legislative findings. 9
316+ The General Assembly finds that: 10
317+ (1) Significant strategic investments in electric utility 11
318+infrastructure and natural gas utility infrastructure are necessary to enable 12
319+this state to: 13
320+ (A) Attract and serve economic development projects across 14
321+a variety of industries; 15
322+ (B) Continue reliable support for existing customers by 16
323+investing in additions of new electric utility infrastructure and natural gas 17
324+utility infrastructure to support growth; and 18
325+ (C) Replace retiring electric generation facilities and 19
326+other electric utility infrastructure and natural gas utility infrastructure; 20
327+ (2) Strategic investments to ensure that electric utilities have 21
328+adequate dispatchable generation resources to support reliable service for 22
329+their customers continue to be a significant element in enabling this state 23
330+to attract and serve these economic development opportunities; 24
331+ (3) Strategic investments in electric utility infrastructure and 25
332+natural gas utility infrastructure are needed to support the development of 26
333+sites designated as available for economic development projects, as these 27
334+sites are critical to this state’s economic development efforts; 28
335+ (4) While Arkansas's electric utilities have pursued beneficial 29
336+resource acquisition opportunities for their customers, most will need to 30
337+construct new electric generating facilities in the near future; 31
338+ (5) Further strategic investments in electric utility 32
339+infrastructure are needed to support the license extension for existing 33
340+nuclear generation resources and ensure that electric utilities maintain 34
341+adequate dispatchable generation resources to support reliable service for 35
342+their customers; 36 SB307
343+
344+ 10 02/25/2025 4:06:48 PM ANS209
345+ (6) Supporting the continued evaluation of modular reactors and 1
346+advanced nuclear technologies to identify opportunities to pursue strategic 2
347+investments in those advanced nuclear technologies if it is in the public 3
348+interest in considering whether or not those advanced nuclear technologies 4
349+become technically feasible, commercially viable, and financially viable or 5
350+otherwise beneficial to customers in Arkansas; 6
351+ (7) Economic development projects and the continued provision of 7
352+reliable electric utility service and reliable natural gas utility service 8
353+are essential to the future of Arkansas; 9
354+ (8) Failure to act now will result in the state's missing 10
355+transformational opportunities for economic development, including new 11
356+business opportunities as well as the expansion of existing businesses that 12
357+may not be available again for many years to come; 13
358+ (9) These prospective and existing businesses are prepared to 14
359+invest in electric utility infrastructure and natural gas utility 15
360+infrastructure in this state and will provide employment for Arkansas 16
361+residents that will benefit the public interest; 17
362+ (10) These prospective strategic investments and the resulting 18
363+employment and workforce development opportunities for this state will 19
364+produce investment, economic growth and activity, and new state and local tax 20
365+revenue that will strengthen communities throughout this state and will 21
366+enhance the state’s overall economic vitality and well -being; 22
367+ (11) Existing regulatory frameworks for electric utilities and 23
368+natural gas utilities are inadequate and were not designed to enable the 24
369+electric utilities and the natural gas utilities to respond timely and make 25
370+the required level of strategic investments in electric utility or natural 26
371+gas utility infrastructure and the associated expenses, in addition to 27
372+maintaining the financial viability necessary to support strategic 28
373+investments requiring new infrastructure to serve the residents of Arkansas; 29
374+ (12) Regulatory reform is required to keep pace with the 30
375+evolving industry and help ensure that electric utilities and natural gas 31
376+utilities are financially sound and able to make the strategic investments to 32
377+continue providing customers safe, reliable, affordable, and sustainable 33
378+electric utility service and natural gas utility service; and 34
379+ (13) To support economic development in Arkansas, nothing herein 35
380+is intended to develop rates that would unreasonably shift costs from a 36 SB307
381+
382+ 11 02/25/2025 4:06:48 PM ANS209
383+customer or customer class to other customers in a manner that would result 1
384+in rates that are not just and reasonable, not consistent with applicable 2
385+law, or not in the public interest. 3
386+ 4
387+ 23-4-1303. Definitions. 5
388+ As used in this subchapter: 6
389+ (1)(A) "Construction work in progress" means: 7
390+ (i) Materials costs; 8
391+ (ii) Labor costs; 9
392+ (iii) Labor costs adders; 10
393+ (iv) Allowance for funds used during construction; 11
394+ (v) Costs associated with third -party vendors and 12
395+consultants; 13
396+ (vi) Costs associated with procurement of real 14
397+property rights; 15
398+ (vii) Costs associated with securing all necessary 16
399+approvals; 17
400+ (viii) Taxes; 18
401+ (ix) Tax gross-up charges; 19
402+ (x) Capital suspense charges; and 20
403+ (xi) Overheads for any strategic investments that 21
404+are not yet complete or in service. 22
405+ (B) "Construction work in progress" includes costs that 23
406+are: 24
407+ (i) Recorded under the requirements of the uniform 25
408+system of accounts adopted by the Arkansas Public Service Commission by rule 26
409+and any applicable accounting guidance issued by the Federal Energy 27
410+Regulatory Commission that are adopted by the Arkansas Public Service 28
411+Commission by rule; and 29
412+ (ii) In conformance with generally accepted 30
413+accounting principles; 31
414+ (2) "Electric distribution cooperative" means a rural electric 32
415+cooperative that sells electricity at retail and is a member of an electric 33
416+generation and transmission cooperative; 34
417+ (3) "Electric generation and transmission cooperative" means a 35
418+rural electric cooperative formed under the Electric Cooperative Corporation 36 SB307
419+
420+ 12 02/25/2025 4:06:48 PM ANS209
421+Act, § 23-18-301 et seq., that: 1
422+ (A) Does not have a certificated service territory; and 2
423+ (B) Exclusively sells electricity at wholesale; 3
424+ (4) "Investor-owned electric utility" means a public utility 4
425+that is engaged in generating, transmitting, delivering, or furnishing 5
426+electricity to or for the public for compensation and that is owned by 6
427+investors and is not a cooperative; 7
428+ (5) "Investor-owned natural gas utility" means a public utility 8
429+that is engaged in the production, transport, delivery, or furnishing of 9
430+natural gas to or for the public for compensation and that is owned by 10
431+investors and is not a cooperative; 11
432+ (6) "Major utility facility" means the same as defined in § 23 -12
433+18-503; 13
434+ (7) "Public utility" means the same as defined in § 23 -1-101; 14
435+ (8) "Rider" means a rate schedule approved by the Arkansas 15
436+Public Service Commission to recover one (1) or more strategic investments 16
437+and the recovery costs that are not included in other rates or rate schedules 17
438+approved by the Arkansas Public Service Commission; 18
439+ (9) "Rider test period" means a historical test period under § 19
440+23-4-406 which shall include adjustments identified by the electric utility 20
441+or the natural gas utility to a historical test period to reflect the effects 21
442+on an annualized basis of a change in circumstances which may occur within 22
443+twelve (12) months after the end of the historical test year where the 23
444+changes are reasonably known and measurable; 24
445+ (10)(A) "Strategic investments" means investments, either 25
446+construction or purchase, and associated operating expenses made by a 26
447+electric public utility or natural gas public utility to: 27
448+ (i) Support growth and economic development in this 28
449+state, including supporting the development of sites designated as available 29
450+for economic development; 30
451+ (ii) Maintain and improve the provision of reliable 31
452+electric utility service and natural gas utility service to new and existing 32
453+customers in this state; 33
454+ (iii) Support the license extension for existing 34
455+nuclear generation resources; and 35
456+ (iv) Ensure that electric utilities maintain 36 SB307
457+
458+ 13 02/25/2025 4:06:48 PM ANS209
459+adequate dispatchable generation resources to support reliable service for 1
460+their customers that is consistent with the resource adequacy requirements 2
461+established by the applicable load balancing authority. 3
462+ (B) "Strategic investments" includes without limitation 4
463+investments and associated operating expenses associated with: 5
464+ (i) A new electric generating facility, an 6
465+associated transportation and storage facility for fuel, and other facilities 7
466+designed for or capable of operation at a capacity of one hundred megawatts 8
467+(100 MW) or more for a single facility; 9
468+ (ii) An energy storage facility designed for or 10
469+capable of operating at a capacity of fifty megawatts (50 MW) or more for a 11
470+single facility or a combination of energy storage facilities and an electric 12
471+generating facility designed for or capable of operation at a combined 13
472+capacity of one hundred megawatts (100 MW) or more for a single facility to 14
473+provide service to new and existing customers located in Arkansas; 15
474+ (iii) Upgrades, expansions, or fuel conversions of 16
475+existing electric generating facilities and associated transportation and 17
476+storage facilities for fuel and other facilities, energy storage facilities, 18
477+or any combination thereof to sustain or increase capacity and, therefore, 19
478+improve reliability, to provide service to new and existing customers in 20
479+Arkansas; 21
480+ (iv) New electric transmission facilities, including 22
481+substations with a design voltage of more than one hundred kilovolts (100 kV) 23
482+or more to provide service to new and existing customers located in Arkansas; 24
483+ (v) Upgrades or expansions of existing electric 25
484+transmission facilities, including substations with a design voltage of more 26
485+than one hundred kilovolts (100 kV) or more to increase capacity, therefore, 27
486+improve reliability to provide service to new and existing customers located 28
487+in Arkansas; 29
488+ (vi) New natural gas transmission lines or high 30
489+pressure distribution lines with a maximum allowable operating pressure of 31
490+one hundred twenty-five pounds per square inch gauge (125 PSIG) or greater, 32
491+facilities designed for or capable of transporting gas at pressures of more 33
492+than fifty pounds per square inch (50 psi), natural gas storage facilities, 34
493+and associated facilities to provide service to new and existing customers 35
494+located in Arkansas; 36 SB307
495+
496+ 14 02/25/2025 4:06:48 PM ANS209
497+ (vii) Upgrades or expansions of existing natural gas 1
498+transmission lines, high pressure distribution lines with a maximum allowable 2
499+operating pressure of one hundred twenty -five pounds per square inch gauge 3
500+(125 PSIG) or greater, facilities designed for or capable of transporting gas 4
501+at pressures of more than fifty pounds per square inch (50 psi), natural gas 5
502+storage facilities, and associated facilities to provide service to new and 6
503+existing customers located in Arkansas; and 7
504+ (viii) Feasibility studies of strategic investments 8
505+and advanced energy technologies, as defined in § 23 -4-1308, including site 9
506+studies and due diligence to determine construction estimates. 10
507+ (C)(i) A renewable resource strategic investment shall be 11
508+eligible for recovery through the rider under this section, if the Arkansas 12
509+Public Service Commission finds in a proceeding under § 23 -3-201 et seq., § 13
510+23-18-104, the Utility Facility Environmental and Economic Protection Act, § 14
511+23-18-501 et seq., or any other proceeding for approval of a renewable 15
512+resource strategic investment based on substantial evidence, that a renewable 16
513+resource strategic investment results in benefits to customers and the 17
514+electric utility would continue to have adequate dispatchable resources to 18
515+provide reliable service to its customers consistent with the resource 19
516+adequacy requirements of the load balancing authority with the addition of 20
517+the renewable strategic investment. 21
518+ (ii) As used in subdivision (10)(C)(i) of this 22
519+section, "benefits" shall include without limitation: 23
520+ (a) The cost of the renewable strategic 24
521+investment is reasonable and prudently incurred; 25
522+ (b) The renewable resource strategic 26
523+investment is necessary to supplement or replace the electric utility's 27
524+existing generation resources; 28
525+ (c) The renewable resource strategic 29
526+investment provides energy and capacity benefits; 30
527+ (d) The renewable resource provides generation 31
528+resource mix diversification and fuel source mix benefits and risk mitigation 32
529+benefits; 33
530+ (e) The renewable resource strategic 34
531+investment supports efforts to attract or retain economic development 35
532+opportunities for this state; or 36 SB307
533+
534+ 15 02/25/2025 4:06:48 PM ANS209
535+ (f) A customer or customers contract to pay 1
536+all or a portion of the cost of the strategic investment as a resource 2
537+through a special rate contract, a renewable rate schedule, a contribution in 3
538+aid of construction, or other form of payment. 4
539+ (D) Wind resources located in Arkansas are not eligible 5
540+for recovery through a rider under this subchapter ; and 6
541+ (11) "Times interest earned ratio" means earnings before 7
542+interest and taxes divided by the total interest payable on bonds and other 8
543+debt. 9
544+ 10
545+ 23-4-1304. Authorization to recover strategic investments through 11
546+rider — Investor-owned electric utility and investor -owned natural gas 12
547+utility. 13
548+ (a) An investor-owned electric utility or an investor -owned natural 14
549+gas utility may use a rider to recover strategic investments that are not 15
550+otherwise recoverable through rates that were previously approved by the 16
551+Arkansas Public Service Commission or charged by the investor -owned electric 17
552+utility or the investor -owned natural gas utility after: 18
553+ (1) A commission order approving an application under § 23 -3-201 19
554+et seq. or the Utility Facility Environmental and Economic Protection Act, § 20
555+23-18-501 et seq., or a notice under § 23 -18-104; or 21
556+ (2) A commission order approving any other application related 22
557+to the sighting or prudence of the decision to invest in the new strategic 23
558+investments. 24
559+ (b)(1) An investor-owned electric utility or an investor -owned natural 25
560+gas utility may elect to file with the commission a rider to recover 26
561+strategic investments that are not otherwise recoverable in rates previously 27
562+approved by the commission or charged by the investor -owned electric utility 28
563+or the investor-owned natural gas utility. 29
564+ (2) The investor-owned electric utility or the investor -owned 30
565+natural gas utility shall provide notice to the Attorney General of the 31
566+filing of the rider by the investor -owned electric utility or the investor -32
567+owned natural gas utility on the date the investor -owned electric utility or 33
568+the investor-owned natural gas utility files the rider with the commission. 34
569+ (c)(1) An investor-owned electric utility or an investor -owned natural 35
570+gas utility may select the date of the first annual filing update, with all 36 SB307
571+
572+ 16 02/25/2025 4:06:48 PM ANS209
573+subsequent updates to be filed on or by the same day annually as the first 1
574+filing update. 2
575+ (2) An investor-owned electric utility or an investor -owned 3
576+natural gas utility shall provide notice to the Attorney General of the 4
577+filing of the rider on the date the investor -owned electric utility or the 5
578+investor-owned natural gas utility files each annual update to the rider with 6
579+the commission. 7
580+ (d) For a rider under this subchapter, an investor -owned electric 8
581+utility or an investor -owned natural gas utility shall use a rider test 9
582+period. 10
583+ (e)(1) Upon receipt of an investor -owned electric utility's or an 11
584+investor-owned natural gas utility’s filing to implement the rider rate 12
585+schedule and each annual update under this subchapter, the commission shall 13
586+issue an order approving the rider rate schedule and each annual update to 14
587+recover strategic investments under this subchapter if the commission 15
588+determines that the investor -owned electric utility's or the investor -owned 16
589+natural gas utility’s application complies with the provisions of this 17
590+section and therefore is in the public interest. 18
591+ (2)(A) Unless the commission determines that approving the 19
592+investor-owned electric utility's or the investor -owned natural gas utility’s 20
593+application for the rider and each annual update does not comply with this 21
594+subchapter, the commission shall enter an order within sixty (60) calendar 22
595+days following the date of the investor -owned electric utility's or the 23
596+investor-owned natural gas utility’s filing. 24
597+ (B)(i) If the commission determines that approving an 25
598+application for approval of a rider rate schedule or annual update under this 26
599+subchapter is not in the public interest, the commission shall enter an 27
600+order. 28
601+ (ii) In the order entered by the commission under 29
602+subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 30
603+ (a) The basis for the commission's findings; 31
604+and 32
605+ (b) Any evidence or other information 33
606+submitted by the investor -owned electric utility or the investor -owned 34
607+natural gas utility as part of its application that the commission deems to 35
608+be insufficient. 36 SB307
609+
610+ 17 02/25/2025 4:06:48 PM ANS209
611+ (C) Each annual update shall include, for the initial 1
612+rider test year, the construction work in progress costs that will ultimately 2
613+be capitalized on which the utility will earn a return, amounts that would 3
614+otherwise be recorded as allowance for funds used during construction, and 4
615+any expenses associated with the construction work in progress that will not 5
616+be capitalized. 6
617+ (D) The commission shall verify the amounts included in 7
618+each annual update reflect the amounts authorized for recovery under the 8
619+Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 9
620+ (E) The commission shall complete its review of each 10
621+annual update filing and issue its order within sixty (60) days following the 11
622+date of the annual update filing. 12
623+ (F)(i) If the investor -owned electric utility or the 13
624+investor-owned natural gas utility submits an amended filing remedying the 14
625+areas of noncompliance identified by the commission in its order, the 15
626+commission shall enter an order approving the application within ten (10) 16
627+calendar days following the date of the amended filing unless the commission 17
628+finds that the filing does not comply with the provisions of this subchapter. 18
629+ (ii) If the commission finds that the amended filing 19
630+does not remedy the areas of noncompliance, the commission shall enter an 20
631+order denying the application. 21
632+ (iii) In the order issued under subdivision 22
633+(e)(2)(F)(ii) of this section, the commission shall discuss: 23
634+ (a) The basis for the commission's findings; 24
635+and 25
636+ (b) Any evidence or other information 26
637+submitted by the investor -owned electric utility or the investor -owned 27
638+natural gas utility as part of its notice or application that the commission 28
639+deems to be insufficient. 29
640+ (G) The process outlined in subdivision (e)(2)(B) and (F) 30
641+of this section may continue until the commission finds that: 31
642+ (i) The investor-owned electric utility's or the 32
643+investor-owned natural gas utility's application complies with this 33
644+subchapter; or 34
645+ (ii) The investor-owned electric utility or the 35
646+investor-owned natural gas utility withdraws its application or appeals the 36 SB307
647+
648+ 18 02/25/2025 4:06:48 PM ANS209
649+commission's decision. 1
650+ (H) If the commission fails to issue its order within the 2
651+timeframes stated in this section, the investor -owned electric utility's 3
652+filing or the investor -owned natural gas utility’s filing shall become 4
653+effective by operation of law subject to completion of the commission's 5
654+review under this subchapter. 6
655+ (f)(1) At the election of the investor -owned electric utility or the 7
656+investor-owned natural gas utility, strategic investments shall be recovered 8
657+through the rider, separate from the investor -owned electric utility's or the 9
658+investor-owned natural gas utility’s formula rate plan implemented under the 10
659+Formula Rate Review Act, § 23 -4-1201 et seq., any other rider, or otherwise 11
660+as part of the investor -owned electric utility's or the investor -owned 12
661+natural gas utility's rates approved by the commission. 13
662+ (2) If elected by an investor -owned electric utility or an 14
663+investor-owned natural gas utility, the rider shall remain in effect under 15
664+this subchapter until the investor -owned electric utility or the investor -16
665+owned natural gas utility decides to withdraw the rider with respect to 17
666+future cost recovery for strategic investments to be made after the date of 18
667+the withdrawal. 19
668+ (g) For the purposes of calculating rates to recover the costs of 20
669+strategic investments, including rates implemented through an individual 21
670+customer contract, the commission shall ensure that the rates charged to 22
671+customers recover the costs of strategic investments in a manner that is 23
672+consistent with applicable law and in the public interest. 24
673+ (h) An amount collected through the rider under this subchapter shall 25
674+be collected subject to refunds pending the completion of the commission's 26
675+review under this subchapter. 27
676+ (i) The rider elected by an investor -owned electric utility or an 28
677+investor-owned natural gas utility under this subchapter to recover strategic 29
678+investments is a revenue requirement rider and shall provide return on 30
679+construction work in progress plus operating expenses during construction and 31
680+return on rate base plus operating expenses once complete and in service. 32
681+ (j)(1) An investor-owned electric utility or an investor -owned natural 33
682+gas utility shall not accrue an allowance for funds used during construction 34
683+for strategic investments with costs recovered through the rider. 35
684+ (2) Instead, the commission shall authorize an investor -owned 36 SB307
685+
686+ 19 02/25/2025 4:06:48 PM ANS209
687+electric utility or an investor -owned natural gas utility to earn a return 1
688+through the rider under this subchapter on any construction work in progress, 2
689+costs that will ultimately be capitalized or recorded as an allowance for 3
690+funds used during construction when the strategic investments go into 4
691+service. 5
692+ (k) The commission shall authorize an investor -owned electric utility 6
693+or an investor-owned natural gas utility to recover through the rider filed 7
694+under this subchapter any expenses associated with the construction of 8
695+strategic investments that will not be capitalized. 9
696+ (l) In calculating construction work in progress, including actual 10
697+costs and any projections, the investor -owned electric utility or the 11
698+investor-owned natural gas utility shall base all amounts on year -end 12
699+information not subject to averaging beginning -of-year or end-of-year 13
700+balances. 14
701+ (m)(1)(A) During the construction of strategic investments included in 15
702+the rider, an investor -owned electric utility or an investor -owned natural 16
703+gas utility shall include in the capital structure only short -term debt, 17
704+long-term debt, and equity. 18
705+ (B) The investor-owned electric utility or the investor -19
706+owned natural gas utility shall base the balances of those items under 20
707+subdivision (m)(1)(A) of this section on the investor -owned electric 21
708+utility’s or the investor -owned natural gas utility’s actual capital 22
709+structure with a maximum equity percentage of fifty percent (50%). 23
710+ (C) During the construction of strategic investments, the 24
711+commission shall not require an investor -owned electric utility or an 25
712+investor-owned natural gas utility that is electing to utilize a rider under 26
713+this subchapter to include in the capital structure of the rider other items, 27
714+including current, accrued, or other liabilities or accumulated deferred 28
715+income taxes. 29
716+ (D) For the purposes of the rider, the cost of debt used 30
717+in calculating the cost of capital shall be the cost of short -term debt and 31
718+the cost of long-term debt approved in the investor -owned electric utility’s 32
719+or the investor-owned natural gas utility’s most recent general rate case 33
720+proceeding or formula rate plan annual filing. 34
721+ (2) For any strategic investment included in the rider under 35
722+this section that is complete and in service, the investor -owned electric 36 SB307
723+
724+ 20 02/25/2025 4:06:48 PM ANS209
725+utility or the investor -owned natural gas utility shall use the capital 1
726+structure and overall rate of return that was approved in the investor -owned 2
727+electric utility’s or the investor -owned natural gas utility's most recent 3
728+general rate case proceeding or annual formula rate plan filing. 4
729+ (n) For the purpose of the rider, the return on equity used in 5
730+calculating the cost of capital shall be set at the return on equity approved 6
731+in the investor-owned electric utility's or the investor -owned natural gas 7
732+utility’s most recent general rate case proceeding. 8
733+ (o)(1) On the strategic investments' being complete and in service, 9
734+the commission shall authorize the investor -owned electric utility or the 10
735+investor-owned natural gas utility to earn a fair and reasonable return 11
736+through the rider on any capitalized costs for the strategic investments. 12
737+ (2) Once the strategic investments go into service, the 13
738+commission shall authorize the investor -owned electric utility or the 14
739+investor-owned natural gas utility to recover through the rider any on -going 15
740+expenses associated with the strategic investments. 16
741+ (3) In the investor -owned electric utility's or the investor -17
742+owned natural gas utility’s next general rate case proceeding, the commission 18
743+shall allow the investor -owned electric utility or the investor -owned natural 19
744+gas utility to include any capitalized amounts and associated expenses for 20
745+completed strategic investments in its base rates. 21
746+ (4)(A) In the investor -owned electric utility's or the investor -22
747+owned natural gas utility's next general rate case proceeding, the investor -23
748+owned electric utility or the investor -owned natural gas utility shall move 24
749+any amounts for any completed strategic investments from the rider into base 25
750+rates. 26
751+ (B) The investor-owned electric utility or the investor -27
752+owned natural gas utility shall continue to recover through the rider 28
753+implemented under this subchapter the costs and expenses associated with any 29
754+strategic investments that are not complete and in service. 30
755+ (p) The revenues from the rider shall be included in calculating the 31
756+maximum amount of revenue increase or decrease under § 23 -4-1207(d) for any 32
757+formula rate plan implemented under the Formula Rate Review Act, § 23 -4-1201 33
758+et seq., but shall otherwise be excluded from the revenues included in a 34
759+formula rate plan under the Formula Rate Review Act, § 23 -4-1201 et seq., for 35
760+an investor-owned electric utility or an investor -owned natural gas utility. 36 SB307
761+
762+ 21 02/25/2025 4:06:48 PM ANS209
763+ (q)(1) For any excess accumulated deferred income tax associated with 1
764+strategic investments, the commission shall: 2
765+ (A) Authorize the investor -owned electric utility or 3
766+investor-owned natural gas utility to apply the excess deferred income taxes 4
767+to offset the investor -owned electric utility's or investor -owned natural gas 5
768+utility’s rate base used in calculating its rates; or 6
769+ (B) Apply the excess deferred income taxes as a credit to 7
770+customer bills. 8
771+ (2) The commission shall determine which form and the timing of 9
772+applying the accumulated deferred income taxes under subsection (q) of this 10
773+section is in the public interest. 11
774+ (r) The commission shall authorize the investor -owned electric utility 12
775+or the investor-owned natural gas utility to monetize or apply any tax 13
776+credits or other tax incentives, including without limitation investment tax 14
777+credits and production tax credits, where possible to reduce the cost of 15
778+constructing or acquiring any strategic investments to benefit customers of 16
779+an investor-owned electric utility or an investor -owned natural gas utility. 17
780+ (s)(1) The investor -owned electric utility or the investor -owned 18
781+natural gas utility shall evaluate opportunities to seek federal funds and 19
782+loan programs to reduce the cost of constructing, acquiring, and financing 20
783+strategic investments if possible, appropriate, and available to reduce the 21
784+cost of constructing or acquiring any strategic investments. 22
785+ (2) If an investor-owned electric utility or an investor -owned 23
786+natural gas utility requests and receives federal funding to support 24
787+constructing or acquiring strategic investments, the applicable amount of 25
788+federal funding shall be deducted from the value of the strategic investments 26
789+that are capitalized and recoverable through rates charged to customers of an 27
790+investor-owned electric utility or an investor -owned natural gas utility. 28
791+ (t)(1) If an investor -owned electric utility or an investor -owned 29
792+natural gas utility, with rates regulated under the Formula Rate Review Act, 30
793+§ 23-4-1201 et seq., has a return on equity above the return on the investor -31
794+owned electric utility's or the investor -owned natural gas utility’s most 32
795+recent general rate case proceeding, plus five -tenths percent (0.5%), and 33
796+would otherwise be required to provide credits to a customer's bill, the 34
797+investor-owned electric utility or the investor -owned natural gas utility 35
798+shall not be required to adjust rates and provide credits to customers that 36 SB307
799+
800+ 22 02/25/2025 4:06:48 PM ANS209
801+may otherwise be required under § 23 -4-1207(b) if the investor -owned electric 1
802+utility or the investor -owned natural gas utility can demonstrate that the 2
803+investor-owned electric utility or the investor -owned natural gas utility has 3
804+approved strategic investments under construction or can provide substantial 4
805+evidence that it has plans to request commission approval within the next 5
806+twenty-four (24) months to make strategic investments that would qualify for 6
807+recovery through the rider in an amount equal to or greater than the amount 7
808+above the return on equity approved in the investor -owned electric utility's 8
809+or the investor-owned natural gas utility’s most recent general rate case 9
810+proceeding, plus five -tenths percent (0.5%). 10
811+ (2) For an investor -owned electric utility or an investor -owned 11
812+natural gas utility, with rates regulated under the Formula Rate Review Act, 12
813+§ 23-4-1201 et seq., the commission shall not require a reduction of rates to 13
814+the investor-owned electric utility's or the investor -owned natural gas 14
815+utility’s authorized rate of return, or reduce the investor -owned electric 15
816+utility's or the investor -owned natural gas utility’s target rate of return 16
817+under § 23-4-1207(b) for any formula rate plan mechanism under the Formula 17
818+Rate Review Act, § 23 -4-1201 et seq., if an investor -owned electric utility 18
819+or an investor-owned natural gas utility can demonstrate that it has approved 19
820+strategic investments or can provide substantial evidence that it has plans 20
821+to seek commission approval within the next twenty -four (24) months to make 21
822+strategic investments in an amount equal to or greater than the level of 22
823+earnings above the investor -owned electric utility's or the investor -owned 23
824+natural gas utility’s authorized rate of return or the investor -owned 24
825+electric utility's or the investor -owned natural gas utility’s target rate of 25
826+return under § 23-4-1207(b) for any formula rate plan mechanism implemented 26
827+under the Formula Rate Review Act, § 23 -4-1201 et seq. 27
828+ (3)(A) The investor -owned electric utility or the investor -owned 28
829+natural gas utility shall first apply any amounts identified in subdivisions 29
830+(t)(1) and (2) of this section to approved strategic investments under 30
831+construction. 31
832+ (B)(i) The commission may authorize the investor -owned 32
833+electric utility or the investor -owned natural gas utility to record any 33
834+amounts identified in subdivisions (t)(1) and (2) of this section associated 34
835+with any projects for which it has provided substantial evidence that it has 35
836+plans to request commission approval during the next twenty -four (24) months 36 SB307
837+
838+ 23 02/25/2025 4:06:48 PM ANS209
839+and designate those amounts to offset the cost of the planned strategic 1
840+investments if the commission determines that doing so is in the public 2
841+interest. 3
842+ (ii) If the commission authorizes recording any 4
843+amounts for the projects described in subdivision (t)(3)(B)(i) of this 5
844+section, the investor -owned electric utility or the investor -owned natural 6
845+gas utility shall deduct interest at a rate equal to the cost of short -term 7
846+debt approved in the investor -owned electric utility's or the investor -owned 8
847+natural gas utility’s last general rate case proceeding from any amounts 9
848+recorded until those amounts are applied to offset the cost of strategic 10
615849 investments. 11
616- (b)(1) An investor-owned electric utility or an investor -owned natural 12
617-gas utility may elect to file with the commission a rider to recover 13
618-strategic investments that are not included in rates. 14
619- (2) The investor-owned electric utility or the investor -owned 15
620-natural gas utility shall provide notice to the Attorney General of the 16
621-filing of the rider by the investor -owned electric utility or the investor -17
622-owned natural gas utility on the date the investor -owned electric utility or 18
623-the investor-owned natural gas utility files the rider with the commission. 19
624- (c)(1) An investor-owned electric utility or an investor -owned natural 20
625-gas utility may select the date of the first annual filing update, with all 21
626-subsequent updates to be filed on or by the same day annually as the first 22
627-filing update. 23
628- (2) An investor-owned electric utility or an investor -owned 24
629-natural gas utility shall provide notice to the Attorney General of the 25
630-filing of the rider on the date the investor -owned electric utility or the 26
631-investor-owned natural gas utility files each annual update to the rider with 27
632-the commission. 28
633- (d) For a rider under this subchapter, an investor -owned electric 29
634-utility or an investor -owned natural gas utility shall use a rider test 30
635-period. 31
636- (e)(1) Upon receipt of an investor -owned electric utility's or an 32
637-investor-owned natural gas utility’s filing to implement the rider rate 33
638-schedule and each annual update under this subchapter, the commission shall 34
639-issue an order approving the rider rate schedule and each annual update to 35
640-recover strategic investments under this subchapter if the commission 36 As Engrossed: S3/11/25 SB307
641-
642- 17 03-11-2025 17:15:03 ANS209
643-
644-
645-determines that the investor -owned electric utility's or the investor -owned 1
646-natural gas utility’s application complies with the provisions of this 2
647-section. 3
648- (2)(A) Unless the commission determines that approving the 4
649-investor-owned electric utility's or the investor -owned natural gas utility’s 5
650-application for the rider and each annual update does not comply with this 6
651-subchapter, the commission shall enter an order within ninety (90) calendar 7
652-days following the date of the investor -owned electric utility's or the 8
653-investor-owned natural gas utility’s filing. 9
654- (B)(i) If the commission determines that approving an 10
655-application for approval of a rider rate schedule or annual update under this 11
656-subchapter does not comply with this section, the commission shall enter an 12
657-order denying the application. 13
658- (ii) In the order entered by the commission under 14
659-subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 15
660- (a) The basis for the commission's findings; 16
661-and 17
662- (b) Any evidence or other information 18
663-submitted by the investor -owned electric utility or the investor -owned 19
664-natural gas utility as part of its application that the commission deems to 20
665-be insufficient. 21
666- (C) Each annual update shall include, for the initial 22
667-rider test year, the construction work in progress costs that will ultimately 23
668-be capitalized on which the utility will earn a return, amounts that would 24
669-otherwise be recorded as allowance for funds used during construction, and 25
670-any expenses associated with the construction work in progress that will not 26
671-be capitalized. 27
672- (D) The commission shall verify the amounts included in 28
673-each annual update reflect the amounts authorized for recovery under the 29
674-Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 30
675- (E) The commission shall complete its review of each 31
676-annual update filing and issue its order within sixty (60) days following the 32
677-date of the annual update filing. 33
678- (F)(i) If the investor -owned electric utility or the 34
679-investor-owned natural gas utility submits an amended filing remedying the 35
680-areas of noncompliance identified by the commission in its order, the 36 As Engrossed: S3/11/25 SB307
681-
682- 18 03-11-2025 17:15:03 ANS209
683-
684-
685-commission shall enter an order approving the application within ten (10) 1
686-calendar days following the date of the amended filing unless the commission 2
687-finds that the filing does not comply with the provisions of this subchapter. 3
688- (ii) If the commission finds that the amended filing 4
689-does not remedy the areas of noncompliance, the commission shall enter an 5
690-order denying the application. 6
691- (iii) In the order issued under subdivision 7
692-(e)(2)(F)(ii) of this section, the commission shall discuss: 8
693- (a) The basis for the commission's findings; 9
694-and 10
695- (b) Any evidence or other information 11
696-submitted by the investor -owned electric utility or the investor -owned 12
697-natural gas utility as part of its notice or application that the commission 13
698-deems to be insufficient. 14
699- (G) The process outlined in subdivision (e)(2)(B) and (F) 15
700-of this section may continue until the commission finds that: 16
701- (i) The investor-owned electric utility's or the 17
702-investor-owned natural gas utility's application complies with this 18
703-subchapter; or 19
704- (ii) The investor-owned electric utility or the 20
705-investor-owned natural gas utility withdraws its application or appeals the 21
706-commission's decision under § 23-2-423. 22
707- (H) If the commission fails to issue its order within the 23
708-timeframes stated in this section, the investor -owned electric utility's 24
709-filing or the investor -owned natural gas utility’s filing shall become 25
710-effective by operation of law subject to completion of the commission's 26
711-review under this subchapter. 27
712- (f)(1) At the election of the investor -owned electric utility or the 28
713-investor-owned natural gas utility, strategic investments shall be recovered 29
714-through the rider, separate from the investor -owned electric utility's or the 30
715-investor-owned natural gas utility’s formula rate plan implemented under the 31
716-Formula Rate Review Act, § 23 -4-1201 et seq., any other rider, or otherwise 32
717-as part of the investor -owned electric utility's or the investor -owned 33
718-natural gas utility's rates approved by the commission. 34
719- (2) If elected by an investor -owned electric utility or an 35
720-investor-owned natural gas utility, the rider shall remain in effect under 36 As Engrossed: S3/11/25 SB307
721-
722- 19 03-11-2025 17:15:03 ANS209
723-
724-
725-this subchapter until the investor -owned electric utility or the investor -1
726-owned natural gas utility decides to withdraw the rider with respect to 2
727-future cost recovery for strategic investments to be made after the date of 3
728-the withdrawal. 4
729- (g) For the purposes of calculating rates to recover the costs of 5
730-strategic investments, including rates implemented through an individual 6
731-customer contract, the commission shall ensure that the rates charged to 7
732-customers recover the costs of strategic investments in a manner that is 8
733-consistent with applicable law and in the public interest. 9
734- (h)(1) An amount collected through the rider under this subchapter 10
735-shall be collected subject to refunds pending the completion of the 11
736-commission's review under this subchapter. 12
737- (2) At any time during the process, if the commission finds that 13
738-any costs were not prudently incurred, the commission shall order that the 14
739-costs that were not prudently incurred be refunded to customers through bill 15
740-credits. 16
741- (i) The rider elected by an investor -owned electric utility or an 17
742-investor-owned natural gas utility under this subchapter to recover strategic 18
743-investments is a revenue requirement rider and shall provide return on 19
744-construction work in progress plus operating expenses during construction and 20
745-return on rate base plus operating expenses once complete and in service. 21
746- (j)(1) An investor-owned electric utility or an investor -owned natural 22
747-gas utility shall not accrue an allowance for funds used during construction 23
748-for strategic investments with costs recovered through the rider. 24
749- (2) Instead, the commission shall authorize an investor -owned 25
750-electric utility or an investor -owned natural gas utility to earn a return 26
751-through the rider under this subchapter on any construction work in progress. 27
752- (k) The commission shall authorize an investor -owned electric utility 28
753-or an investor-owned natural gas utility to recover through the rider filed 29
754-under this subchapter any expenses associated with the construction of 30
755-strategic investments that will not be capitalized. 31
756- (l) In calculating construction work in progress, including actual 32
757-costs and any projections, the investor -owned electric utility or the 33
758-investor-owned natural gas utility shall base all amounts on year -end 34
759-information not subject to averaging beginning -of-year or end-of-year 35
760-balances. 36 As Engrossed: S3/11/25 SB307
761-
762- 20 03-11-2025 17:15:03 ANS209
763-
764-
765- (m)(1)(A) During the construction of strategic investments included in 1
766-the rider, an investor -owned electric utility or an investor -owned natural 2
767-gas utility shall include in the capital structure only short -term debt, 3
768-long-term debt, and equity. 4
769- (B) The investor-owned electric utility or the investor -5
770-owned natural gas utility shall base the balances of those items under 6
771-subdivision (m)(1)(A) of this section on the investor -owned electric 7
772-utility’s or the investor -owned natural gas utility’s actual capital 8
773-structure with a minimum equity percentage of thirty percent (30%) and a 9
774-maximum equity percentage of fifty percent (50%). 10
775- (C) During the construction of strategic investments, the 11
776-commission shall not require an investor -owned electric utility or an 12
777-investor-owned natural gas utility that is electing to utilize a rider under 13
778-this subchapter to include in the capital structure of the rider other items, 14
779-including current, accrued, or other liabilities or accumulated deferred 15
780-income taxes. 16
781- (D) For the purposes of the rider, the cost of debt used 17
782-in calculating the cost of capital shall be the cost of short -term debt and 18
783-the cost of long-term debt approved in the investor -owned electric utility’s 19
784-or the investor-owned natural gas utility’s most recent general rate case 20
785-proceeding or formula rate plan annual filing. 21
786- (2) For any strategic investment included in the rider under 22
787-this section that is complete and in service, the investor -owned electric 23
788-utility or the investor -owned natural gas utility shall use the capital 24
789-structure and overall rate of return that was approved in the investor -owned 25
790-electric utility’s or the investor -owned natural gas utility's most recent 26
791-general rate case proceeding or annual formula rate plan filing. 27
792- (n) For the purpose of the rider, the return on equity used in 28
793-calculating the cost of capital shall be set at the return on equity approved 29
794-in the investor-owned electric utility's or the investor -owned natural gas 30
795-utility’s most recent general rate case proceeding. 31
796- (o)(1) On the strategic investments' being complete and in service, 32
797-the commission shall authorize the investor -owned electric utility or the 33
798-investor-owned natural gas utility to earn a fair and reasonable return 34
799-through the rider on any capitalized costs for the strategic investments. 35
800- (2) Once the strategic investments go into service, the 36 As Engrossed: S3/11/25 SB307
801-
802- 21 03-11-2025 17:15:03 ANS209
803-
804-
805-commission shall authorize the investor -owned electric utility or the 1
806-investor-owned natural gas utility to recover through the rider any on -going 2
807-expenses associated with the strategic investments. 3
808- (3) In the investor -owned electric utility's or the investor -4
809-owned natural gas utility’s next general rate case proceeding, the commission 5
810-shall allow the investor -owned electric utility or the investor -owned natural 6
811-gas utility to include any capitalized amounts and associated expenses for 7
812-completed strategic investments in its base rates. 8
813- (4)(A) In the investor -owned electric utility's or the investor -9
814-owned natural gas utility's next general rate case proceeding, the investor-10
815-owned electric utility or the investor -owned natural gas utility shall move 11
816-any amounts for any completed strategic investments from the rider into base 12
817-rates. 13
818- (B) The investor-owned electric utility or the investor -14
819-owned natural gas utility shall continue to recover through the rider 15
820-implemented under this subchapter the costs and expenses associated with any 16
821-strategic investments that are not complete and in service. 17
822- (p) The revenues from the rider shall be included in calculating the 18
823-maximum amount of revenue increase or decrease under § 23 -4-1207(d) for any 19
824-formula rate plan implemented under the Formula Rate Review Act, § 23 -4-1201 20
825-et seq., but shall otherwise be excluded from the revenues included in a 21
826-formula rate plan under the Formula Rate Review Act, § 23 -4-1201 et seq., for 22
827-an investor-owned electric utility or an investor -owned natural gas utility. 23
828- (q)(1) For any excess accumulated deferred income tax associated with 24
829-strategic investments, the commission shall: 25
830- (A) Authorize the investor -owned electric utility or 26
831-investor-owned natural gas utility to apply the excess deferred income taxes 27
832-to offset the investor -owned electric utility's or investor -owned natural gas 28
833-utility’s rate base used in calculating its rates; or 29
834- (B) Apply the excess deferred income taxes as a credit to 30
835-customer bills. 31
836- (2) The commission shall determine which form and the timing of 32
837-applying the accumulated deferred income taxes under subsection (q) of this 33
838-section is in the public interest. 34
839- (r) The commission shall authorize the investor -owned electric utility 35
840-or the investor-owned natural gas utility to monetize or apply any tax 36 As Engrossed: S3/11/25 SB307
841-
842- 22 03-11-2025 17:15:03 ANS209
843-
844-
845-credits or other tax incentives, including without limitation investment tax 1
846-credits and production tax credits, where possible to reduce the cost of 2
847-constructing or acquiring any strategic investments to benefit customers of 3
848-an investor-owned electric utility or an investor -owned natural gas utility. 4
849- (s)(1) The investor -owned electric utility or the investor -owned 5
850-natural gas utility shall seek federal funds and loan programs to reduce the 6
851-cost of constructing, acquiring, and financing strategic investments if 7
852-possible, appropriate, and available to reduce the cost of constructing or 8
853-acquiring any strategic investments. 9
854- (2) If an investor-owned electric utility or an investor -owned 10
855-natural gas utility requests and receives federal funding to support 11
856-constructing or acquiring strategic investments, the applicable amount of 12
857-federal funding shall be deducted from the value of the strategic investments 13
858-that are capitalized and recoverable through rates charged to customers of an 14
859-investor-owned electric utility or an investor -owned natural gas utility. 15
860- (t)(1) If an investor -owned electric utility or an investor -owned 16
861-natural gas utility, with rates regulated under the Formula Rate Review Act, 17
862-§ 23-4-1201 et seq., has a return on equity above the return on the investor -18
863-owned electric utility's or the investor -owned natural gas utility’s most 19
864-recent general rate case proceeding, plus five -tenths percent (0.5%), and 20
865-would otherwise be required to provide credits to a customer's bill, the 21
866-investor-owned electric utility or the investor -owned natural gas utility 22
867-shall not be required to adjust rates and provide credits to customers that 23
868-may otherwise be required under § 23 -4-1207(b) if the investor -owned electric 24
869-utility or the investor -owned natural gas utility has strategic investments 25
870-under construction in an amount equal to or greater than the amount above the 26
871-return on equity approved in the investor -owned electric utility's or the 27
872-investor-owned natural gas utility’s most recent general rate case 28
873-proceeding, plus five -tenths percent (0.5%). 29
874- (2) For an investor -owned electric utility or an investor -owned 30
875-natural gas utility, with rates regulated under the Formula Rate Review Act, 31
876-§ 23-4-1201 et seq., the commission shall not require a reduction of rates to 32
877-the investor-owned electric utility's or the investor -owned natural gas 33
878-utility’s authorized rate of return, or reduce the investor -owned electric 34
879-utility's or the investor -owned natural gas utility’s target rate of return 35
880-under § 23-4-1207(b) for any formula rate plan mechanism under the Formula 36 As Engrossed: S3/11/25 SB307
881-
882- 23 03-11-2025 17:15:03 ANS209
883-
884-
885-Rate Review Act, § 23 -4-1201 et seq., if an investor -owned electric utility 1
886-or an investor-owned natural gas utility has strategic investments under 2
887-construction in an amount equal to or greater than the level of earnings 3
888-above the investor-owned electric utility's or the investor -owned natural gas 4
889-utility’s authorized rate of return or the investor -owned electric utility's 5
890-or the investor-owned natural gas utility’s target rate of return under § 23 -6
891-4-1207(b) for any formula rate plan mechanism implemented under the Formula 7
892-Rate Review Act, § 23 -4-1201 et seq. 8
893- (3)(A) The investor -owned electric utility or the investor -owned 9
894-natural gas utility shall first apply any amounts identified in subdivisions 10
895-(t)(1) and (2) of this section to strategic investments under construction. 11
896- (B)(i) The commission may authorize the investor -owned 12
897-electric utility or the investor -owned natural gas utility to record any 13
898-amounts identified in subdivisions (t)(1) and (2) of this section and 14
899-designate those amounts to offset the cost of approved strategic investments 15
900-not yet under construction if the commission determines that doing so is in 16
901-the public interest. 17
902- (ii) If the commission authorizes recording any 18
903-amounts for the projects described in subdivision (t)(3)(B)(i) of this 19
904-section, the investor -owned electric utility or the investor -owned natural 20
905-gas utility shall deduct interest at a rate equal to the cost of short -term 21
906-debt approved in the investor -owned electric utility's or the investor -owned 22
907-natural gas utility’s last general rate case proceeding from any amounts 23
908-recorded until those amounts are applied to offset the cost of strategic 24
909-investments. 25
910- (C) The investor-owned electric utility or the investor -26
911-owned natural gas utility shall provide credits to customers equal to any 27
912-remaining amounts identified in subdivisions (t)(1) and (2) of this section 28
913-as required under § 23 -4-1207(b), plus interest at a rate equal to the cost 29
914-of short-term debt approved in the investor -owned electric utility's or the 30
915-investor-owned natural gas utility's most recent general rate case proceeding 31
916-or annual formula rate plan filing. 32
917- (u) Except as otherwise provided in this subchapter, this section does 33
918-not alter the powers and authority of the commission. 34
919- (v) A commission review of the expenditures associated with strategic 35
920-investments included in the rider, including evaluating whether or not any 36 As Engrossed: S3/11/25 SB307
921-
922- 24 03-11-2025 17:15:03 ANS209
923-
924-
925-costs or expenses are reasonable and prudently incurred, shall be completed 1
926-within twelve (12) calendar months after the date upon which the investor -2
927-owned electric utility or the investor -owned natural gas utility provides 3
928-notice that the strategic investments are complete and in service. 4
929- (w) An expenditure associated with strategic investments for which an 5
930-application for approval is pending before the commission as of the effective 6
931-date of this subchapter shall be eligible for recovery through the rider 7
932-under this subchapter if: 8
933- (1) The costs are not otherwise included in rates approved by 9
934-the commission before the effective date of this subchapter; 10
935- (2) The investor-owned electric utility or the investor -owned 11
936-natural gas utility has an application pending that was filed before the 12
937-effective date of this subchapter for approval: 13
938- (A) To construct a power generation facility outside of 14
939-the state under § 23 -18-104; 15
940- (B) To obtain a certificate of environmental compatibility 16
941-and public need under the Utility Facility Environmental and Economic 17
942-Protection Act, § 23 -18-501 et seq.; 18
943- (C) To obtain a certificate of public convenience and 19
944-necessity under § 23 -3-201 et seq.; or 20
945- (D) For any other application related to the siting or 21
946-prudence of the decision to invest in the new strategic investments; and 22
947- (3) The commission enters an order after January 1, 2025, 23
948-approving an application that was filed before the effective date of this 24
949-subchapter for approval: 25
950- (A) To construct a power generation facility outside of 26
951-the state under § 23 -18-104; 27
952- (B) To obtain a certificate of environmental compatibility 28
953-and public need under the Utility Facility Environmental and Economic 29
954-Protection Act, § 23 -18-501 et seq.; 30
955- (C) To obtain a certificate of public convenience and 31
956-necessity under § 23 -3-201 et seq.; or 32
957- (D) For any other application related to the siting or 33
958-prudence of the decision to invest in the new strategic investments. 34
959- (x)(1) If a customer pays or multiple customers pay for a portion of 35
960-any strategic investments through a contribution in aid of construction or 36 As Engrossed: S3/11/25 SB307
961-
962- 25 03-11-2025 17:15:03 ANS209
963-
964-
965-through other form of payment, the strategic investments shall continue to be 1
966-considered strategic investments and classified as part of the investor -owned 2
967-electric utility's or the investor -owned natural gas utility’s retail assets 3
968-and recoverable through the investor -owned electric utility's or the 4
969-investor-owned natural gas utility’s retail rates, either in the base rates 5
970-of the investor-owned electric utility or the investor -owned natural gas 6
971-utility, through a rider under this subchapter, or rates otherwise approved 7
972-by the commission. 8
973- (2)(A) A payment by a customer or customers for any a portion of 9
974-any strategic investments through a contribution in aid of construction shall 10
975-be deducted from the cost of the strategic investments capitalized and 11
976-recovered through rates. 12
977- (B) A payment by a customer or customers through any other 13
978-forms of payment shall be recorded for ratemaking purposes, when the 14
979-strategic investments are first included in rates and shall be recognized as 15
980-payment over a period not to exceed the life of the strategic investments, in 16
981-a manner that provides comparable benefits for other customers over the life 17
982-of the strategic investments. 18
983- 19
984- 23-4-1305. Procedure to recover strategic investments through riders — 20
985-Investor-owned electric utility and investor -owned natural gas utility. 21
986- (a) An investor-owned electric utility or an investor -owned natural 22
987-gas utility electing to file with the Arkansas Public Service Commission a 23
988-rider to recover strategic investments that are not otherwise included in 24
989-rates previously approved by the commission, may file an application to 25
990-implement the rider any time within twelve (12) months after: 26
991- (1) The commission enters an order approving an application 27
992-under § 23-3-201 et seq. or the Utility Facility Environmental and Economic 28
993-Protection Act, § 23 -18-501 et seq., or a notice under § 23 -18-104; or 29
994- (2) Any other application related to the siting or prudence of 30
995-the decision to invest in strategic investments. 31
996- (b) An investor-owned electric utility or an investor -owned natural 32
997-gas utility shall file: 33
998- (1) An annual update to the rider to reflect the annual 34
999-expenditures; 35
1000- (2) An update to any projections included in the rider to 36 As Engrossed: S3/11/25 SB307
1001-
1002- 26 03-11-2025 17:15:03 ANS209
1003-
1004-
1005-recover strategic investments; and 1
1006- (3) An investor-owned electric utility's or an investor -owned 2
1007-natural gas utility’s recovery through the rider shall be limited to the 3
1008-amounts identified by the investor -owned electric utility or an investor -4
1009-owned natural gas utility in the proceeding in which the commission approved 5
1010-the strategic investments unless a greater amount is subsequently authorized 6
1011-by the commission. 7
1012- (c) The annual update required under subsection (b) of this section 8
1013-shall include the information stated in subsections (a) -(b) of this section 9
1014-for strategic investments following subsequent commission orders approving 10
1015-strategic investments. 11
1016- (d) An investor-owned electric utility or an investor -owned natural 12
1017-gas utility shall immediately notify the commission of any significant delays 13
1018-or material changes in the construction schedule to include any strategic 14
1019-investments that are abandoned before completion or for which construction 15
1020-has been indefinitely suspended or material changes in costs of any strategic 16
1021-investments recovered through the rider under this subsection (d). 17
1022- (e)(1) An investor-owned electric utility or an investor -owned natural 18
1023-gas utility shall remove the cost of any strategic investments that are 19
1024-abandoned before completion or for which construction has been indefinitely 20
1025-suspended from the rider unless the commission determines, based on 21
1026-substantial evidence provided by the investor -owned electric utility or the 22
1027-investor-owned natural gas utility, that: 23
1028- (A) The costs were reasonable and prudently incurred at 24
1029-the time the costs were incurred; 25
1030- (B) Continued recovery through the rider remains 26
1031-reasonable; 27
1032- (C) The circumstance of the abandonment before completion 28
1033-or indefinite construction suspension is reasonable; and 29
1034- (D) Recovery of those costs is in the public interest. 30
1035- (2) Upon removal of any costs for strategic investments that are 31
1036-abandoned before completion or for which construction has been indefinitely 32
1037-suspended, the investor -owned electric utility or the investor -owned natural 33
1038-gas utility may seek recovery of those costs through rates if the commission 34
1039-determines, based on substantial evidence provided by the investor -owned 35
1040-electric utility or the investor -owned natural gas utility, that: 36 As Engrossed: S3/11/25 SB307
1041-
1042- 27 03-11-2025 17:15:03 ANS209
1043-
1044-
1045- (A) The costs were reasonable and prudently incurred at 1
1046-the time those costs were incurred; 2
1047- (B) The circumstance of the abandonment before completion 3
1048-or indefinite construction suspension is reasonable; and 4
1049- (C) Recovery of those costs is in the public interest. 5
1050- (3)(A) An investor-owned electric utility or an investor -owned 6
1051-natural gas utility may request recovery of any costs for strategic 7
1052-investments that are abandoned before completion or for which construction 8
1053-has been indefinitely suspended if the costs for strategic investments that 9
1054-are abandoned before completion or for which construction has been 10
1055-indefinitely suspended are removed from recovery through the rider in a 11
1056-separate proceeding. 12
1057- (B) Upon receipt of a request for recovery of costs under 13
1058-subdivision (e)(3)(A) of this section, the commission shall determine: 14
1059- (i) Whether recovery of those costs is in the public 15
1060-interest; and 16
1061- (ii) The form and timing of recovery through rates 17
1062-charged to customers. 18
1063- (f)(1)(A) Except as provided in subdivision (f)(2)(D)(i) of this 19
1064-section, an investor -owned electric utility's or an investor -owned natural 20
1065-gas utility’s total amount of revenue increase from an annual update to the 21
1066-rider under this subchapter shall not result in the investor -owned electric 22
1067-utility's or the investor -owned natural gas utility’s rates exceeding a level 23
1068-ten percent (10%) below the national average for all sectors. 24
1069- (B) For this comparison, the rates under subdivision 25
1070-(f)(1)(A) of this section shall be calculated using: 26
1071- (i) The same method as that used by the United 27
1072-States Energy Information Administration and published in its most recent 28
1073-edition of the Electric Power Annual report for electric utilities, as 29
1074-adopted by the commission by rule, or the Natural Gas Annual report for 30
1075-natural gas utilities, as adopted by the commission by rule; and 31
1076- (ii) Data from the same calendar year as the United 32
1077-States Energy Information Administration's publication to which the investor -33
1078-owned electric utility's or the investor -owned natural gas utility’s revenue 34
1079-increase is compared. 35
1080- (C) If the commission finds that the investor -owned 36 As Engrossed: S3/11/25 SB307
1081-
1082- 28 03-11-2025 17:15:03 ANS209
1083-
1084-
1085-electric utility or the investor -owned natural gas utility provides 1
1086-substantial evidence to the commission demonstrating that its rates will 2
1087-remain capable of attracting or retaining economic development opportunities 3
1088-for the state even if the rates exceed ten percent (10%) below national 4
1089-average and that doing so is in the public interest, then the commission 5
1090-shall approve each revenue increase. 6
1091- (2)(A) If the commission approves a revenue increase for an 7
1092-investor-owned electric utility or an investor -owned natural gas utility from 8
1093-an annual update to the rider under this subchapter that results in the 9
1094-investor-owned electric utility's or the investor -owned natural gas utility’s 10
1095-rates exceeding a level ten percent (10%) below the national average, the 11
1096-commission shall submit a letter to the cochairs of the Legislative Council 12
1097-notifying the General Assembly that the commission has approved a revenue 13
1098-increase for an investor -owned electric utility or investor -owned natural gas 14
1099-utility from an annual update to the rider under this subchapter that has 15
1100-resulted in an investor -owned electric utility's or an investor -owned natural 16
1101-gas utility’s total rates inclusive of all riders is exceeding a level ten 17
1102-percent (10%) below the national average. 18
1103- (B) Unless the commission approves an increase in the 19
1104-total amount of revenue increase from an annual update to the rider under 20
1105-this subchapter that exceeds a level ten percent (10%) below the national 21
1106-average for all sectors under subdivision (f)(2)(A) of this section, the 22
1107-investor-owned electric utility or the investor -owned natural gas utility 23
1108-shall adjust its annual update to the rider under subsections (a) —(d) of this 24
1109-section to include only a revenue increase that results in rates that are ten 25
1110-percent (10%) below the national average. 26
1111- (C) The commission shall verify that an annual update to 27
1112-the rider under subsections (a) —(d) of this section does not include a 28
1113-revenue increase that results in rates exceeding a level ten percent (10%) 29
1114-below the national average unless it authorizes a greater amount under 30
1115-subdivision (f)(1)(A) of this section. 31
1116- (D)(i) If an investor -owned natural gas utility’s rates 32
1117-are above the national average for all sectors calculated using the same 33
1118-method as that used by the United States Energy Information Administration 34
1119-and published in its most recent edition of the Natural Gas Annual report for 35
1120-natural gas utilities, as adopted by the commission by rule, and calculated 36 As Engrossed: S3/11/25 SB307
1121-
1122- 29 03-11-2025 17:15:03 ANS209
1123-
1124-
1125-using data from the same calendar year as the United States Energy 1
1126-Information Administration publication to which the investor -owned natural 2
1127-gas utility’s revenue increase is compared, the total amount of revenue 3
1128-increase or decrease for an investor -owned natural gas utility from an annual 4
1129-update to the rider under this subchapter shall not exceed four percent (4%) 5
1130-of each rate class's total revenue. 6
1131- (ii) If a conflict exists between subdivision (f)(1) 7
1132-of this section and subdivision (f)(2)(D)(i) of this section, subdivision 8
1133-(f)(2)(D)(i) of this section shall control. 9
1134- (E) The commission shall submit an annual report to the 10
1135-Legislative Council describing: 11
1136- (i) The strategic investments included in the rider 12
1137-for an investor-owned electric utility or an investor -owned natural gas 13
1138-utility; and 14
1139- (ii) The change in rates resulting from the 15
1140-investor-owned electric utility's and the investor -owned natural gas 16
1141-utility’s annual update to the rider under this subchapter on the investor -17
1142-owned electric utility's or the investor -owned natural gas utility’s rates. 18
1143- (3) An investor-owned electric utility shall submit an annual 19
1144-report to the commission describing its generation portfolio mix based on the 20
1145-generation capacity mix and on the energy mix. 21
1146- (4) The commission shall submit an annual report to the 22
1147-Legislative Council describing the generation portfolio mix based on the 23
1148-generation capacity mix and based on the energy mix for each investor -owned 24
1149-electric utility. 25
1150- (g) Once strategic investments in public utility facilities are 26
1151-complete and in service, an investor -owned electric utility or an investor -27
1152-owned natural gas utility shall: 28
1153- (1) Reconcile the actual expenditures and any projected amounts 29
1154-included in the rider; 30
1155- (2) Net any differences in projected amounts and actual 31
1156-expenditures; and 32
1157- (3) Either: 33
1158- (A) Reduce the amounts ultimately capitalized by any over -34
1159-collection; or 35
1160- (B) Recover any under -collection through subsequent years’ 36 As Engrossed: S3/11/25 SB307
1161-
1162- 30 03-11-2025 17:15:03 ANS209
1163-
1164-
1165-rider filings. 1
1166- (h) For recovery through the rider, an investor -owned electric utility 2
1167-or an investor-owned natural gas utility shall give priority to strategic 3
1168-investments in new electric generation and transmission facilities located in 4
1169-Arkansas, unless: 5
1170- (1) The investor-owned electric utility or the investor -owned 6
1171-natural gas utility demonstrates, and the commission finds that a strategic 7
1172-investment in new electric generation and transmission facilities located 8
1173-outside of Arkansas provides greater benefits to the investor -owned electric 9
1174-utility's or the investor -owned natural gas utility’s customers in Arkansas 10
1175-than a comparable strategic investment in new electric generation and 11
1176-transmission facilities located in Arkansas; 12
1177- (2) A comparable strategic investment in new electric generation 13
1178-or transmission facility is not available or cannot be constructed in 14
1179-Arkansas; or 15
1180- (3) A customer or customers contract to pay all or a portion of 16
1181-the cost of the strategic investment in the resource through a special rate 17
1182-contract, a renewable rate schedule, a contribution in aid of construction, 18
1183-or other form of payment. 19
1184- 20
1185- 23-4-1306. Authorization to recover strategic investments through 21
1186-rider – Electric distribution cooperative and electric generation and 22
1187-transmission cooperative. 23
1188- (a) An electric distribution cooperative or an electric generation and 24
1189-transmission cooperative may obtain a rider to recover strategic investments 25
1190-if not otherwise recoverable in rates previously approved by the Arkansas 26
1191-Public Service Commission after: 27
1192- (1) A commission order approving an application under § 23 -3-201 28
1193-et seq. or the Utility Facility Environmental and Economic Protection Act, § 29
1194-23-18-501 et seq. or a notice under § 23 -18-104; or 30
1195- (2) A commission order approving any other application related 31
1196-to the sighting or prudence of the decision to invest in the new strategic 32
1197-investments. 33
1198- (b)(1) An electric distribution cooperative or an electric generation 34
1199-and transmission cooperative may elect to file with the commission a rider to 35
1200-recover strategic investments that are not included in rates. 36 As Engrossed: S3/11/25 SB307
1201-
1202- 31 03-11-2025 17:15:03 ANS209
1203-
1204-
1205- (2) The electric distribution cooperative or the electric 1
1206-generation and transmission cooperative shall provide notice to the Attorney 2
1207-General of the filing of the rider by the electric distribution cooperative 3
1208-or the electric generation and transmission cooperative on the date the 4
1209-electric distribution cooperative or the electric generation and transmission 5
1210-cooperative files the rider with the commission. 6
1211- (c) An electric distribution cooperative or an electric generation and 7
1212-transmission cooperative may select the date of the first annual filing 8
1213-update, with all subsequent updates to be filed on or by the same day 9
1214-annually as the first filing update. 10
1215- (d) For a rider under this subchapter, an electric distribution 11
1216-cooperative or an electric generation and transmission cooperative shall use 12
1217-a rider test period. 13
1218- (e)(1) Upon receipt of an electric distribution cooperative’s or an 14
1219-electric generation and transmission cooperative's filing to implement the 15
1220-rider rate schedule and each annual update under this subchapter, the 16
1221-commission shall issue an order approving the rider rate schedule and each 17
1222-annual update to recover strategic investments under this subchapter if the 18
1223-commission determines that the electric distribution cooperative’s or the 19
1224-electric generation and transmission cooperative’s application complies with 20
1225-and therefore is in the public interest. 21
1226- (2)(A) Unless the commission determines that approving the 22
1227-electric distribution cooperative's or the electric generation and 23
1228-transmission cooperative's application does not comply with this subchapter, 24
1229-the commission shall enter an order within ninety (90) calendar days 25
1230-following the date of the electric distribution cooperative's or the electric 26
1231-generation and transmission cooperative’s filing. 27
1232- (B)(i) If the commission determines that approving an 28
1233-application does not comply with this section, the commission shall enter an 29
1234-order denying the application. 30
1235- (ii) In the order entered by the commission under 31
1236-subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 32
1237- (a) The basis for the commission's findings; 33
1238-and 34
1239- (b) Any evidence or other information 35
1240-submitted by the electric distribution cooperative or the electric generation 36 As Engrossed: S3/11/25 SB307
1241-
1242- 32 03-11-2025 17:15:03 ANS209
1243-
1244-
1245-and transmission cooperative as part of its application that the commission 1
1246-deems to be insufficient. 2
1247- (C) Each annual update shall include, for the initial 3
1248-rider test year, the construction work in progress costs that will ultimately 4
1249-be capitalized on which the utility will earn a return, amounts that would 5
1250-otherwise be recorded as allowance for funds used during construction, and 6
1251-any expenses associated with the construction work in progress that will not 7
1252-be capitalized. 8
1253- (D) The commission shall verify the amounts included in 9
1254-each annual update reflect the amounts authorized for recovery under the 10
1255-Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 11
1256- (E) The commission shall complete its review of each 12
1257-annual update filing and issue its order within sixty (60) days following the 13
1258-date of the annual update filing. 14
1259- (F)(i) If the electric distribution cooperative or 15
1260-electric generation and transmission cooperative submits an amended filing 16
1261-remedying the areas of noncompliance identified by the commission in its 17
1262-order, the commission shall enter an order approving the application within 18
1263-ten (10) calendar days following the date of the amended filing unless the 19
1264-commission finds that the filing does not comply with the provisions of this 20
1265-subchapter. 21
1266- (ii) If the commission finds that the amended filing 22
1267-does not remedy the areas of noncompliance, the commission shall enter an 23
1268-order denying the application. 24
1269- (iii) In the order entered under subdivision 25
1270-(e)(2)(F)(ii) of this section, the commission shall discuss: 26
1271- (a) The basis for the commission’s findings; 27
1272-and 28
1273- (b) Any evidence or other information 29
1274-submitted by the electric distribution cooperative or electric generation and 30
1275-transmission cooperative with its amended filing that the commission finds 31
1276-does not comply with specific provisions of this subchapter. 32
1277- (G) The process outlined in subdivisions (e)(2)(B) and (F) 33
1278-of this section may continue until the commission finds that: 34
1279- (i) The electric distribution cooperative's or an 35
1280-electric generation and transmission cooperative’s application complies with 36 As Engrossed: S3/11/25 SB307
1281-
1282- 33 03-11-2025 17:15:03 ANS209
1283-
1284-
1285-this subchapter; 1
1286- (ii) The electric distribution cooperative or the 2
1287-electric generation and transmission cooperative withdraws its application; 3
1288-or 4
1289- (iii) The electric distribution cooperative or the 5
1290-electric generation and transmission cooperative appeals the commission's 6
1291-decision under § 23-2-423. 7
1292- (H) If the commission fails to issue its order within the 8
1293-time frames stated in this subchapter, the electric distribution 9
1294-cooperative's or the electric generation and transmission cooperative’s 10
1295-filing shall become effective by operation of law, subject to completion of 11
1296-the commission’s review under this subchapter. 12
1297- (f)(1) At the election of the electric distribution cooperative or the 13
1298-electric generation and transmission cooperative, strategic investments shall 14
1299-be recovered through the rider under this subchapter, separate from any rate 15
1300-adjustments by an electric distribution cooperative under § 23 -4-901 et seq., 16
1301-any rate adjustments by an electric generation and transmission cooperative 17
1302-under § 23-4-1101 et seq., any other rider, or otherwise as part of the 18
1303-electric distribution cooperative's or the electric generation and 19
1304-transmission cooperative’s rates approved by the commission. 20
1305- (2) If elected by an electric distribution cooperative or an 21
1306-electric generation and transmission cooperative, the rider shall remain in 22
1307-effect under this subchapter until the electric distribution cooperative or 23
1308-the electric generation and transmission cooperative decides to withdraw the 24
1309-rider with respect to future cost recovery for strategic investments to be 25
1310-made after the date of the withdrawal. 26
1311- (g) For the purposes of calculating rates to recover the costs of 27
1312-strategic investments, including rates implemented through an individual 28
1313-customer contract, the commission shall ensure that the rates charged to 29
1314-customers recover the costs of strategic investments in a manner that is 30
1315-consistent with applicable law and in the public interest. 31
1316- (h)(1) An amount collected through the rider under this subchapter 32
1317-shall be collected subject to refunds pending the completion of the 33
1318-commission's review under this subchapter. 34
1319- (2) At any time during the process, if the commission finds that 35
1320-any costs were not prudently incurred, the commission shall order that the 36 As Engrossed: S3/11/25 SB307
1321-
1322- 34 03-11-2025 17:15:03 ANS209
1323-
1324-
1325-costs that were not prudently incurred be refunded to customers through bill 1
1326-credits. 2
1327- (i) The rider elected by an electric distribution cooperative or an 3
1328-electric generation and transmission cooperative under this subchapter to 4
1329-recover strategic investments is a revenue requirement rider and shall 5
1330-provide an electric distribution cooperative's or an electric generation and 6
1331-transmission cooperative's approved times interest earned ratio, including 7
1332-any amounts to build members equity, for the construction work in progress 8
1333-during construction and return on rate base plus operating expenses once the 9
1334-strategic investments are complete and in service. 10
1335- (j)(1) An electric distribution cooperative or an electric generation 11
1336-and transmission cooperative shall not accrue an allowance for funds used 12
1337-during construction for strategic investments with costs recovered through 13
1338-the rider. 14
1339- (2) Instead the commission may allow an electric distribution 15
1340-cooperative or an electric generation and transmission cooperative to adjust 16
1341-its revenues through the rider under this subchapter to maintain its 17
1342-authorized times interest earned ratio for expenditures associated with any 18
1343-construction work in progress. 19
1344- (k) The commission may allow an electric distribution cooperative or 20
1345-an electric generation and transmission cooperative to recover through the 21
1346-rider under this subchapter any expenses associated with the construction of 22
1347-strategic investments that will not be capitalized. 23
1348- (l) In calculating construction work in progress, including actual 24
1349-costs and any projections, the electric distribution cooperative or the 25
1350-electric generation and transmission cooperative shall base all amounts on 26
1351-year-end information not subject to averaging beginning -of-year and end-of-27
1352-year balances. 28
1353- (m) For the purposes of the rider under this subchapter, the electric 29
1354-distribution cooperative's or the electric generation and transmission 30
1355-cooperative’s times interest earned ratio shall be the times interest earned 31
1356-ratio underlying its currently approved rates, including any additional 32
1357-amounts to build equity of the members of the electric distribution 33
1358-cooperative or the electric generation and transmission cooperative. 34
1359- (n)(1) On the strategic investments' being complete and in service, 35
1360-the commission shall authorize the electric distribution cooperative or the 36 As Engrossed: S3/11/25 SB307
1361-
1362- 35 03-11-2025 17:15:03 ANS209
1363-
1364-
1365-electric generation and transmission cooperative to adjust its revenues 1
1366-through the rider under this subchapter to maintain its authorized times 2
1367-interest earned ratio for expenditures associated with any construction work 3
1368-in progress costs that will ultimately be capitalized or recorded as 4
1369-allowance for funds used during construction when the strategic investments 5
1370-are complete and in service. 6
1371- (2) Once the strategic investments are complete and in service, 7
1372-the commission shall authorize the electric distribution cooperative or the 8
1373-electric generation and transmission cooperative to recover through the rider 9
1374-under this subchapter any on -going expenses associated with the strategic 10
1375-investments. 11
1376- (3) In the electric distribution cooperative's or the electric 12
1377-generation and transmission cooperative’s next general rate case proceeding, 13
1378-the commission shall allow the electric distribution cooperative or the 14
1379-electric generation and transmission cooperative to include any capitalized 15
1380-amounts and associated expenses for completed strategic investments in its 16
1381-base rates. 17
1382- (4)(A) In its next general rate case proceeding, the electric 18
1383-distribution cooperative or the electric generation and transmission 19
1384-cooperative shall move any amounts for any completed strategic investments 20
1385-from the rider under this subchapter into its base rates. 21
1386- (B) The electric distribution cooperative or the electric 22
1387-generation and transmission cooperative shall continue to recover through the 23
1388-rider under this subchapter the costs and expenses associated with any 24
1389-strategic investments that are not complete and in service. 25
1390- (o) The revenues from the rider under this subchapter shall be 26
1391-included in calculating the allowed level of any rate increase for electric 27
1392-distribution cooperative rate adjustments under § 23 -4-901 et seq. or 28
1393-electric generation and transmission cooperative rate adjustments under § 23 -29
1394-4-1101 et seq. but shall otherwise be excluded from the revenues included in 30
1395-electric distribution cooperative rate adjustments under § 23 -4-901 et seq. 31
1396-or electric generation and transmission cooperative rate adjustments under § 32
1397-23-4-1101 et seq. 33
1398- (p) The commission shall authorize an electric distribution 34
1399-cooperative or an electric generation and transmission cooperative to 35
1400-monetize or apply any tax credits or other tax incentives, including without 36 As Engrossed: S3/11/25 SB307
1401-
1402- 36 03-11-2025 17:15:03 ANS209
1403-
1404-
1405-limitation investment tax credits and production tax credits, where possible 1
1406-to reduce the cost of constructing or acquiring any strategic investments for 2
1407-the benefit of members of the electric distribution cooperative or the 3
1408-electric generation and transmission cooperative. 4
1409- (q)(1) An electric distribution cooperative or an electric generation 5
1410-and transmission cooperative shall seek federal funds and loan programs to 6
1411-reduce the cost of constructing, acquiring, and financing strategic 7
1412-investments if possible, appropriate, and available for the benefit of 8
1413-members of the electric distribution cooperative or the electric generation 9
1414-and transmission cooperative. 10
1415- (2) If an electric distribution cooperative or an electric 11
1416-generation and transmission cooperative requests and receives federal funding 12
1417-to support constructing or acquiring strategic investments, the applicable 13
1418-amount of federal funding shall be deducted from the value of the strategic 14
1419-investments that are capitalized and recoverable through rates charged to 15
1420-members of the electric distribution cooperative or the electric generation 16
1421-and transmission cooperative. 17
1422- (r) If an electric distribution cooperative or an electric generation 18
1423-and transmission cooperative has revenues above its authorized times interest 19
1424-earned ratio, the electric distribution cooperative or the electric 20
1425-generation and transmission cooperative shall not be required to adjust rates 21
1426-if the electric distribution cooperative or the electric generation and 22
1427-transmission cooperative can demonstrate that it has plans to invest in 23
1428-strategic investments that would qualify for recovery through the rider in 24
1429-amounts equal to or greater than the amount above the authorized times 25
1430-interest earned ratio. 26
1431- (s) Except as otherwise provided in this subchapter, this section does 27
1432-not alter the powers and authority of the commission. 28
1433- (t) A commission review of the expenditures associated with strategic 29
1434-investments included in the rider under this subchapter, including evaluating 30
1435-whether or not any costs or expenses are reasonable and prudently incurred, 31
1436-shall be completed within twelve (12) calendar months after the date upon 32
1437-which the electric distribution cooperative or the electric generation and 33
1438-transmission cooperative provides notice that the strategic investments are 34
1439-complete and in service. 35
1440- (u) An expenditure associated with strategic investments for which an 36 As Engrossed: S3/11/25 SB307
1441-
1442- 37 03-11-2025 17:15:03 ANS209
1443-
1444-
1445-application for approval is pending before the commission as of the effective 1
1446-date of this subchapter shall be eligible for recovery through the rider 2
1447-under this subchapter if: 3
1448- (1) The costs are not otherwise included in rates approved by 4
1449-the commission before the effective date of this subchapter; and 5
1450- (2) The electric distribution cooperative or the electric 6
1451-generation and transmission cooperative has an application pending that was 7
1452-filed before the effective date of this subchapter for approval: 8
850+ (C) The investor-owned electric utility or the investor -12
851+owned natural gas utility shall provide credits to customers equal to any 13
852+remaining amounts identified in subdivisions (t)(1) and (2) of this section 14
853+as required under § 23 -4-1207(b). 15
854+ (u) Except as otherwise provided in this subchapter, this section does 16
855+not alter the powers and authority of the commission. 17
856+ (v) A commission review of the expenditures associated with strategic 18
857+investments included in the rider, including evaluating whether or not any 19
858+costs or expenses are reasonable and prudently incurred, shall be completed 20
859+within twelve (12) calendar months after the date upon which the investor -21
860+owned electric utility or the investor -owned natural gas utility provides 22
861+notice that the strategic investments are complete and in service. 23
862+ (w) An expenditure associated with strategic investments for which an 24
863+application for approval is pending before the commission as of the effective 25
864+date of this subchapter shall be eligible for recovery through the rider 26
865+under this subchapter if: 27
866+ (1) The costs are not otherwise included in rates approved by 28
867+the commission before the effective date of this subchapter; 29
868+ (2) The investor-owned electric utility or the investor -owned 30
869+natural gas utility has an application pending that was filed before the 31
870+effective date of this subchapter for approval: 32
871+ (A) To construct a power generation facility outside of 33
872+the state under § 23 -18-104; 34
873+ (B) To obtain a certificate of environmental compatibility 35
874+and public need under the Utility Facility Environmental and Economic 36 SB307
875+
876+ 24 02/25/2025 4:06:48 PM ANS209
877+Protection Act, § 23 -18-501 et seq.; 1
878+ (C) To obtain a certificate of public convenience and 2
879+necessity under § 23 -3-201 et seq.; or 3
880+ (D) For any other application related to the sighting or 4
881+prudence of the decision to invest in the new strategic investments; and 5
882+ (3) The commission enters an order after January 1, 2025, 6
883+approving an application that was filed before the effective date of this 7
884+subchapter for approval: 8
1453885 (A) To construct a power generation facility outside of 9
1454886 the state under § 23 -18-104; 10
1455887 (B) To obtain a certificate of environmental compatibility 11
1456888 and public need under the Utility Facility Environmental and Economic 12
1457889 Protection Act, § 23 -18-501 et seq.; 13
1458890 (C) To obtain a certificate of public convenience and 14
1459891 necessity under § 23 -3-201 et seq.; or 15
1460- (D) For any other application related to the siting or 16
1461-prudence of the decision to invest in the new strategic investments; and 17
1462- (4) The commission enters an order after January 1, 2025, 18
1463-approving an application that was filed before the effective date of this 19
1464-subchapter for approval: 20
1465- (A) To construct a power generation facility outside of 21
1466-the state under § 23 -18-104; 22
1467- (B) To obtain a certificate of environmental compatibility 23
1468-and public need under the Utility Facility Environmental and Economic 24
1469-Protection Act, § 23 -18-501 et seq.; 25
1470- (C) To obtain a certificate of public convenience and 26
1471-necessity under § 23 -3-201 et seq.; or 27
1472- (D) For any other application related to the siting or 28
1473-prudence of the decision to invest in the new strategic investments. 29
1474- (v)(1) If a customer pays or multiple customers pay for a portion of 30
1475-any strategic investments through a contribution in aid of construction or 31
1476-through other form of payment, the strategic investments shall continue to be 32
1477-considered strategic investments and classified as part of the electric 33
1478-distribution cooperative's or the electric generation and transmission 34
1479-cooperative’s retail assets and recoverable through the electric distribution 35
1480-cooperative's or the electric generation and transmission cooperative’s 36 As Engrossed: S3/11/25 SB307
1481-
1482- 38 03-11-2025 17:15:03 ANS209
1483-
1484-
1485-retail rates, either in the base rates of the electric distribution 1
1486-cooperative or the electric generation and transmission cooperative, through 2
1487-a rider under this subchapter, or rates otherwise approved by the commission. 3
1488- (2)(A) A payment by a customer or customers for a portion of any 4
1489-strategic investments through a contribution in aid of construction shall be 5
1490-deducted from the cost of the strategic investments capitalized and recovered 6
1491-through rates. 7
1492- (B) A payment by a customer or customers through any other 8
1493-forms of payment shall be recorded for ratemaking purposes when the strategic 9
1494-investments are first included in rates and shall be recognized as payment 10
1495-over a period not to exceed the life of the strategic investments in a manner 11
1496-that provides comparable benefits for other customers over the life of the 12
1497-strategic investments. 13
1498- 14
1499- 23-4-1307. Procedure to recover strategic investments through rider — 15
1500-Electric distribution cooperative and electric generation and transmission 16
1501-cooperative. 17
1502- (a) An electric distribution cooperative or an electric generation and 18
1503-transmission cooperative electing to file with the Arkansas Public Service 19
1504-Commission a rider under this subchapter to recover strategic investments not 20
1505-otherwise included in rates previously approved by the commission, may file 21
1506-an application to implement the rider any time within twelve (12) months 22
1507-after: 23
1508- (1) A commission order approving an application under § 23 -3-201 24
1509-et seq. or the Utility Facility Environmental and Economic Protection Act, § 25
1510-23-18-501 et seq., or a notice under § 23 -18-104; or 26
1511- (2) Any other application related to the siting or prudence of 27
1512-the decision to invest in the strategic investments. 28
1513- (b)(1) An electric distribution cooperative or an electric generation 29
1514-and transmission cooperative shall file an annual update to the rider under 30
1515-this subchapter to reflect the annual expenditures plus an update to any 31
1516-projections included in the rider under this subchapter to recover strategic 32
1517-investments. 33
1518- (2) An electric distribution cooperative’s or an electric 34
1519-generation and transmission cooperative’s recovery through the rider shall be 35
1520-limited to the amounts identified by the electric distribution cooperative or 36 As Engrossed: S3/11/25 SB307
1521-
1522- 39 03-11-2025 17:15:03 ANS209
1523-
1524-
1525-the electric generation and transmission cooperative in the proceeding in 1
1526-which the commission approved the strategic investments unless a greater 2
1527-amount is subsequently authorized by the commission. 3
1528- (c) The annual update required under subdivision (b)(1) of this 4
1529-section shall include the amounts stated in this section for strategic 5
1530-investments following subsequent orders from the commission approving 6
1531-strategic investments. 7
1532- (d) An electric distribution cooperative or an electric generation and 8
1533-transmission cooperative shall immediately notify the commission of any 9
1534-significant delays or material changes in the construction schedule to 10
1535-include any strategic investments that are abandoned before completion or for 11
1536-which construction has been indefinitely suspended or material changes in 12
1537-costs of any strategic investments recovered through the rider in this 13
1538-subsection (d). 14
1539- (e)(1) An electric distribution cooperative or an electric generation 15
1540-and transmission cooperative shall remove from the rider under this 16
1541-subchapter the cost of any strategic investments that are abandoned before 17
1542-completion or for which construction has been indefinitely suspended unless 18
1543-the commission determines, based on substantial evidence provided by the 19
1544-electric distribution cooperative or the electric generation and transmission 20
1545-cooperative, that: 21
1546- (A) The costs were reasonable and prudently incurred at 22
1547-the time those costs were incurred; 23
1548- (B) Continued recovery through the rider under this 24
1549-subchapter remains reasonable; 25
1550- (C) The circumstance of the abandonment before completion 26
1551-or indefinite construction suspension is reasonable; and 27
1552- (D) Recovery of those costs is in the public interest. 28
1553- (2) Upon removal of any costs for strategic investments that are 29
1554-abandoned or for which construction has been indefinitely suspended, an 30
1555-electric distribution cooperative or an electric generation and transmission 31
1556-cooperative may seek recovery of those costs through rates if the commission 32
1557-determines, based on substantial evidence provided by the electric 33
1558-distribution cooperative or the electric generation and transmission 34
1559-cooperative, that: 35
1560- (A) The costs were reasonable and prudently incurred at 36 As Engrossed: S3/11/25 SB307
1561-
1562- 40 03-11-2025 17:15:03 ANS209
1563-
1564-
1565-the time those costs were incurred; 1
1566- (B) The circumstance of the abandonment before completion 2
1567-or indefinite construction suspension is reasonable; and 3
1568- (C) Recovery of those costs is in the public interest. 4
1569- (3)(A) An electric distribution cooperative or an electric 5
1570-generation and transmission cooperative may request recovery of any costs for 6
1571-strategic investments that are abandoned before completion or for which 7
1572-construction has been indefinitely suspended and that are removed from 8
1573-recovery through the rider under this subchapter in a separate proceeding. 9
1574- (B) The commission shall determine: 10
1575- (i) Whether recovery of those costs is in the public 11
1576-interest; and 12
1577- (ii) The form and timing of recovery through rates 13
1578-charged to customers. 14
1579- (f)(1)(A) An electric distribution cooperative’s or an electric 15
1580-generation and transmission cooperative’s total amount of revenue increase 16
1581-from an annual update to the rider under this subchapter shall not result in 17
1582-the electric distribution cooperative’s or the electric generation and 18
1583-transmission cooperative’s rates exceeding a level ten percent (10%) below 19
1584-the national average for all sectors calculated using the same method as that 20
1585-used by the United States Energy Information Administration and published in 21
1586-its most recent editions of the Electric Power Annual report for electric 22
1587-public utilities as adopted by the commission by rule and calculated using 23
1588-data from the same calendar year as the United States Energy Information 24
1589-Administration publication to which the electric distribution cooperative's 25
1590-or the electric generation and transmission cooperative’s revenue increase is 26
1591-compared. 27
1592- (B) If an electric distribution cooperative or an electric 28
1593-generation and transmission cooperative provides substantial evidence 29
1594-demonstrating that the electric distribution cooperative's or the electric 30
1595-generation and transmission cooperative's rates will remain capable of 31
1596-attracting or retaining economic development opportunities for the state even 32
1597-if the rates exceed a level of ten percent (10%) below national average and 33
1598-that doing so is in the public interest, then the commission shall approve 34
1599-the revenue increase. 35
1600- (2)(A) If the commission approves a revenue increase for an 36 As Engrossed: S3/11/25 SB307
1601-
1602- 41 03-11-2025 17:15:03 ANS209
1603-
1604-
1605-electric distribution cooperative or an electric generation and transmission 1
1606-cooperative from an annual update to the rider under this subchapter that 2
1607-results in the electric distribution cooperative's or the electric generation 3
1608-and transmission cooperative's rates exceeding a level ten percent (10%) 4
1609-below the national average, the commission shall submit a letter to the 5
1610-cochairs of the Legislative Council notifying the General Assembly that the 6
1611-commission has approved a revenue increase for the electric distribution 7
1612-cooperative or the electric generation and transmission cooperative from an 8
1613-annual update to the rider under this subchapter that has resulted in the 9
1614-electric distribution cooperative’s or the electric generation and 10
1615-transmission cooperative’s total rates, inclusive of all riders, that exceeds 11
1616-a level ten percent (10%) below the national average. 12
1617- (B) Unless the commission approves an increase in the 13
1618-total amount of revenue increase from an annual update to the rider under 14
1619-this subchapter that exceeds a level ten percent (10%) below the national 15
1620-average for all sectors under subdivision (g)(1)(A) of this section, the 16
1621-electric distribution cooperative or the electric generation and transmission 17
1622-cooperative shall adjust an annual update as required under subsections (a) —18
1623-(c) of this section to include only a revenue increase that results in rates 19
1624-that are ten percent (10%) below the national average. 20
1625- (C) The commission shall verify that an annual update to 21
1626-the rider under subsections (a) —(c) of this section does not include a 22
1627-revenue increase that results in rates exceeding a level ten percent (10%) 23
1628-below the national average unless it authorizes a greater amount under 24
1629-subdivision (f)(1)(A). 25
1630- (g) The commission shall submit an annual report to the Legislative 26
1631-Council describing the strategic investments included in the rider under this 27
1632-subchapter for each electric distribution cooperative or electric generation 28
1633-and transmission cooperative and indicating the change in rates resulting 29
1634-from each electric distribution cooperative's or electric generation and 30
1635-transmission cooperative's annual update to the rider under this subchapter 31
1636-on the electric distribution cooperative's or the electric generation and 32
1637-transmission cooperative’s rates. 33
1638- (h)(1) Each electric distribution cooperative or electric generation 34
1639-and transmission cooperative shall submit an annual report to the commission 35
1640-describing the electric distribution cooperative or the electric generation 36 As Engrossed: S3/11/25 SB307
1641-
1642- 42 03-11-2025 17:15:03 ANS209
1643-
1644-
1645-and transmission cooperative generation portfolio mix based on the generation 1
1646-capacity mix and based on the energy mix. 2
1647- (2) The commission shall submit an annual report to the 3
1648-Legislative Council describing the generation portfolio mix based on the 4
1649-generation capacity mix and based on the energy mix for an electric 5
1650-distribution cooperative or an electric generation and transmission 6
1651-cooperative. 7
1652- (i) Once strategic investments in public utility facilities that are 8
1653-complete and in service, an electric distribution cooperative or an electric 9
1654-generation and transmission cooperative shall: 10
1655- (1) Reconcile the actual expenditures and any projected amounts 11
1656-included in the rider under this subchapter to recover strategic investments; 12
1657- (2) Net any differences in projected amounts and actual 13
1658-expenditures; and 14
1659- (3) Either: 15
1660- (A) Reduce the amounts ultimately capitalized by any over -16
1661-collection; or 17
1662- (B) Recover any under -collection through subsequent years’ 18
1663-rider to recover strategic investments filings. 19
1664- (j) For recovery through the rider, an electric distribution 20
1665-cooperative or an electric generation and transmission cooperative shall give 21
1666-priority to strategic investments in new electric generation and transmission 22
1667-facilities located in Arkansas, unless: 23
1668- (1) The electric distribution cooperative or the electric 24
1669-generation and transmission cooperative demonstrates, and the commission 25
1670-finds that a strategic investment in new electric generation and transmission 26
1671-facilities located outside of Arkansas provides greater benefits to the 27
1672-electric distribution cooperative's or an electric generation and 28
1673-transmission cooperative’s customers in Arkansas than a comparable strategic 29
1674-investment in new electric generation and transmission facilities located in 30
1675-Arkansas; 31
1676- (2) A comparable strategic investment in new electric generation 32
1677-or transmission facility is not available or cannot be constructed in 33
1678-Arkansas; or 34
1679- (3) A customer or customers contract to pay all or a portion of 35
1680-the cost of the strategic investment in the resource through a special rate 36 As Engrossed: S3/11/25 SB307
1681-
1682- 43 03-11-2025 17:15:03 ANS209
1683-
1684-
1685-contract, a renewable rate schedule, a contribution in aid of construction, 1
1686-or other form of payment. 2
1687- 3
1688- 23-4-1308. Recovery of advanced energy technologies and feasibility 4
1689-studies under strategic investments rider — Definition. 5
1690- (a)(1)(A) Upon a finding by the Arkansas Public Service Commission 6
1691-that advanced energy technologies are in the public interest, a public 7
1692-utility may elect to pursue strategic investments in the advanced energy 8
1693-technologies and shall recover strategic investments in the advanced energy 9
1694-technologies through the rider obtained under this subchapter after a 10
1695-commission order approving an application under § 23 -3-201 et seq. or § 23-11
1696-18-501 et seq., a notice under § 23 -18-104, or any other application related 12
1697-to the siting or prudence of the decision to invest in strategic investments. 13
1698- (B) The commission may find that advanced energy 14
1699-technologies are in the public interest under subdivision (a)(1)(A) of this 15
1700-section by considering whether those advanced energy technologies are: 16
1701- (i) Technically feasible; 17
1702- (ii) Commercially and financially viable; and 18
1703- (iii) Otherwise beneficial to customers in Arkansas. 19
1704- (2)(A) A facility using advanced energy technologies that are in 20
1705-use by a public utility in Arkansas to serve customers, including without 21
1706-limitation nuclear generation or hydroelectric generation, pumped or run -of-22
1707-river, is not subject to subdivision (a)(1)(A) of this section. 23
1708- (B) A public utility may recover the costs of feasibility 24
1709-studies and strategic investments in advanced energy technologies that are 25
1710-currently being used or have been used by the public utility in Arkansas to 26
1711-serve customers through a rider obtained under this subchapter. 27
1712- (3) As used in this section, "advanced energy technologies" 28
1713-includes without limitation: 29
1714- (A) Modular nuclear reactors; 30
1715- (B) New technologies for nuclear generation technologies; 31
1716- (C) Hydrogen-fueled generation technologies; 32
1717- (D) Geothermal generation technologies; 33
1718- (E) Renewable natural gas technologies; 34
1719- (F) Hydrogen technologies; 35
1720- (G) Biomass generation technologies; 36 As Engrossed: S3/11/25 SB307
1721-
1722- 44 03-11-2025 17:15:03 ANS209
1723-
1724-
1725- (H) Hydroelectric generation technologies; and 1
1726- (I) Emissions capture and sequestration equipment or 2
1727-facilities associated with any new or existing major utility facility as 3
1728-defined in the Utility Facility Environmental and Economic Protection Act, § 4
1729-23-18-501 et seq., or other electric transmission facilities or natural gas 5
1730-transmission facilities by a public utility that are: 6
1731- (i) Required by state law or rule or federal 7
1732-regulation; 8
1733- (ii) Paid for in total or in part by a customer or 9
1734-customers through a special rate contract, a contribution in aid of 10
1735-construction, or other form of payment; or 11
1736- (iii) Otherwise found by the commission to be in the 12
1737-public interest. 13
1738- (b) A public utility shall monitor and evaluate advancements in 14
1739-modular nuclear reactors and other new nuclear generation technologies and 15
1740-evaluate the resources as part of the public utility's resource planning once 16
1741-those technologies become in the public interest considering without 17
1742-limitation whether or not those technologies become technically feasible, 18
1743-commercially and financially viable, and otherwise beneficial to customers in 19
1744-Arkansas. 20
1745- (c) For strategic investments approved by the commission, a public 21
1746-utility may elect to, and upon election may recover strategic investments in 22
1747-advanced energy technologies and feasibility studies through a rider under 23
1748-this section. 24
1749- (d)(1) Upon election by a public utility, the commission shall 25
1750-authorize a public utility to recover the reasonable and prudently incurred 26
1751-costs of studying the feasibility of advanced energy technologies, including 27
1752-the cost of engineering and economic analyses to assess the technical, 28
1753-financial, and commercial feasibility of implementing and using advanced 29
1754-energy technologies to serve customers in Arkansas through the rider to 30
1755-recover strategic investments under this section for feasibility studies of 31
1756-advanced energy technologies associated with strategic investments that are 32
1757-approved by the commission. 33
1758- (2) For all other feasibility studies of advanced energy 34
1759-technologies, the commission shall authorize a public utility to recover the 35
1760-reasonable and prudently incurred cost of the feasibility study and shall 36 As Engrossed: S3/11/25 SB307
1761-
1762- 45 03-11-2025 17:15:03 ANS209
1763-
1764-
1765-determine the form and timing of recovery through rates charged to customers. 1
892+ (D) For any other application related to the sighting or 16
893+prudence of the decision to invest in the new strategic investments. 17
894+ (x)(1) If a customer pays or multiple customers pay for a portion of 18
895+any strategic investments through a contribution in aid of construction or 19
896+through other form of payment, the strategic investments shall continue to be 20
897+considered strategic investments and classified as part of the investor -owned 21
898+electric utility's or the investor -owned natural gas utility’s retail assets 22
899+and recoverable through the investor -owned electric utility's or the 23
900+investor-owned natural gas utility’s retail rates, either in the base rates 24
901+of the investor-owned electric utility or the investor -owned natural gas 25
902+utility, through a rider under this subchapter, or rates otherwise approved 26
903+by the commission. 27
904+ (2)(A) A payment by a customer or customers for any a portion of 28
905+any strategic investments through a contribution in aid of construction shall 29
906+be deducted from the cost of the strategic investments capitalized and 30
907+recovered through rates. 31
908+ (B) A payment by a customer or customers through any other 32
909+forms of payment shall be recorded for ratemaking purposes, when the 33
910+strategic investments are completed and placed into service and shall be 34
911+recognized as payment over a period not to exceed the life of the strategic 35
912+investments, in a manner that provides comparable benefits for other 36 SB307
913+
914+ 25 02/25/2025 4:06:48 PM ANS209
915+customers over the life of the strategic investments. 1
1766916 2
1767- 23-4-1309. Authorization of special rate contracts. 3
1768- (a)(1) An investor-owned electric utility or an investor -owned natural 4
1769-gas utility may enter into a special rate contract to serve a new or existing 5
1770-customer location in Arkansas. 6
1771- (2) If the Arkansas Public Service Commission finds that the 7
1772-special rate contract under subdivision (a)(1) of this section is consistent 8
1773-with the public interest, the commission shall enter an order approving the 9
1774-special rate contract within ninety (90) days after an investor -owned 10
1775-electric utility or an investor -owned natural gas utility files an 11
1776-application for approval. 12
1777- (3) If the commission finds that a special rate contract in the 13
1778-application is inconsistent with the public interest under subdivision (b)(2) 14
1779-of this section, the commission shall: 15
1780- (A) Enter an order describing the provisions that are not 16
1781-consistent with the public interest; and 17
1782- (B) Provide an opportunity for the investor -owned electric 18
1783-utility or the investor -owned natural gas utility to file an amended 19
1784-application to remedy the identified insufficiencies. 20
1785- (4)(A) If an investor -owned electric utility or an investor -21
1786-owned natural gas utility files an amended application remedying those 22
1787-provisions, the commission shall enter an order approving the special rate 23
1788-contract in the application within thirty (30) days after the investor -owned 24
1789-electric utility's or the investor -owned natural gas utility's filing. 25
1790- (B) If the commission determines that approving the 26
1791-contract is inconsistent with the public interest, in its order denying 27
1792-approval of the contract, the commission shall include a discussion of: 28
1793- (i) The basis for the commission's findings; and 29
1794- (ii) The specific evidence or information provided 30
1795-by the investor-owned electric utility or an investor -owned natural gas 31
1796-utility as part of its application upon which the commission relied to reach 32
1797-that conclusion in its order. 33
1798- (C)(i) If an investor -owned electric utility or an 34
1799-investor-owned natural gas utility submits additional evidence or other 35
1800-information demonstrating that the contract is in the public interest, the 36 As Engrossed: S3/11/25 SB307
1801-
1802- 46 03-11-2025 17:15:03 ANS209
1803-
1804-
1805-commission shall enter an order approving the contract within thirty (30) 1
1806-days after its filing unless the commission determines that approving the 2
1807-contract is inconsistent with the public interest. 3
1808- (ii) If the commission determines that approving the 4
1809-contract is inconsistent with the public interest, in its order denying 5
1810-approval of the contract, the commission shall include a discussion of: 6
1811- (a) The basis for the commission's findings; 7
1812-and 8
1813- (b) The specific evidence or information 9
1814-provided by the investor -owned electric utility or the investor -owned natural 10
1815-gas utility as part of its application upon which the commission relied to 11
1816-reach that conclusion in its order. 12
1817- (iii) The process outlined in subdivision (a)(4) of 13
1818-this section may continue until the commission finds that: 14
1819- (a) Approving the contract is in the public 15
1820-interest; 16
1821- (b) The investor-owned electric utility or the 17
1822-investor-owned natural gas utility withdraws its application; or 18
1823- (c) The investor-owned electric utility or an 19
1824-investor-owned natural gas utility appeals the commission's decision under § 20
1825-23-2-423. 21
1826- (b)(1) An investor-owned electric utility or an investor -owned natural 22
1827-gas utility shall be authorized to develop and implement rates and other 23
1828-contract provisions to recover all or part of the cost of any strategic 24
1829-investments necessary to serve the customer as part of the special rate 25
1830-contract if the investor -owned electric utility or the investor -owned natural 26
1831-gas utility demonstrates that doing so is in the public interest. 27
1832- (2) As part of a special rate contract, the investor -owned 28
1833-electric utility or the investor -owned natural gas utility is authorized to 29
1834-set forth customer rates and other contract terms attributable to all or part 30
1835-of the cost of any strategic investments through various cost recovery 31
1836-methods, including without limitation: 32
1837- (A) A contribution in aid of construction; 33
1838- (B) Any other contribution toward the cost of the 34
1839-strategic investments; 35
1840- (C) As part of the customer's monthly rate; 36 As Engrossed: S3/11/25 SB307
1841-
1842- 47 03-11-2025 17:15:03 ANS209
1843-
1844-
1845- (D) A customer prepayment or other charge; 1
1846- (E) Prepaid allowance for funds used during construction; 2
1847-or 3
1848- (F) As part of a minimum bill provision. 4
1849- (c) An electric cooperative corporation that is established under the 5
1850-Electric Cooperative Corporation Act, § 23 -18-301 et seq., including any 6
1851-electric generation and transmission cooperative, may facilitate the recovery 7
1852-of all or part of the cost in subsections (a) and (b) of this section through 8
1853-one (1) or more riders under this subchapter. 9
1854- (d) This section does not alter or diminish the commission’s authority 10
1855-over an electric utility’s allocated service territory, including without 11
1856-limitation where the commission has authorized an electric utility to serve 12
1857-within a municipality, territorial district, or other geographic area. 13
1858- 14
1859- 23-4-1310. Authorization for alternative methods of financing. 15
1860- (a) An electric utility or a natural gas utility may use alternative 16
1861-methods of financing for the purpose of financing strategic investments under 17
1862-this subchapter. 18
1863- (b) The alternative methods of financing may include without 19
1864-limitation: 20
1865- (1) Sale-leaseback agreements; 21
1866- (2) Third-party financing or customer financing; or 22
1867- (3) Other methods of financing. 23
1868- (c)(1) The Arkansas Public Service Commission shall not disallow, 24
1869-impute alternative values, or adjust the financing under this section unless 25
1870-the commission determines based on substantial evidence that: 26
1871- (A) The financing is unreasonable; 27
1872- (B) The costs are not prudently incurred; or 28
1873- (C) The financing is detrimental to customers. 29
1874- (2)(A) If an electric utility or a natural gas utility files 30
1875-additional evidence or other information demonstrating that the financing is 31
1876-reasonable and in the public interest, the commission shall enter an order 32
1877-approving the financing within thirty (30) days after its filing if the 33
1878-commission determines that approving the financing is consistent with the 34
1879-public interest. 35
1880- (B) If the commission determines that approving the 36 As Engrossed: S3/11/25 SB307
1881-
1882- 48 03-11-2025 17:15:03 ANS209
1883-
1884-
1885-financing is inconsistent with the public interest, in its order denying 1
1886-approval of the financing, the commission shall include a discussion of: 2
1887- (i) The basis for the commission's findings; and 3
1888- (ii) The specific evidence or information provided 4
1889-by the electric utility or the natural gas utility as part of its application 5
1890-upon which the commission relied to reach that conclusion in its order. 6
1891- (C)(i) If an electric utility or a natural gas utility 7
1892-submits additional evidence or other information demonstrating that the 8
1893-financing is in the public interest, the commission shall enter an order 9
1894-approving the contract within thirty (30) days after its filing unless the 10
1895-commission determines that approving the financing is inconsistent with the 11
1896-public interest. 12
1897- (ii) If the commission determines that approving the 13
1898-financing is inconsistent with the public interest, in its order denying 14
1899-approval of the financing, the commission shall include a discussion of: 15
1900- (a) The basis for the commission's findings; 16
1901-and 17
1902- (b) The specific evidence or information 18
1903-provided by the electric utility or the natural gas utility as part of its 19
1904-application upon which the commission relied to reach that conclusion in its 20
1905-order. 21
1906- (D) The process outlined in subdivision (c)(2) of this 22
1907-section may continue until the commission finds that: 23
1908- (i) Approving the financing is in the public 24
1909-interest; 25
1910- (ii) The electric utility or the natural gas utility 26
1911-withdraws its application; or 27
1912- (iii) The electric utility or the natural gas 28
1913-utility appeals the commission's decision under § 23-3-423. 29
1914- 30
1915- 23-4-1311. Rules. 31
1916- (a) The Arkansas Public Service Commission shall amend its rules as 32
1917-required to implement and administer this subchapter. 33
1918- (b) The commission shall initiate a proceeding to establish any new 34
1919-rules or modify any existing rules necessary to administer this subchapter 35
1920-and any other applicable exemptions under this subchapter. 36 As Engrossed: S3/11/25 SB307
1921-
1922- 49 03-11-2025 17:15:03 ANS209
1923-
1924-
1925- (c) The commission shall enter an order approving the rules necessary 1
1926-to administer this subchapter before March 31, 2026. 2
1927- (d) An electric public utility or a natural gas public utility shall 3
1928-be authorized to file an application under this section after the effective 4
1929-date of this act before the commission completes any modification to its 5
1930-rules necessary to carry out this section. 6
917+ 23-4-1305. Procedure to recover strategic investments through riders — 3
918+Investor-owned electric utility and investor -owned natural gas utility. 4
919+ (a) An investor-owned electric utility or an investor -owned natural 5
920+gas utility electing to file with the Arkansas Public Service Commission a 6
921+rider to recover strategic investments that are not otherwise included in 7
922+rates previously approved by the commission, may file an application to 8
923+implement the rider any time within twelve (12) months after: 9
924+ (1) The commission enters an order approving an application 10
925+under § 23-3-201 et seq. or the Utility Facility Environmental and Economic 11
926+Protection Act, § 23 -18-501 et seq., or a notice under § 23 -18-104; or 12
927+ (2) Any other application related to the sighting or prudence of 13
928+the decision to invest in strategic investments. 14
929+ (b) An investor-owned electric utility or an investor -owned natural 15
930+gas utility shall file: 16
931+ (1) An annual update to the rider to reflect the annual 17
932+expenditures; 18
933+ (2) An update to any projections included in the rider to 19
934+recover strategic investments; and 20
935+ (3) An investor-owned electric utility's or an investor -owned 21
936+natural gas utility’s recovery through the rider shall be limited to the 22
937+amounts identified by the investor -owned electric utility or an investor -23
938+owned natural gas utility in the proceeding in which the commission approved 24
939+the strategic investments unless a greater amount is subsequently authorized 25
940+by the commission. 26
941+ (c) The annual update required under subsection (b) of this section 27
942+shall include the information stated in subsections (a) -(b) of this section 28
943+for strategic investments following subsequent commission orders approving 29
944+strategic investments. 30
945+ (d) An investor-owned electric utility or an investor -owned natural 31
946+gas utility shall notify the commission of any significant delays or material 32
947+changes in the construction schedule or cost of any strategic investments 33
948+approved by the commission under § 23 -3-201 et seq., § 23-18-104, or the 34
949+Utility Facility Environmental and Economic Protection Act, § 23 -18-501 et 35
950+seq., from the information available to the commission at the time of its 36 SB307
951+
952+ 26 02/25/2025 4:06:48 PM ANS209
953+approval. 1
954+ (e)(1) An investor-owned electric utility or an investor -owned natural 2
955+gas utility shall remove the cost of any strategic investments that are 3
956+abandoned before completion or for which construction has been indefinitely 4
957+suspended from the rider unless the commission determines, based on 5
958+substantial evidence provided by the investor -owned electric utility or the 6
959+investor-owned natural gas utility, that: 7
960+ (A) The costs were reasonable and prudently incurred at 8
961+the time the costs were incurred; 9
962+ (B) Continued recovery through the rider remains 10
963+reasonable versus recovery through rates; 11
964+ (C) The circumstance of the abandonment before completion 12
965+or indefinite construction suspension is reasonable; or 13
966+ (D) A customer or customers have paid all or a portion of 14
967+the cost of the strategic investments through a contribution in aid of 15
968+construction, special rate contract, or other form of payment. 16
969+ (2) Upon removal of any costs for strategic investments that are 17
970+abandoned before completion or for which construction has been indefinitely 18
971+suspended, the investor -owned electric utility or the investor -owned natural 19
972+gas utility may seek recovery of those costs through rates if the commission 20
973+determines, based on substantial evidence provided by the investor -owned 21
974+electric utility or the investor -owned natural gas utility, that: 22
975+ (A) The costs were reasonable and prudently incurred at 23
976+the time those costs were incurred; 24
977+ (B) The circumstance of the abandonment before completion 25
978+or indefinite construction suspension is reasonable; or 26
979+ (C) A customer or customers have paid all or a portion of 27
980+the cost of the strategic investment through a contribution in aid of 28
981+construction, special rate contract, or other form of payment. 29
982+ (3)(A) An investor-owned electric utility or an investor -owned 30
983+natural gas utility may request recovery of any costs for strategic 31
984+investments that are abandoned before completion or for which construction 32
985+has been indefinitely suspended if the costs for strategic investments that 33
986+are abandoned before completion or for which construction has been 34
987+indefinitely suspended are removed from recovery through the rider in a 35
988+separate proceeding. 36 SB307
989+
990+ 27 02/25/2025 4:06:48 PM ANS209
991+ (B) Upon receipt of a request for recovery of costs under 1
992+subdivision (e)(3)(A) of this section, the commission shall determine: 2
993+ (i) Whether recovery of those costs is in the public 3
994+interest; and 4
995+ (ii) The form and timing of recovery through rates 5
996+charged to customers. 6
997+ (f)(1)(A) Except as provided in subdivision (f)(2)(D)(i) of this 7
998+section, an investor -owned electric utility's or an investor -owned natural 8
999+gas utility’s total amount of revenue increase from an annual update to the 9
1000+rider under this subchapter shall not result in the investor -owned electric 10
1001+utility's or the investor -owned natural gas utility’s rates exceeding a level 11
1002+ten percent (10%) below the national average for all sectors. 12
1003+ (B) For this comparison, the rates under subdivision 13
1004+(f)(1)(A) of this section shall be calculated using: 14
1005+ (i) The same method as that used by the United 15
1006+States Energy Information Administration and published in its most recent 16
1007+edition of the Electric Power Annual report for electric utilities, as 17
1008+adopted by the commission by rule, or the Natural Gas Annual report for 18
1009+natural gas utilities, as adopted by the commission by rule; and 19
1010+ (ii) Data from the same calendar year as the United 20
1011+States Energy Information Administration's publication to which the investor -21
1012+owned electric utility's or the investor -owned natural gas utility’s revenue 22
1013+increase is compared. 23
1014+ (C) If the commission finds that the investor -owned 24
1015+electric utility or the investor -owned natural gas utility provides 25
1016+substantial evidence to the commission demonstrating that its rates will 26
1017+remain capable of attracting or retaining economic development opportunities 27
1018+for the state even if the rates exceed ten percent (10%) below national 28
1019+average and that doing so is in the public interest, then the commission 29
1020+shall approve each revenue increase. 30
1021+ (2)(A) If the commission approves a revenue increase for an 31
1022+investor-owned electric utility or an investor -owned natural gas utility from 32
1023+an annual update to the rider under this subchapter that results in the 33
1024+investor-owned electric utility's or the investor -owned natural gas utility’s 34
1025+rates exceeding a level ten percent (10%) below the national average, the 35
1026+commission shall submit a letter to the cochairs of the Legislative Council 36 SB307
1027+
1028+ 28 02/25/2025 4:06:48 PM ANS209
1029+notifying the General Assembly that the commission has approved a revenue 1
1030+increase for an investor -owned electric utility or investor -owned natural gas 2
1031+utility from an annual update to the rider under this subchapter that has 3
1032+resulted in an investor -owned electric utility's or an investor -owned natural 4
1033+gas utility’s total rates inclusive of all riders is exceeding a level ten 5
1034+percent (10%) below the national average. 6
1035+ (B) Unless the commission approves an increase in the 7
1036+total amount of revenue increase from an annual update to the rider under 8
1037+this subchapter that exceeds a level ten percent (10%) below the national 9
1038+average for all sectors under subdivision (f)(2)(A) of this section, the 10
1039+investor-owned electric utility or the investor -owned natural gas utility 11
1040+shall adjust its annual update to the rider under subsections (a) —(d) of this 12
1041+section to include only a revenue increase that results in rates that are ten 13
1042+percent (10%) below the national average. 14
1043+ (C) The commission shall verify that an annual update to 15
1044+the rider under subsections (a) —(d) of this section does not include a 16
1045+revenue increase that results in rates exceeding a level ten percent (10%) 17
1046+below the national average unless it authorizes a greater amount under 18
1047+subdivision (f)(1)(A) of this section. 19
1048+ (D)(i) If an investor -owned natural gas utility’s rates 20
1049+are above the national average for all sectors calculated using the same 21
1050+method as that used by the United States Energy Information Administration 22
1051+and published in its most recent edition of the Natural Gas Annual report for 23
1052+natural gas utilities, as adopted by the commission by rule, and calculated 24
1053+using data from the same calendar year as the United States Energy 25
1054+Information Administration publication to which the investor -owned natural 26
1055+gas utility’s revenue increase is compared, the total amount of revenue 27
1056+increase or decrease for an investor -owned natural gas utility from an annual 28
1057+update to the rider under this subchapter shall not exceed four percent (4%) 29
1058+of each rate class's total revenue. 30
1059+ (ii) If a conflict exists between subdivision (f)(1) 31
1060+of this section and subdivision (f)(2)(D)(i) of this section, subdivision 32
1061+(f)(2)(D)(i) of this section shall control. 33
1062+ (E) The commission shall submit an annual report to the 34
1063+Legislative Council describing: 35
1064+ (i) The strategic investments included in the rider 36 SB307
1065+
1066+ 29 02/25/2025 4:06:48 PM ANS209
1067+for an investor-owned electric utility or an investor -owned natural gas 1
1068+utility; and 2
1069+ (ii) The change in rates resulting from the 3
1070+investor-owned electric utility's and the investor -owned natural gas 4
1071+utility’s annual update to the rider under this subchapter on the investor -5
1072+owned electric utility's or the investor -owned natural gas utility’s rates. 6
1073+ (3) An investor-owned electric utility shall submit an annual 7
1074+report to the commission describing its generation portfolio mix based on the 8
1075+generation capacity mix and on the energy mix. 9
1076+ (4) The commission shall submit an annual report to the 10
1077+Legislative Council describing the generation portfolio mix based on the 11
1078+generation capacity mix and based on the energy mix for each investor -owned 12
1079+electric utility. 13
1080+ (g) Once strategic investments in public utility facilities are 14
1081+complete and in service, an investor -owned electric utility or an investor -15
1082+owned natural gas utility shall: 16
1083+ (1) Reconcile the actual expenditures and any projected amounts 17
1084+included in the rider; 18
1085+ (2) Net any differences in projected amounts and actual 19
1086+expenditures; and 20
1087+ (3) Either: 21
1088+ (A) Reduce the amounts ultimately capitalized by any over -22
1089+collection; or 23
1090+ (B) Recover any under -collection through subsequent years’ 24
1091+rider filings. 25
1092+ (h) For recovery through the rider, an investor -owned electric utility 26
1093+or an investor-owned natural gas utility shall give priority to strategic 27
1094+investments in new electric generation and transmission facilities located in 28
1095+Arkansas, unless: 29
1096+ (1) The investor-owned electric utility or the investor -owned 30
1097+natural gas utility demonstrates, and the commission finds that a strategic 31
1098+investment in new electric generation and transmission facilities located 32
1099+outside of Arkansas provides greater benefits to the investor -owned electric 33
1100+utility's or the investor -owned natural gas utility’s customers in Arkansas 34
1101+than a comparable strategic investment in new electric generation and 35
1102+transmission facilities located in Arkansas; 36 SB307
1103+
1104+ 30 02/25/2025 4:06:48 PM ANS209
1105+ (2) A comparable strategic investment in new electric generation 1
1106+or transmission facility is not available or cannot be constructed in 2
1107+Arkansas; or 3
1108+ (3) A customer or customers contract to pay all or a portion of 4
1109+the cost of the strategic investment in the resource through a special rate 5
1110+contract, a renewable rate schedule, a contribution in aid of construction, 6
1111+or other form of payment. 7
1112+ 8
1113+ 23-4-1306. Authorization to recover strategic investments through 9
1114+rider – Electric distribution cooperative and electric generation and 10
1115+transmission cooperative. 11
1116+ (a) An electric distribution cooperative or an electric generation and 12
1117+transmission cooperative may obtain a rider to recover strategic investments 13
1118+if not otherwise recoverable in rates previously approved by the Arkansas 14
1119+Public Service Commission after: 15
1120+ (1) A commission order approving an application under § 23 -3-201 16
1121+et seq. or the Utility Facility Environmental and Economic Protection Act, § 17
1122+23-18-501 et seq. or a notice under § 23 -18-104; or 18
1123+ (2) A commission order approving any other application related 19
1124+to the sighting or prudence of the decision to invest in the new strategic 20
1125+investments. 21
1126+ (b)(1) An electric distribution cooperative or an electric generation 22
1127+and transmission cooperative may elect to file with the commission a rider to 23
1128+recover strategic investments that are not otherwise recoverable in rates 24
1129+previously approved by the commission. 25
1130+ (2) The electric distribution cooperative or the electric 26
1131+generation and transmission cooperative shall provide notice to the Attorney 27
1132+General of the filing of the rider by the electric distribution cooperative 28
1133+or the electric generation and transmission cooperative on the date the 29
1134+electric distribution cooperative or the electric generation and transmission 30
1135+cooperative files the rider with the commission. 31
1136+ (c) An electric distribution cooperative or an electric generation and 32
1137+transmission cooperative may select the date of the first annual filing 33
1138+update, with all subsequent updates to be filed on or by the same day 34
1139+annually as the first filing update. 35
1140+ (d) For a rider under this subchapter, an electric distribution 36 SB307
1141+
1142+ 31 02/25/2025 4:06:48 PM ANS209
1143+cooperative or an electric generation and transmission cooperative shall use 1
1144+a rider test period. 2
1145+ (e)(1) Upon receipt of an electric distribution cooperative’s or an 3
1146+electric generation and transmission cooperative's filing to implement the 4
1147+rider rate schedule and each annual update under this subchapter, the 5
1148+commission shall issue an order approving the rider rate schedule and each 6
1149+annual update to recover strategic investments under this subchapter if the 7
1150+commission determines that the electric distribution cooperative’s or the 8
1151+electric generation and transmission cooperative’s application complies with 9
1152+the provisions of this section and therefore is in the public interest. 10
1153+ (2)(A) Unless the commission determines that approving the 11
1154+electric distribution cooperative's or the electric generation and 12
1155+transmission cooperative's application does not comply with this subchapter, 13
1156+the commission shall enter an order within sixty (60) calendar days following 14
1157+the date of the electric distribution cooperative's or the electric 15
1158+generation and transmission cooperative’s filing. 16
1159+ (B)(i) If the commission determines that approving an 17
1160+application is not in the public interest or otherwise fails to meet the 18
1161+requirements of this section, the commission shall enter an order denying the 19
1162+application. 20
1163+ (ii) In the order entered by the commission under 21
1164+subdivision (e)(2)(B)(i) of this section, the commission shall discuss: 22
1165+ (a) The basis for the commission's findings; 23
1166+and 24
1167+ (b) Any evidence or other information 25
1168+submitted by the electric distribution cooperative or the electric generation 26
1169+and transmission cooperative as part of its application that the commission 27
1170+deems to be insufficient. 28
1171+ (C) Each annual update shall include, for the initial 29
1172+rider test year, the construction work in progress costs that will ultimately 30
1173+be capitalized on which the utility will earn a return, amounts that would 31
1174+otherwise be recorded as allowance for funds used during construction, and 32
1175+any expenses associated with the construction work in progress that will not 33
1176+be capitalized. 34
1177+ (D) The commission shall verify the amounts included in 35
1178+each annual update reflect the amounts authorized for recovery under the 36 SB307
1179+
1180+ 32 02/25/2025 4:06:48 PM ANS209
1181+Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. 1
1182+ (E) The commission shall complete its review of each 2
1183+annual update filing and issue its order within sixty (60) days following the 3
1184+date of the annual update filing. 4
1185+ (F)(i) If the electric distribution cooperative or 5
1186+electric generation and transmission cooperative submits an amended filing 6
1187+remedying the areas of noncompliance identified by the commission in its 7
1188+order, the commission shall enter an order approving the application within 8
1189+ten (10) calendar days following the date of the amended filing unless the 9
1190+commission finds that the filing does not comply with the provisions of this 10
1191+subchapter. 11
1192+ (ii) If the commission finds that the amended filing 12
1193+does not remedy the areas of noncompliance, the commission shall enter an 13
1194+order denying the application. 14
1195+ (iii) In the order entered under subdivision 15
1196+(e)(2)(F)(ii) of this section, the commission shall discuss: 16
1197+ (a) The basis for the commission’s findings; 17
1198+and 18
1199+ (b) Any evidence or other information 19
1200+submitted by the electric distribution cooperative or electric generation and 20
1201+transmission cooperative with its amended filing that the commission finds 21
1202+does not comply with specific provisions of this subchapter. 22
1203+ (G) The process outlined in subdivisions (e)(2)(B) and (F) 23
1204+of this section may continue until the commission finds that: 24
1205+ (i) The electric distribution cooperative's or an 25
1206+electric generation and transmission cooperative’s application complies with 26
1207+this subchapter; 27
1208+ (ii) The electric distribution cooperative or the 28
1209+electric generation and transmission cooperative withdraws its application; 29
1210+or 30
1211+ (iii) The electric distribution cooperative or the 31
1212+electric generation and transmission cooperative appeals the commission's 32
1213+decision. 33
1214+ (H) If the commission fails to issue its order within the 34
1215+time frames stated in this subchapter, the electric distribution 35
1216+cooperative's or the electric generation and transmission cooperative’s 36 SB307
1217+
1218+ 33 02/25/2025 4:06:48 PM ANS209
1219+filing shall become effective by operation of law, subject to completion of 1
1220+the commission’s review under this subchapter. 2
1221+ (f)(1) At the election of the electric distribution cooperative or the 3
1222+electric generation and transmission cooperative, strategic investments shall 4
1223+be recovered through the rider under this subchapter, separate from any rate 5
1224+adjustments by an electric distribution cooperative under § 23 -4-901 et seq., 6
1225+any rate adjustments by an electric generation and transmission cooperative 7
1226+under § 23-4-1101 et seq., any other rider, or otherwise as part of the 8
1227+electric distribution cooperative's or the electric generation and 9
1228+transmission cooperative’s rates approved by the commission. 10
1229+ (2) If elected by an electric distribution cooperative or an 11
1230+electric generation and transmission cooperative, the rider shall remain in 12
1231+effect under this subchapter until the electric distribution cooperative or 13
1232+the electric generation and transmission cooperative decides to withdraw the 14
1233+rider with respect to future cost recovery for strategic investments to be 15
1234+made after the date of the withdrawal. 16
1235+ (g) For the purposes of calculating rates to recover the costs of 17
1236+strategic investments, including rates implemented through an individual 18
1237+customer contract, the commission shall ensure that the rates charged to 19
1238+customers recover the costs of strategic investments in a manner that is 20
1239+consistent with applicable law and in the public interest. 21
1240+ (h) An amount collected through the rider under this subchapter shall 22
1241+be collected subject to refunds pending the completion of the commission's 23
1242+review under this subchapter. 24
1243+ (i) The rider elected by an electric distribution cooperative or an 25
1244+electric generation and transmission cooperative under this subchapter to 26
1245+recover strategic investments is a revenue requirement rider and shall 27
1246+provide an electric distribution cooperative's or an electric generation and 28
1247+transmission cooperative's approved times interest earned ratio, including 29
1248+any amounts to build members equity, for the construction work in progress 30
1249+during construction and return on rate base plus operating expenses once the 31
1250+strategic investments are complete and in service. 32
1251+ (j)(1) An electric distribution cooperative or an electric generation 33
1252+and transmission cooperative shall not accrue an allowance for funds used 34
1253+during construction for strategic investments with costs recovered through 35
1254+the rider. 36 SB307
1255+
1256+ 34 02/25/2025 4:06:48 PM ANS209
1257+ (2) Instead the commission may allow an electric distribution 1
1258+cooperative or an electric generation and transmission cooperative to adjust 2
1259+its revenues through the rider under this subchapter to maintain its 3
1260+authorized times interest earned ratio for expenditures associated with any 4
1261+construction work in progress costs that will ultimately be capitalized or 5
1262+recorded as allowance for funds used during construction when the strategic 6
1263+investments are complete and in service. 7
1264+ (k) The commission may allow an electric distribution cooperative or 8
1265+an electric generation and transmission cooperative to recover through the 9
1266+rider under this subchapter any expenses associated with the construction of 10
1267+strategic investments that will not be capitalized. 11
1268+ (l) In calculating construction work in progress, including actual 12
1269+costs and any projections, the electric distribution cooperative or the 13
1270+electric generation and transmission cooperative shall base all amounts on 14
1271+year-end information not subject to averaging beginning -of-year and end-of-15
1272+year balances. 16
1273+ (m) For the purposes of the rider under this subchapter, the electric 17
1274+distribution cooperative's or the electric generation and transmission 18
1275+cooperative’s times interest earned ratio shall be the times interest earned 19
1276+ratio underlying its currently approved rates, including any additional 20
1277+amounts to build equity of the members of the electric distribution 21
1278+cooperative or the electric generation and transmission cooperative. 22
1279+ (n)(1) On the strategic investments' being complete and in service, 23
1280+the commission shall authorize the electric distribution cooperative or the 24
1281+electric generation and transmission cooperative to adjust its revenues 25
1282+through the rider under this subchapter to maintain its authorized times 26
1283+interest earned ratio for expenditures associated with any construction work 27
1284+in progress costs that will ultimately be capitalized or recorded as 28
1285+allowance for funds used during construction when the strategic investments 29
1286+are complete and in service. 30
1287+ (2) Once the strategic investments are complete and in service, 31
1288+the commission shall authorize the electric distribution cooperative or the 32
1289+electric generation and transmission cooperative to recover through the rider 33
1290+under this subchapter any on -going expenses associated with the strategic 34
1291+investments. 35
1292+ (3) In the electric distribution cooperative's or the electric 36 SB307
1293+
1294+ 35 02/25/2025 4:06:48 PM ANS209
1295+generation and transmission cooperative’s next general rate case proceeding, 1
1296+the commission shall allow the electric distribution cooperative or the 2
1297+electric generation and transmission cooperative to include any capitalized 3
1298+amounts and associated expenses for completed strategic investments in its 4
1299+base rates. 5
1300+ (4)(A) In its next general rate case proceeding, the electric 6
1301+distribution cooperative or the electric generation and transmission 7
1302+cooperative shall move any amounts for any completed strategic investments 8
1303+from the rider under this subchapter into its base rates. 9
1304+ (B) The electric distribution cooperative or the electric 10
1305+generation and transmission cooperative shall continue to recover through the 11
1306+rider under this subchapter the costs and expenses associated with any 12
1307+strategic investments that are not complete and in service. 13
1308+ (o) The revenues from the rider under this subchapter shall be 14
1309+included in calculating the allowed level of any rate increase for electric 15
1310+distribution cooperative rate adjustments under § 23 -4-901 et seq. or 16
1311+electric generation and transmission cooperative rate adjustments under § 23 -17
1312+4-1101 et seq. but shall otherwise be excluded from the revenues included in 18
1313+electric distribution cooperative rate adjustments under § 23 -4-901 et seq. 19
1314+or electric generation and transmission cooperative rate adjustments under § 20
1315+23-4-1101 et seq. 21
1316+ (p) The commission shall authorize an electric distribution 22
1317+cooperative or an electric generation and transmission cooperative to 23
1318+monetize or apply any tax credits or other tax incentives, including without 24
1319+limitation investment tax credits and production tax credits, where possible 25
1320+to reduce the cost of constructing or acquiring any strategic investments for 26
1321+the benefit of members of the electric distribution cooperative or the 27
1322+electric generation and transmission cooperative. 28
1323+ (q)(1) An electric distribution cooperative or an electric generation 29
1324+and transmission cooperative shall evaluate opportunities to seek federal 30
1325+funds and loan programs to reduce the cost of constructing, acquiring, and 31
1326+financing strategic investments if possible, appropriate, and available for 32
1327+the benefit of members of the electric distribution cooperative or the 33
1328+electric generation and transmission cooperative. 34
1329+ (2) If an electric distribution cooperative or an electric 35
1330+generation and transmission cooperative requests and receives federal funding 36 SB307
1331+
1332+ 36 02/25/2025 4:06:48 PM ANS209
1333+to support constructing or acquiring strategic investments, the applicable 1
1334+amount of federal funding shall be deducted from the value of the strategic 2
1335+investments that are capitalized and recoverable through rates charged to 3
1336+members of the electric distribution cooperative or the electric generation 4
1337+and transmission cooperative. 5
1338+ (r) If an electric distribution cooperative or an electric generation 6
1339+and transmission cooperative has revenues above its authorized times interest 7
1340+earned ratio, the electric distribution cooperative or the electric 8
1341+generation and transmission cooperative shall not be required to adjust rates 9
1342+if the electric distribution cooperative or the electric generation and 10
1343+transmission cooperative can demonstrate that it has plans to invest in 11
1344+strategic investments that would qualify for recovery through the rider in 12
1345+amounts equal to or greater than the amount above the authorized times 13
1346+interest earned ratio. 14
1347+ (s) Except as otherwise provided in this subchapter, this section does 15
1348+not alter the powers and authority of the commission. 16
1349+ (t) A commission review of the expenditures associated with strategic 17
1350+investments included in the rider under this subchapter, including evaluating 18
1351+whether or not any costs or expenses are reasonable and prudently incurred, 19
1352+shall be completed within twelve (12) calendar months after the date upon 20
1353+which the electric distribution cooperative or the electric generation and 21
1354+transmission cooperative provides notice that the strategic investments are 22
1355+complete and in service. 23
1356+ (u) An expenditure associated with strategic investments for which an 24
1357+application for approval is pending before the commission as of the effective 25
1358+date of this subchapter shall be eligible for recovery through the rider 26
1359+under this subchapter if: 27
1360+ (1) The costs are not otherwise included in rates approved by 28
1361+the commission before the effective date of this subchapter; and 29
1362+ (2) The electric distribution cooperative or the electric 30
1363+generation and transmission cooperative has an application pending that was 31
1364+filed before the effective date of this subchapter for approval: 32
1365+ (A) To construct a power generation facility outside of 33
1366+the state under § 23 -18-104; 34
1367+ (B) To obtain a certificate of environmental compatibility 35
1368+and public need under the Utility Facility Environmental and Economic 36 SB307
1369+
1370+ 37 02/25/2025 4:06:48 PM ANS209
1371+Protection Act, § 23 -18-501 et seq.; 1
1372+ (C) To obtain a certificate of public convenience and 2
1373+necessity under § 23 -3-201 et seq.; or 3
1374+ (D) For any other application related to the sighting or 4
1375+prudence of the decision to invest in the new strategic investments; and 5
1376+ (4) The commission enters an order after January 1, 2025, 6
1377+approving an application that was filed before the effective date of this 7
1378+subchapter for approval: 8
1379+ (A) To construct a power generation facility outside of 9
1380+the state under § 23 -18-104; 10
1381+ (B) To obtain a certificate of environmental compatibility 11
1382+and public need under the Utility Facility Environmental and Economic 12
1383+Protection Act, § 23 -18-501 et seq.; 13
1384+ (C) To obtain a certificate of public convenience and 14
1385+necessity under § 23 -3-201 et seq.; or 15
1386+ (D) For any other application related to the sighting or 16
1387+prudence of the decision to invest in the new strategic investments. 17
1388+ (v)(1) If a customer pays or multiple customers pay for a portion of 18
1389+any strategic investments through a contribution in aid of construction or 19
1390+through other form of payment, the strategic investments shall continue to be 20
1391+considered strategic investments and classified as part of the electric 21
1392+distribution cooperative's or the electric generation and transmission 22
1393+cooperative’s retail assets and recoverable through the electric distribution 23
1394+cooperative's or the electric generation and transmission cooperative’s 24
1395+retail rates, either in the base rates of the electric distribution 25
1396+cooperative or the electric generation and transmission cooperative, through 26
1397+a rider under this subchapter, or rates otherwise approved by the commission. 27
1398+ (2)(A) A payment by a customer or customers for a portion of any 28
1399+strategic investments through a contribution in aid of construction shall be 29
1400+deducted from the cost of the strategic investments capitalized and recovered 30
1401+through rates. 31
1402+ (B) A payment by a customer or customers through any other 32
1403+forms of payment shall be recorded for ratemaking purposes when the strategic 33
1404+investments are completed and placed into service and shall be recognized as 34
1405+payment over a period not to exceed the life of the strategic investments in 35
1406+a manner that provides comparable benefits for other customers over the life 36 SB307
1407+
1408+ 38 02/25/2025 4:06:48 PM ANS209
1409+of the strategic investments. 1
1410+ 2
1411+ 23-4-1307. Procedure to recover strategic investments through rider — 3
1412+Electric distribution cooperative and electric generation and transmission 4
1413+cooperative. 5
1414+ (a) An electric distribution cooperative or an electric generation and 6
1415+transmission cooperative electing to file with the Arkansas Public Service 7
1416+Commission a rider under this subchapter to recover strategic investments not 8
1417+otherwise included in rates previously approved by the commission, may file 9
1418+an application to implement the rider any time within twelve (12) months 10
1419+after: 11
1420+ (1) A commission order approving an application under § 23 -3-201 12
1421+et seq. or the Utility Facility Environmental and Economic Protection Act, § 13
1422+23-18-501 et seq., or a notice under § 23 -18-104; or 14
1423+ (2) Any other application related to the sighting or prudence of 15
1424+the decision to invest in the strategic investments. 16
1425+ (b)(1) An electric distribution cooperative or an electric generation 17
1426+and transmission cooperative shall file an annual update to the rider under 18
1427+this subchapter to reflect the annual expenditures plus an update to any 19
1428+projections included in the rider under this subchapter to recover strategic 20
1429+investments. 21
1430+ (2) An electric distribution cooperative’s or an electric 22
1431+generation and transmission cooperative’s recovery through the rider shall be 23
1432+limited to the amounts identified by the electric distribution cooperative or 24
1433+the electric generation and transmission cooperative in the proceeding in 25
1434+which the commission approved the strategic investments unless a greater 26
1435+amount is subsequently authorized by the commission. 27
1436+ (c) The annual update required under subdivision (b)(1) of this 28
1437+section shall include the amounts stated in this section for strategic 29
1438+investments following subsequent orders from the commission approving 30
1439+strategic investments. 31
1440+ (d) An electric distribution cooperative or an electric generation and 32
1441+transmission cooperative shall notify the commission of any significant 33
1442+delays or material changes in the construction schedule or cost of any 34
1443+strategic investments approved by the commission under § 23 -3-201 et seq., § 35
1444+23-18-104, or the Utility Facility Environmental and Economic Protection Act, 36 SB307
1445+
1446+ 39 02/25/2025 4:06:48 PM ANS209
1447+§ 23-18-501 et seq., from the information available to the commission at the 1
1448+time of its approval. 2
1449+ (e)(1) An electric distribution cooperative or an electric generation 3
1450+and transmission cooperative shall remove from the rider under this 4
1451+subchapter the cost of any strategic investments that are abandoned before 5
1452+completion or for which construction has been indefinitely suspended unless 6
1453+the commission determines, based on substantial evidence provided by the 7
1454+electric distribution cooperative or the electric generation and transmission 8
1455+cooperative, that: 9
1456+ (A) The costs were reasonable and prudently incurred at 10
1457+the time those costs were incurred; 11
1458+ (B) Continued recovery through the rider under this 12
1459+subchapter remains reasonable versus recovery through rates otherwise; 13
1460+ (C) The circumstance of the abandonment before completion 14
1461+or indefinite construction suspension is reasonable; or 15
1462+ (D) A customer or customers have paid all or a portion of 16
1463+the cost of the strategic investments through a contribution in aid of 17
1464+construction, special rate contract, or other form of payment. 18
1465+ (2) Upon removal of any costs for strategic investments that are 19
1466+abandoned or for which construction has been indefinitely suspended, an 20
1467+electric distribution cooperative or an electric generation and transmission 21
1468+cooperative may seek recovery of those costs through rates if the commission 22
1469+determines, based on substantial evidence provided by the electric 23
1470+distribution cooperative or the electric generation and transmission 24
1471+cooperative, that: 25
1472+ (A) The costs were reasonable and prudently incurred at 26
1473+the time those costs were incurred; 27
1474+ (B) The circumstance of the abandonment before completion 28
1475+or indefinite construction suspension is reasonable; or 29
1476+ (C) A customer or customers have paid all or a portion of 30
1477+the cost of the strategic investments through a contribution in aid of 31
1478+construction, special rate contract, or other form of payment. 32
1479+ (3)(A) An electric distribution cooperative or an electric 33
1480+generation and transmission cooperative may request recovery of any costs for 34
1481+strategic investments that are abandoned before completion or for which 35
1482+construction has been indefinitely suspended and that are removed from 36 SB307
1483+
1484+ 40 02/25/2025 4:06:48 PM ANS209
1485+recovery through the rider under this subchapter in a separate proceeding. 1
1486+ (B) The commission shall determine: 2
1487+ (i) Whether recovery of those costs is in the public 3
1488+interest; and 4
1489+ (ii) The form and timing of recovery through rates 5
1490+charged to customers. 6
1491+ (f)(1)(A) An electric distribution cooperative’s or an electric 7
1492+generation and transmission cooperative’s total amount of revenue increase 8
1493+from an annual update to the rider under this subchapter shall not result in 9
1494+the electric distribution cooperative’s or the electric generation and 10
1495+transmission cooperative’s rates exceeding a level ten percent (10%) below 11
1496+the national average for all sectors calculated using the same method as that 12
1497+used by the United States Energy Information Administration and published in 13
1498+its most recent editions of the Electric Power Annual report for electric 14
1499+public utilities as adopted by the commission by rule and calculated using 15
1500+data from the same calendar year as the United States Energy Information 16
1501+Administration publication to which the electric distribution cooperative's 17
1502+or the electric generation and transmission cooperative’s revenue increase is 18
1503+compared. 19
1504+ (B) If an electric distribution cooperative or an electric 20
1505+generation and transmission cooperative provides substantial evidence 21
1506+demonstrating that the electric distribution cooperative's or the electric 22
1507+generation and transmission cooperative's rates will remain capable of 23
1508+attracting or retaining economic development opportunities for the state even 24
1509+if the rates exceed a level of ten percent (10%) below national average and 25
1510+that doing so is in the public interest, then the commission shall approve 26
1511+the revenue increase. 27
1512+ (2)(A) If the commission approves a revenue increase for an 28
1513+electric distribution cooperative or an electric generation and transmission 29
1514+cooperative from an annual update to the rider under this subchapter that 30
1515+results in the electric distribution cooperative's or the electric generation 31
1516+and transmission cooperative's rates exceeding a level ten percent (10%) 32
1517+below the national average, the commission shall submit a letter to the 33
1518+cochairs of the Legislative Council notifying the General Assembly that the 34
1519+commission has approved a revenue increase for the electric distribution 35
1520+cooperative or the electric generation and transmission cooperative from an 36 SB307
1521+
1522+ 41 02/25/2025 4:06:48 PM ANS209
1523+annual update to the rider under this subchapter that has resulted in the 1
1524+electric distribution cooperative’s or the electric generation and 2
1525+transmission cooperative’s total rates, inclusive of all riders, that exceeds 3
1526+a level ten percent (10%) below the national average. 4
1527+ (B) Unless the commission approves an increase in the 5
1528+total amount of revenue increase from an annual update to the rider under 6
1529+this subchapter that exceeds a level ten percent (10%) below the national 7
1530+average for all sectors under subdivision (g)(1)(A) of this section, the 8
1531+electric distribution cooperative or the electric generation and transmission 9
1532+cooperative shall adjust an annual update as required under subsections (a) —10
1533+(c) of this section to include only a revenue increase that results in rates 11
1534+that are ten percent (10%) below the national average. 12
1535+ (C) The commission shall verify that an annual update to 13
1536+the rider under subsections (a) —(c) of this section does not include a 14
1537+revenue increase that results in rates exceeding a level ten percent (10%) 15
1538+below the national average unless it authorizes a greater amount under 16
1539+subdivision (f)(1)(A). 17
1540+ (g) The commission shall submit an annual report to the Legislative 18
1541+Council describing the strategic investments included in the rider under this 19
1542+subchapter for each electric distribution cooperative or electric generation 20
1543+and transmission cooperative and indicating the change in rates resulting 21
1544+from each electric distribution cooperative's or electric generation and 22
1545+transmission cooperative's annual update to the rider under this subchapter 23
1546+on the electric distribution cooperative's or the electric generation and 24
1547+transmission cooperative’s rates. 25
1548+ (h)(1) Each electric distribution cooperative or electric generation 26
1549+and transmission cooperative shall submit an annual report to the commission 27
1550+describing the electric distribution cooperative or the electric generation 28
1551+and transmission cooperative generation portfolio mix based on the generation 29
1552+capacity mix and based on the energy mix. 30
1553+ (2) The commission shall submit an annual report to the 31
1554+Legislative Council describing the generation portfolio mix based on the 32
1555+generation capacity mix and based on the energy mix for an electric 33
1556+distribution cooperative or an electric generation and transmission 34
1557+cooperative. 35
1558+ (i) Once strategic investments that are subject to a notice of intent 36 SB307
1559+
1560+ 42 02/25/2025 4:06:48 PM ANS209
1561+to construct under § 23 -3-201(b)(7) or § 23-18-510(f)(1) is complete and in 1
1562+service, an electric distribution cooperative or an electric generation and 2
1563+transmission cooperative shall: 3
1564+ (1) Reconcile the actual expenditures and any projected amounts 4
1565+included in the rider under this subchapter to recover strategic investments; 5
1566+ (2) Net any differences in projected amounts and actual 6
1567+expenditures; and 7
1568+ (3) Either: 8
1569+ (A) Reduce the amounts ultimately capitalized by any over -9
1570+collection; or 10
1571+ (B) Recover any under -collection through subsequent years’ 11
1572+rider to recover strategic investments filings. 12
1573+ (j) For recovery through the rider, an electric distribution 13
1574+cooperative or an electric generation and transmission cooperative shall give 14
1575+priority to strategic investments in new electric generation and transmission 15
1576+facilities located in Arkansas, unless: 16
1577+ (1) The electric distribution cooperative or the electric 17
1578+generation and transmission cooperative demonstrates, and the commission 18
1579+finds that a strategic investment in new electric generation and transmission 19
1580+facilities located outside of Arkansas provides greater benefits to the 20
1581+electric distribution cooperative's or an electric generation and 21
1582+transmission cooperative’s customers in Arkansas than a comparable strategic 22
1583+investment in new electric generation and transmission facilities located in 23
1584+Arkansas; 24
1585+ (2) A comparable strategic investment in new electric generation 25
1586+or transmission facility is not available or cannot be constructed in 26
1587+Arkansas; or 27
1588+ (3) A customer or customers contract to pay all or a portion of 28
1589+the cost of the strategic investment in the resource through a special rate 29
1590+contract, a renewable rate schedule, a contribution in aid of construction, 30
1591+or other form of payment. 31
1592+ 32
1593+ 23-4-1308. Recovery of advanced energy technologies and feasibility 33
1594+studies under strategic investments rider — Definition. 34
1595+ (a)(1)(A) Upon a finding by the Arkansas Public Service Commission 35
1596+that advanced energy technologies are in the public interest, a public 36 SB307
1597+
1598+ 43 02/25/2025 4:06:48 PM ANS209
1599+utility may elect to pursue strategic investments in the advanced energy 1
1600+technologies and shall recover strategic investments in the advanced energy 2
1601+technologies through the rider obtained under this subchapter after a 3
1602+commission order approving an application under § 23 -3-201 et seq. or § 23-4
1603+18-501 et seq., a notice under § 23 -18-104, or any other application related 5
1604+to the sighting or prudence of the decision to invest in strategic 6
1605+investments. 7
1606+ (B) The commission may find that advanced energy 8
1607+technologies are in the public interest under subdivision (a)(1)(A) of this 9
1608+section by considering whether those advanced energy technologies are: 10
1609+ (i) Technically feasible; 11
1610+ (ii) Commercially and financially viable; and 12
1611+ (iii) Otherwise beneficial to customers in Arkansas. 13
1612+ (2)(A) A facility using advanced energy technologies that are in 14
1613+use by a public utility in Arkansas to serve customers, including without 15
1614+limitation nuclear generation or hydroelectric generation, pumped or run -of-16
1615+river, is not subject to subdivision (a)(1)(A) of this section. 17
1616+ (B) A public utility may recover the costs of feasibility 18
1617+studies and strategic investments in advanced energy technologies that are 19
1618+currently being used or have been used by the public utility in Arkansas to 20
1619+serve customers through a rider obtained under this subchapter. 21
1620+ (3) As used in this section, "advanced energy technologies" 22
1621+includes without limitation: 23
1622+ (A) Modular nuclear reactors; 24
1623+ (B) New technologies for nuclear generation technologies; 25
1624+ (C) Hydrogen-fueled generation technologies; 26
1625+ (D) Geothermal generation technologies; 27
1626+ (E) Renewable natural gas technologies; 28
1627+ (F) Hydrogen technologies; 29
1628+ (G) Biomass generation technologies; 30
1629+ (H) Hydroelectric generation technologies; and 31
1630+ (I) Emissions capture and sequestration equipment or 32
1631+facilities associated with any new or existing major utility facility as 33
1632+defined in the Utility Facility Environmental and Economic Protection Act, § 34
1633+23-18-501 et seq., or other electric transmission facilities or natural gas 35
1634+transmission facilities by a public utility that are: 36 SB307
1635+
1636+ 44 02/25/2025 4:06:48 PM ANS209
1637+ (i) Required by state law or rule or federal 1
1638+regulation; 2
1639+ (ii) Paid for in total or in part by a customer or 3
1640+customers through a special rate contract, a contribution in aid of 4
1641+construction, or other form of payment; or 5
1642+ (iii) Otherwise found by the commission to be in the 6
1643+public interest. 7
1644+ (b) A public utility shall monitor and evaluate advancements in 8
1645+modular nuclear reactors and other new nuclear generation technologies and 9
1646+evaluate the resources as part of the public utility's resource planning once 10
1647+those technologies become in the public interest considering without 11
1648+limitation whether or not those technologies become technically feasible, 12
1649+commercially and financially viable, and otherwise beneficial to customers in 13
1650+Arkansas. 14
1651+ (c) For strategic investments approved by the commission, a public 15
1652+utility may elect to, and upon election may recover strategic investments in 16
1653+advanced energy technologies and feasibility studies through a rider under 17
1654+this section. 18
1655+ (d) Upon election by a public utility, the commission shall authorize 19
1656+a public utility to recover the reasonable and prudently incurred costs of 20
1657+studying the feasibility of advanced energy technologies, including the cost 21
1658+of engineering and economic analyses to assess the technical, financial, and 22
1659+commercial feasibility of implementing and using advanced energy technologies 23
1660+to serve customers in Arkansas through the rider to recover strategic 24
1661+investments under this section for feasibility studies of advanced energy 25
1662+technologies associated with strategic investments that are approved by the 26
1663+commission. 27
1664+ (2) For all other feasibility studies of advanced energy 28
1665+technologies, the commission shall authorize a public utility to recover the 29
1666+reasonable and prudently incurred cost of the feasibility study and shall 30
1667+determine the form and timing of recovery through rates charged to customers. 31
1668+ 32
1669+ 23-4-1309. Authorization of special rate contracts. 33
1670+ (a)(1) An investor-owned electric utility or an investor -owned natural 34
1671+gas utility may enter into a special rate contract to serve a new or existing 35
1672+customer location in Arkansas. 36 SB307
1673+
1674+ 45 02/25/2025 4:06:48 PM ANS209
1675+ (2) If the Arkansas Public Service Commission finds that the 1
1676+special rate contract under subdivision (a)(1) of this section is consistent 2
1677+with the public interest, the commission shall enter an order approving the 3
1678+special rate contract within ninety (90) days after an investor -owned 4
1679+electric utility or an investor -owned natural gas utility files an 5
1680+application for approval. 6
1681+ (3) If the commission finds that a special rate contract in the 7
1682+application is inconsistent with the public interest under subdivision (b)(2) 8
1683+of this section, the commission shall: 9
1684+ (A) Enter an order describing the provisions that are not 10
1685+consistent with the public interest; and 11
1686+ (B) Provide an opportunity for the investor -owned electric 12
1687+utility or the investor -owned natural gas utility to file an amended 13
1688+application to remedy the identified insufficiencies. 14
1689+ (4)(A) If an investor -owned electric utility or an investor -15
1690+owned natural gas utility files an amended application remedying those 16
1691+provisions, the commission shall enter an order approving the special rate 17
1692+contract in the application within thirty (30) days after the investor -owned 18
1693+electric utility's or the investor -owned natural gas utility's filing. 19
1694+ (B) If the commission determines that approving the 20
1695+contract is inconsistent with the public interest, in its order denying 21
1696+approval of the contract, the commission shall include a discussion of: 22
1697+ (i) The basis for the commission's findings; and 23
1698+ (ii) The specific evidence or information provided 24
1699+by the investor-owned electric utility or an investor -owned natural gas 25
1700+utility as part of its application upon which the commission relied to reach 26
1701+that conclusion in its order. 27
1702+ (C)(i) If an investor -owned electric utility or an 28
1703+investor-owned natural gas utility submits additional evidence or other 29
1704+information demonstrating that the contract is in the public interest, the 30
1705+commission shall enter an order approving the contract within thirty (30) 31
1706+days after its filing unless the commission determines that approving the 32
1707+contract is inconsistent with the public interest. 33
1708+ (ii) If the commission determines that approving the 34
1709+contract is inconsistent with the public interest, in its order denying 35
1710+approval of the contract, the commission shall include a discussion of: 36 SB307
1711+
1712+ 46 02/25/2025 4:06:48 PM ANS209
1713+ (a) The basis for the commission's findings; 1
1714+and 2
1715+ (b) The specific evidence or information 3
1716+provided by the investor -owned electric utility or the investor -owned natural 4
1717+gas utility as part of its application upon which the commission relied to 5
1718+reach that conclusion in its order. 6
1719+ (iii) The process outlined in subdivision (a)(4) of 7
1720+this section may continue until the commission finds that: 8
1721+ (a) Approving the contract is in the public 9
1722+interest; 10
1723+ (b) The investor-owned electric utility or the 11
1724+investor-owned natural gas utility withdraws its application; or 12
1725+ (c) The investor-owned electric utility or an 13
1726+investor-owned natural gas utility appeals the commission's decision. 14
1727+ (b)(1) An investor-owned electric utility or an investor -owned natural 15
1728+gas utility shall be authorized to develop and implement rates and other 16
1729+contract provisions to recover all or part of the cost of any strategic 17
1730+investments necessary to serve the customer as part of the special rate 18
1731+contract if the investor -owned electric utility or the investor -owned natural 19
1732+gas utility demonstrates that doing so is in the public interest. 20
1733+ (2) As part of a special rate contract, the investor -owned 21
1734+electric utility or the investor -owned natural gas utility is authorized to 22
1735+set forth customer rates and other contract terms attributable to all or part 23
1736+of the cost of any strategic investments through various cost recovery 24
1737+methods, including without limitation: 25
1738+ (A) A contribution in aid of construction; 26
1739+ (B) Any other contribution toward the cost of the 27
1740+strategic investments; 28
1741+ (C) As part of the customer's monthly rate; 29
1742+ (D) A customer prepayment or other charge; 30
1743+ (E) Prepaid allowance for funds used during construction; 31
1744+or 32
1745+ (F) As part of a minimum bill provision. 33
1746+ (c) An electric cooperative corporation that is established under the 34
1747+Electric Cooperative Corporation Act, § 23 -18-301 et seq., including any 35
1748+electric generation and transmission cooperative, may facilitate the recovery 36 SB307
1749+
1750+ 47 02/25/2025 4:06:48 PM ANS209
1751+of all or part of the cost in subsections (a) and (b) of this section through 1
1752+one (1) or more riders under this subchapter. 2
1753+ (d) This section does not alter or diminish the commission’s authority 3
1754+over an electric utility’s allocated service territory, including without 4
1755+limitation where the commission has authorized an electric utility to serve 5
1756+within a municipality, territorial district, or other geographic area. 6
19311757 7
1932- SECTION 17. Arkansas Code § 23 -18-104 is amended to read as follows: 8
1933- 23-18-104. Construction of power -generating facilities outside the 9
1934-state Arkansas. 10
1935- (a) No Except as provided under subsection (c) of this section, an 11
1936-electric public utility subject to the jurisdiction of the Arkansas Public 12
1937-Service Commission shall not commence construction of any power-generating 13
1938-electric generating facility that is a major utility facility to be located 14
1939-outside the boundaries of this state without the express written approval of 15
1940-the commission. 16
1941- (b)(1) Any An electric public utility proposing such construction 17
1942-shall render adequate written notice to the commission of its intent in order 18
1943-that the commission may conduct any germane inspection, investigation, public 19
1944-hearing, or take any other action deemed appropriate by the commission. 20
1945- (2) An electric public utility or natural gas public utility 21
1946-shall provide notice to the commission of its intent to recover any strategic 22
1947-investments, as defined under § 23 -4-1303, subject to the Generating Arkansas 23
1948-Jobs Act of 2025, § 23 -4-1301 et seq., as part of a public utility's notice 24
1949-under this section or application to construct an electric generation 25
1950-facility under this subchapter. 26
1951- (c) Failure on the part of any electric public utility to obtain prior 27
1952-approval of the commission, as established in this section, shall constitute 28
1953-grounds for disallowance by the commission of all costs and expenses 29
1954-associated with the construction and subsequent operation of the facility 30
1955-when computing the electric public utility's cost of service for purposes of 31
1956-any rate-making proceedings. 32
1957- (d)(1) If the commission determines that approving an electric public 33
1958-utility's application to construct an electric generating facility located 34
1959-outside of Arkansas that is a major utility facility is consistent with the 35
1960-public interest, the commission shall enter an order granting approval of the 36 As Engrossed: S3/11/25 SB307
1961-
1962- 50 03-11-2025 17:15:03 ANS209
1963-
1964-
1965-electric public utility's application within six (6) months after the 1
1966-electric public utility submits its notice of intent to construct electric 2
1967-generating facilities under this section. 3
1968- (2)(A) If the commission determines that granting approval of an 4
1969-application to construct an electric generating facility located outside of 5
1970-Arkansas that is a major utility facility is not in the public interest, the 6
1971-commission shall enter an order. 7
1972- (B) In the order entered by the commission under 8
1973-subdivision (d)(2)(A) of this section, the commission shall discuss: 9
1974- (i) The basis for the commission's determination; 10
1975-and 11
1976- (ii) Any evidence or other information submitted by 12
1977-the electric public utility as part of its notice or application upon which 13
1978-that the commission relied to reach that determination. 14
1979- (3)(A)(i) If an electric public utility submits additional 15
1980-evidence or other information demonstrating that the construction of an 16
1981-electric generating facility located outside of Arkansas that is a major 17
1982-utility facility is reasonable, necessary, and in the public interest, then 18
1983-the commission shall enter an order granting its approval within thirty (30) 19
1984-days after the date of the electric public utility’s filing. 20
1985- (ii)(a) If the commission finds that the electric 21
1986-public utility’s filing fails to comply with this subchapter, the commission 22
1987-shall enter an order. 23
1988- (b) In the order entered by the commission 24
1989-under subdivision (d)(3)(A)(ii)(a) of this section, the commission shall 25
1990-discuss: 26
1991- (1) The basis for the commission's 27
1992-findings; and 28
1993- (2) Any evidence or other information 29
1994-submitted by the electric public utility as part of its notice or application 30
1995-that the commission finds did not comply with this subchapter. 31
1996- (B) The process described in subdivision (d)(2) of this 32
1997-section and this subdivision (d)(3) may continue until the commission finds 33
1998-that: 34
1999- (i) The electric public utility’s application 35
2000-complies with this subchapter; 36 As Engrossed: S3/11/25 SB307
2001-
2002- 51 03-11-2025 17:15:03 ANS209
2003-
2004-
2005- (ii) The electric public utility withdraws its 1
2006-application; or 2
2007- (iii) The electric public utility appeals the 3
2008-commission's decision under § 23-2-423. 4
2009- (d)(e) Any electric public utility which does not own in whole or in 5
2010-part another electric public utility and which is not owned in whole or in 6
2011-part by a holding company and which derives less than twenty -five percent 7
2012-(25%) of its total revenues from Arkansas customers is exempt from the 8
2013-provisions of this section. 9
2014- 10
2015- SECTION 18. Arkansas Code § 23 -18-202, concerning the jurisdiction of 11
2016-the Arkansas Public Service Commission, is amended to add an additional 12
2017-subsection to read as follows: 13
2018- (c) An approval shall not be required from the commission for 14
2019-borrowings, loan contracts, notes, mortgages, or guarantees from other public 15
2020-or private sources that have been approved by a majority of the board of 16
2021-directors of an electric cooperative corporation formed under the Electric 17
2022-Cooperative Corporation Act, § 23 -18-301 et seq. 18
2023- 19
2024- SECTION 19. Arkansas Code § 23 -18-502(a), concerning the legislative 20
2025-findings under the Utility Facility Environmental and Economic Protection 21
2026-Act, is amended to add an additional subdivision to read as follows: 22
2027- (4) Furthermore, it is necessary to reform the certification 23
2028-process for construction of major utility facilities under this subchapter to 24
2029-expedite the certification process and reduce the regulatory and 25
2030-administrative burdens associated with the certification process. 26
2031- 27
2032- SECTION 20. Arkansas Code § 23 -18-503, concerning the definitions used 28
2033-under the Utility Facility Environmental and Economic Protection Act, is 29
2034-amended to add additional subdivisions to read as follows: 30
2035- (16) "Gas transmission line" means a natural gas pipeline or 31
2036-connected series of natural gas pipelines, other than a gathering line, that: 32
2037- (A) Transports gas from a gathering pipeline or natural 33
2038-gas storage facility to a distribution center or to a large volume customer 34
2039-using similar volumes of gas as a distribution center and is not located 35
2040-downstream from a distribution center; 36 As Engrossed: S3/11/25 SB307
2041-
2042- 52 03-11-2025 17:15:03 ANS209
2043-
2044-
2045- (B) Has a maximum allowable operating pressure of twenty 1
2046-percent (20%) or more of specified minimum yield strength; 2
2047- (C) Transports gas within a storage field; or 3
2048- (D) Is voluntarily or otherwise designated by the operator 4
2049-as a transmission pipeline; and 5
2050- (17) "Strategic investments" means the same as defined in § 23 -6
2051-4-1303. 7
2052- 8
2053- SECTION 21. Arkansas Code § 23 -18-503(6), concerning the definition of 9
2054-"major utility facility" under the Utility Facility Environmental and 10
2055-Economic Protection Act, is amended to read as follows: 11
2056- (6) “Major utility facility” means: 12
2057- (A) An A single electric generating plant and associated 13
2058-transportation and storage facilities for fuel and other facilities designed 14
2059-for or capable of operation at a capacity of fifty megawatts (50 MW) or more; 15
2060- (B) For the sole purpose of requiring an environmental 16
2061-impact statement under this subchapter, an electric transmission line and 17
2062-associated facilities including substations of: 18
2063- (i) A design voltage of one hundred kilovolts (100 19
2064-kV) or more and extending a distance of more than ten (10) miles; or 20
2065- (ii) A design voltage of one hundred seventy 21
2066-kilovolts (170 kV) or more and extending a distance of more than one (1) 22
2067-mile; or 23
2068- (C) For the sole purpose of requiring an environmental 24
2069-impact statement under this subchapter, a A gas transmission line and 25
2070-associated facilities designed for or capable of transporting gas at 26
2071-pressures in excess of one hundred twenty -five pounds per square inch (125 27
2072-psi) and extending a distance of more than one (1) mile five (5) miles except 28
2073-gas pipelines devoted solely to the gathering of gas from gas wells 29
2074-constructed within the limits of any gas field as defined by the Oil and Gas 30
2075-Commission; 31
2076- 32
2077- SECTION 22. Arkansas Code § 23 -18-504(a), concerning exemptions for a 33
2078-major utility facility under the Utility Facility Environmental and Economic 34
2079-Protection Act, is amended to read as follows: 35
2080- (a)(1) This subchapter does not apply to a major utility facility: 36 As Engrossed: S3/11/25 SB307
2081-
2082- 53 03-11-2025 17:15:03 ANS209
2083-
2084-
2085- (1)(A) That is located outside of Arkansas; 1
2086- (B) For which, before July 24, 1973, an application for 2
2087-the approval of the major utility facility was made to any federal, state, 3
2088-regional, or local governmental agency that possesses the jurisdiction to 4
2089-consider the matters prescribed for finding and determination in § 23 -18-5
2090-519(a) and (b); 6
2091- (2)(C) For which, before July 24, 1973, the Arkansas 7
2092-Public Service Commission issued a certificate of convenience and necessity 8
2093-or otherwise approved the construction of the major utility facility; 9
2094- (3)(D) Over which an agency of the federal government has 10
2095-exclusive jurisdiction; 11
2096- (4)(E) A majority of which is owned by one (1) or more 12
2097-exempt wholesale generators as defined in § 23 -1-101(5); 13
2098- (5)(F) That is a major utility facility for generating 14
2099-electric energy, if the majority of the major utility facility is owned by 15
2100-any person, including without limitation a public utility that will not 16
2101-recover the cost of the major utility facility in rates subject to regulation 17
2102-by the commission; or 18
2103- (6)(G) That is a gas pipeline of less than five (5) miles 19
2104-in length constructed: 20
2105- (A)(i) Primarily for serving a single customer or a 21
2106-group of customers that is under common ownership or control; 22
2107- (B)(ii) For use by the customer or group of 23
2108-customers that have entered into a lease to facilitate the issuance of bonds 24
2109-under Title 14, Chapter 164 of this Code; and 25
2110- (C)(iii) Entirely on land: 26
2111- (i)(a) Owned by the customer or group of 27
2112-customers to be served; or 28
2113- (ii)(b) Leased by the customer or group of 29
2114-customers to be served. 30
2115- 31
2116- SECTION 23. Arkansas Code § 23 -18-508 is amended to read as follows: 32
2117- 23-18-508. Rules. 33
2118- (a) The Arkansas Public Service Commission shall have and is granted 34
2119-the power and authority to make and amend from time to time after reasonable 35
2120-notice and hearing reasonable rules establishing exemptions from some or all 36 As Engrossed: S3/11/25 SB307
2121-
2122- 54 03-11-2025 17:15:03 ANS209
2123-
2124-
2125-of the requirements of this subchapter for the construction, reconstruction, 1
2126-or expansion of any major utility facility which is unlikely to have major 2
2127-adverse environmental or economic impact by reason of length, size, location, 3
2128-available space, or right -of-way on or adjacent to existing utility 4
2129-facilities, and similar reasons. 5
2130- (b) The commission shall: 6
2131- (1) Initiate a proceeding to modify any existing rules necessary 7
2132-to administer this subchapter and any other applicable exemptions under this 8
2133-subchapter; and 9
2134- (2) Enter an order modifying any existing rules on or before 10
2135-March 31, 2026. 11
2136- (c) An electric or natural gas public utility shall be authorized to 12
2137-file an application under this section after the effective date of this act 13
2138-before the commission completes any modification of its rules necessary to 14
2139-carry out this section. 15
2140- 16
2141- SECTION 24. Arkansas Code § 23 -18-510 is amended to read as follows: 17
2142- 23-18-510. Certificate of environmental compatibility and public need 18
2143-— Requirement — Exceptions. 19
2144- (a)(1) Except for persons exempted as provided in subsection (c) of 20
2145-this section and § 23 -18-504(a) and § 23-18-508, a person shall not begin 21
2146-construction of a major utility facility in the state without first obtaining 22
2147-a certificate of environmental compatibility and public need for the major 23
2148-utility facility from the Arkansas Public Service Commission. 24
2149- (2)(A) The replacement, reconfiguration, or expansion of an 25
2150-existing transmission facility with a similar facility in substantially the 26
2151-same location or the rebuilding, upgrading, modernizing, or reconstruction 27
2152-for the purposes of increasing capacity or reusing a generation or 28
2153-transmission interconnection shall not constitute construction of a major 29
2154-utility facility if no increase in width of right -of-way is required. 30
2155- (B) In the instance of a generation facility that would 31
2156-meet the requirements of subdivision (a)(2)(A) of this section but for an 32
2157-increase in the width of the right -of-way caused by replacement, 33
2158-reconfiguration, or expansion of a transmission or related facility, the 34
2159-commission shall consider the generation facility separately from any 35
2160-transmission or related facilities to be under separate construction. 36 As Engrossed: S3/11/25 SB307
2161-
2162- 55 03-11-2025 17:15:03 ANS209
2163-
2164-
2165- (b)(1) An entity, including without limitation a person, public 1
2166-utility, utility, regional transmission organization, municipality, merchant 2
2167-transmission provider, merchant generator, or other entity, whether regulated 3
2168-or not by the commission, shall not begin construction of an electric 4
2169-transmission line and associated facilities, as described in § 23 -18-5
2170-503(6)(B), within a national interest electric transmission corridor without 6
2171-first obtaining a certificate of environmental compatibility and public need 7
2172-for the facility from the commission. 8
2173- (2) An electric public utility or a natural gas public utility 9
2174-shall provide notice to the commission of its intent to construct to recover 10
2175-any strategic investments, as defined under § 23 -4-1303, subject to the 11
2176-Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq., as part of a 12
2177-public utility's application under the Utility Facility Environmental and 13
2178-Economic Protection Act, § 23 -18-501 et seq. 14
2179- (c) This subchapter does not require a certificate of environmental 15
2180-compatibility and public need or an amendment of such a certificate for: 16
2181- (1) Reconstruction, alteration, or relocation of a major utility 17
2182-facility that must be reconstructed, altered, or relocated because of the 18
2183-requirements of a federal, state, or county governmental body or agency for 19
2184-purposes of highway transportation, public safety, or air and water quality; 20
2185-or 21
2186- (2) An electric transmission line and associated facilities 22
2187-including substations of a design voltage of one hundred kilovolts (100 kV) 23
2188-or more to be constructed or operated by a municipal electric utility system 24
2189-that is located within the territorial limits of the municipal electric 25
2190-utility system. 26
2191- (d) An entity granted a certificate of environmental compatibility and 27
2192-public need pursuant to subsection (b) of this section shall have the right 28
2193-of eminent domain as provided by Arkansas law for the limited purpose of 29
2194-constructing the certificated electric transmission line and associated 30
2195-facilities, as described in § 23 -18-503(6)(B), to the extent that the 31
2196-facility is located within a national interest electric transmission 32
2197-corridor. 33
2198- (e)(1) Strategic investments in major utility facilities under § 23 -34
2199-18-503(6)(A) located on the same or adjacent property or in the same rights -35
2200-of-way or adjacent rights -of-way by a public utility are exempt from this 36 As Engrossed: S3/11/25 SB307
2201-
2202- 56 03-11-2025 17:15:03 ANS209
2203-
2204-
2205-subchapter but shall be subject to the requirements of § 23 -3-201 et seq. 1
2206- (2) The purchase of a major utility facility constructed by a 2
2207-third party for that third party, upon completion of construction or at any 3
2208-time after completion of construction, by a public utility is exempt from 4
2209-this subchapter but shall be subject to the requirements of § 23 -3-201 et 5
2210-seq. 6
2211- (3) Except as provided in this section, this section does not 7
2212-alter the powers and authority of the commission. 8
2213- 9
2214- SECTION 25. Arkansas Code § 23 -18-513 is amended to read as follows: 10
2215- 23-18-513. Application for certificate — Service or notice of 11
2216-application. 12
2217- (a) Each public utility filing an application for a certificate of 13
2218-environmental compatibility and public need shall be accompanied by proof of 14
2219-service of a copy of the application on provide notice of its application as 15
2220-the Arkansas Public Service Commission may require. 16
2221- (b) Each application submitted under subsection (a) of this section 17
2222-shall be accompanied by proof of notice of the application to : 18
2223- (1) The mayor of each municipality; 19
2224- (2) The county judge; 20
2225- (3) The chair of the county planning board, if any; 21
2226- (4) Any head of a governmental agency charged with the duty of 22
2227-protecting the environment or of planning land use, upon which the Arkansas 23
2228-Public Service Commission has by rule or order directed that service be made, 24
2229-in the area in which any portion of such facility is to be located, both as 25
2230-primarily and as alternatively proposed; 26
2231- (5) Each member of the General Assembly in whose district the 27
2232-facility or any alternative location listed in the application is to be 28
2233-located; 29
2234- (6) The office of the Governor; and 30
2235- (7) The director or other administrative head of the following 31
2236-state agencies or departments: 32
2237- (A) Division of Environmental Quality; 33
2238- (B) Department of Health; 34
2239- (C) Arkansas Economic Development Commission; 35
2240- (D) Arkansas Department of Transportation; 36 As Engrossed: S3/11/25 SB307
2241-
2242- 57 03-11-2025 17:15:03 ANS209
2243-
2244-
2245- (E) Arkansas State Game and Fish Commission; 1
2246- (F) Arkansas Natural Heritage Commission; 2
2247- (G) Any state agency which may have the authority to 3
2248-assist in financing the applicant's facility; 4
2249- (H) Any other state agency or department which manages or 5
2250-has jurisdiction over state -owned lands on which all or part of the proposed 6
2251-utility facility is to be or may be located; 7
2252- (I) Department of Finance and Administration; 8
2253- (J) State Energy Conservation and Policy Office 9
2254-[abolished]; 10
2255- (K) The office of the Attorney General; and 11
2256- (L)(K) Any other state agency or department designated by 12
2257-Arkansas Public Service Commission rule or order ; and 13
2258- (8) Proof that a copy of the application has been made available 14
2259-for public inspection at all public libraries in each county in which the 15
2260-proposed utility facility is to be or may be located . 16
2261- (b)(c) The copy of the application shall be accompanied by a notice 17
2262-specifying the date on or about which the application is to be filed and a 18
2263-notice that interventions or limited appearances must be filed with the 19
2264-Arkansas Public Service Commission within thirty (30) days after the date set 20
2265-forth as the date of filing, unless good cause is shown pursuant to § 23 -18-21
2266-517. 22
2267- (c)(1)(d)(1) Each application shall also be accompanied by proof that 23
2268-written notice specifying the date on or about which the application is to be 24
2269-filed and the date that interventions or limited appearances must be filed 25
2270-with the Arkansas Public Service Commission, unless good cause is shown 26
2271-pursuant to § 23-18-517, has been sent by certified mail to each owner of 27
2272-real property on the proposed route selected by the public utility on which a 28
2273-major utility facility is to be located or constructed. 29
2274- (2) The written notice required by this subsection shall be 30
2275-directed to the address of the owner of the real property as it appears on 31
2276-the records in the office of the county sheriff or county tax assessor for 32
2277-the mailing of statements for taxes as provided in § 26 -35-705. 33
2278- (d)(1)(e) Each application shall also be accompanied by proof that 34
2279-public notice of the application was given to persons residing in 35
2280-municipalities and counties entitled to receive notice under subsection (a) 36 As Engrossed: S3/11/25 SB307
2281-
2282- 58 03-11-2025 17:15:03 ANS209
2283-
2284-
2285-(b) of this section by the publication in a newspaper having substantial 1
2286-circulation in the municipalities or counties of: 2
2287- (A)(1) A summary of the application; 3
2288- (B)(2) A statement of the date on or about which it is to be 4
2289-filed; and 5
2290- (C)(3) A statement that intervention or limited appearances 6
2291-shall be filed with the Arkansas Public Service Commission within thirty (30) 7
2292-days after the date stated in the notice, unless good cause is shown under § 8
2293-23-18-517. 9
2294- (2)(A)(4) For purposes of this subsection, an environmental 10
2295-impact statement submitted as an exhibit to the application need not be 11
2296-summarized, but the published notice shall include a statement that the 12
2297-impact statements are on file at the office of the Arkansas Public Service 13
2298-Commission and available for public inspection or are available 14
2299-electronically on the Arkansas Public Service Commission's website. 15
2300- (B) The applicant shall also cause copies of the 16
2301-environmental impact statement to be furnished to at least one (1) of its 17
2302-local offices, if any, in the counties in which any portion of the major 18
2303-utility facilities are to be located, both as primarily or as alternatively 19
2304-proposed, to be there available for public inspection. 20
2305- (C) The published notice shall contain a statement of the 21
2306-location of the local offices described in subdivision (d)(2)(B) of this 22
2307-section and the times the impact statements will be available for public 23
2308-inspection. 24
2309- (e)(f) Inadvertent failure of service on or notice to any of the 25
2310-municipalities, counties, governmental agencies, or persons identified in 26
2311-subsections (a) and (c) (b) and (d) of this section may be cured pursuant to 27
2312-orders of the Arkansas Public Service Commission designed to afford such 28
2313-persons adequate notice to enable their effective participation in the 29
2314-proceedings. 30
2315- (f)(g) In addition, after filing, the Arkansas Public Service 31
2316-Commission may require the applicant to serve notice of the application or 32
2317-copies thereof, or both, upon such other persons and file proof thereof, as 33
2318-the Arkansas Public Service Commission may deem appropriate. 34
2319- (g)(h) Where any personal service or notice is required in this 35
2320-section, the service may be made by any officer authorized by law to serve 36 As Engrossed: S3/11/25 SB307
2321-
2322- 59 03-11-2025 17:15:03 ANS209
2323-
2324-
2325-process, by personal delivery, or by certified mail. 1
2326- 2
2327- SECTION 26. Arkansas Code § 23 -18-514 is repealed. 3
2328- 23-18-514. Application for certificate — Commentary by state agencies 4
2329-— Deficiency letters. 5
2330- (a)(1) Promptly after the filing of an application for a certificate 6
2331-of environmental compatibility and public need, the staff of the Arkansas 7
2332-Public Service Commission shall invite comments from all state agencies 8
2333-entitled to service under § 23 -18-513 as to the adequacy of applicant's 9
2334-statements. 10
2335- (2) The invitation to comment shall advise the state agencies 11
2336-that comments must be received within sixty (60) days of the date of mailing 12
2337-or delivery thereof, unless an agency requests for cause a longer period for 13
2338-consideration. 14
2339- (b)(1) Upon review of the comments, if any, if the staff shall 15
2340-determine that the applicant failed to include or adequately develop any 16
2341-relevant environmental or economic aspect of the facility, it shall issue a 17
2342-deficiency letter pointing out in detail all such specific deficiencies in 18
2343-the statements. 19
2344- (2) The deficiency letter shall be prepared and served upon the 20
2345-applicant as promptly as possible and in no event later than twenty (20) days 21
2346-before the date set for the public hearing. 22
2347- (3) The applicant shall promptly respond to any deficiency 23
2348-letter, and the public hearing shall be deferred unless the applicant has 24
2349-responded prior thereto to any deficiency letter. 25
2350- 26
2351- SECTION 27. Arkansas Code § 23 -18-516(a)(1), concerning hearings on 27
2352-applications or amendments, is amended to read as follows: 28
2353- (a)(1) Upon receipt of an application complying with §§ 23 -18-511 — 29
2354-23-18-514 23-18-513, the Arkansas Public Service Commission shall promptly 30
2355-fix a date for the commencement of a public hearing thereon, which date shall 31
2356-be not fewer than forty (40) days nor more than one hundred eighty (180) 32
2357-ninety (90) days after the receipt of the application, and shall conclude the 33
2358-proceedings as expeditiously as practicable. 34
2359- 35
2360- SECTION 28. Arkansas Code § 23 -18-517(a), concerning parties to 36 As Engrossed: S3/11/25 SB307
2361-
2362- 60 03-11-2025 17:15:03 ANS209
2363-
2364-
2365-certification proceedings, is amended to read as follows: 1
2366- (a) The parties to a certification proceeding shall include: 2
2367- (1) The applicant; or 3
2368- (2) Each municipality, county, and government agency or 4
2369-department or other person entitled to receive service of a copy of the 5
2370-application under § 23 -18-513(a) if it has filed with the Arkansas Public 6
2371-Service Commission a notice of intervention as a party within thirty (30) 7
2372-days after service; or 8
2373- (3) A person residing in a municipality or county that is 9
2374-entitled to receive service of a copy of the application under § 23 -18-513(a) 10
2375-or any domestic nonprofit corporation formed in whole or in part to promote 11
2376-conservation or natural beauty, to promote energy conservation, to protect 12
2377-the environment, personal health, or other biological values, to represent 13
2378-commercial and industrial groups, or to promote the orderly development of 14
2379-the areas in which the facility is to be located if the: 15
2380- (A) Person or organization has an interest that may be 16
2381-directly affected by the commission's action; 17
2382- (B) Interest is not adequately represented by other 18
2383-parties; and 19
2384- (C) Person A person as defined under § 23 -1-101(8) or 20
2385-corporation that has petitioned the commission for leave to intervene as a 21
2386-party within thirty (30) days after the date given in the public notice as 22
2387-the date of filing the application. 23
2388- 24
2389- SECTION 29. Arkansas Code § 23 -18-519(a), concerning decisions of the 25
2390-Arkansas Public Service Commission and modifications of applications, is 26
2391-amended to read as follows: 27
2392- (a)(1) The Arkansas Public Service Commission shall render a decision 28
2393-upon the record either granting or denying the application as filed or 29
2394-granting it upon such terms, conditions, or modifications of the location, 30
2395-financing, construction, operation, or maintenance of the major utility 31
2396-facility as the commission may deem appropriate. 32
2397- (2) The record may include by reference the findings of the 33
2398-commission in an energy resource declaration -of-need proceeding that the 34
2399-utility needs additional energy supply resources or transmission resources. 35
2400- (3)(A) If the commission determines that granting a certificate 36 As Engrossed: S3/11/25 SB307
2401-
2402- 61 03-11-2025 17:15:03 ANS209
2403-
2404-
2405-of environmental compatibility and public need is in the public interest, it 1
2406-shall enter an order granting a certificate of environmental compatibility 2
2407-and public need within six (6) months after the receipt of the application. 3
2408- (B)(i) If the commission determines that granting a 4
2409-certificate of environmental compatibility and public need is not in the 5
2410-public interest, it shall enter an order. 6
2411- (ii) An order entered under subdivision (a)(3)(B)(i) 7
2412-of this section shall discuss: 8
1758+ 23-4-1310. Authorization for alternative methods of financing. 8
1759+ (a) An electric utility or a natural gas utility may use alternative 9
1760+methods of financing for the purpose of financing strategic investments under 10
1761+this subchapter. 11
1762+ (b) The alternative methods of financing may include without 12
1763+limitation: 13
1764+ (1) Sale-leaseback agreements; 14
1765+ (2) Third-party financing or customer financing; or 15
1766+ (3) Other methods of financing. 16
1767+ (c)(1) The Arkansas Public Service Commission shall not disallow, 17
1768+impute alternative values, or adjust the financing under this section unless 18
1769+the commission determines based on substantial evidence that: 19
1770+ (A) The financing is unreasonable; 20
1771+ (B) The costs are not prudently incurred; or 21
1772+ (C) The financing is detrimental to customers. 22
1773+ (2)(A) If an electric utility or a natural gas utility files 23
1774+additional evidence or other information demonstrating that the financing is 24
1775+reasonable and in the public interest, the commission shall enter an order 25
1776+approving the financing within thirty (30) days after its filing if the 26
1777+commission determines that approving the financing is consistent with the 27
1778+public interest. 28
1779+ (B) If the commission determines that approving the 29
1780+financing is inconsistent with the public interest, in its order denying 30
1781+approval of the financing, the commission shall include a discussion of: 31
1782+ (i) The basis for the commission's findings; and 32
1783+ (ii) The specific evidence or information provided 33
1784+by the electric utility or the natural gas utility as part of its application 34
1785+upon which the commission relied to reach that conclusion in its order. 35
1786+ (C)(i) If an electric utility or a natural gas utility 36 SB307
1787+
1788+ 48 02/25/2025 4:06:48 PM ANS209
1789+submits additional evidence or other information demonstrating that the 1
1790+financing is in the public interest, the commission shall enter an order 2
1791+approving the contract within thirty (30) days after its filing unless the 3
1792+commission determines that approving the financing is inconsistent with the 4
1793+public interest. 5
1794+ (ii) If the commission determines that approving the 6
1795+financing is inconsistent with the public interest, in its order denying 7
1796+approval of the financing, the commission shall include a discussion of: 8
24131797 (a) The basis for the commission's findings; 9
24141798 and 10
2415- (b) Any evidence upon which the commission 11
2416-relied to reach that conclusion in its order. 12
2417- (C)(i) If a public utility submits additional evidence 13
2418-demonstrating that the strategic investments in major utility facilities that 14
2419-are subject to this subchapter are reasonable, necessary, and in the public 15
2420-interest, the commission shall enter an order granting the certificate within 16
2421-thirty (30) days after the date of the public utility’s filing unless the 17
2422-commission finds that the strategic investments subject to this subchapter 18
2423-are not reasonable, necessary, or in the public interest. 19
2424- (ii) An order entered under subdivision (a)(3)(C)(i) 20
2425-of this section shall discuss: 21
2426- (a) The basis for the commission's findings; 22
2427-and 23
2428- (b) Any evidence or other information upon 24
2429-which the commission relied to reach that conclusion in its order. 25
2430- (iii) The process outlined in subdivision (a)(3)(B) 26
2431-of this section and this subdivision (a)(3)(C) may continue until the 27
2432-commission finds that: 28
2433- (a) The strategic investments subject to this 29
2434-subchapter are reasonable, necessary, and in the public interest; 30
2435- (b) The public utility withdraws its 31
2436-application; or 32
2437- (c) The public utility appeals the 33
2438-commission's decision under § 23-2-423. 34
2439- 35
2440- SECTION 30. Arkansas Code § 23 -18-521 is amended to read as follows: 36 As Engrossed: S3/11/25 SB307
2441-
2442- 62 03-11-2025 17:15:03 ANS209
2443-
2444-
2445- 23-18-521. Issuance of certificate — Effect. 1
2446- (a) A certificate to construct and operate a major utility facility 2
2447-may be issued only under this subchapter unless a certificate is not required 3
2448-under § 23-18-510(c) or 23-18-510(e). 4
2449- (b)(1) A certificate issued under this subchapter to an applicant is 5
2450-in lieu of and exempts the applicant from the requirements of obtaining a 6
2451-certificate of convenience and necessity under § 23 -3-201 et seq. 7
2452- (2) A certificate issued under this subchapter entitles the 8
2453-applicant to a permit under § 23 -3-501 et seq. without any further notice or 9
2454-hearing if the applicant has filed with the Arkansas Public Service 10
2455-Commission the consent or authorization required by § 23 -3-504(7) and paid 11
2456-the damages stated in § 23 -3-501 et seq. 12
2457- (c) If the applicant is a corporation, before a certificate can be 13
2458-issued under § 23-18-519, a certified copy of the articles of incorporation 14
2459-or charter shall be on file with the commission. 15
2460- 16
2461- SECTION 31. EMERGENCY CLAUSE. It is found and determined by the 17
2462-General Assembly of the State of Arkansas that significant investment in 18
2463-electric public utility infrastructure and natural gas public utility 19
2464-infrastructure is required to enable this state to attract and serve economic 20
2465-development projects across a variety of industries, as well as to continue 21
2466-reliably supporting existing and new customers; that these economic 22
2467-development projects and the continued provision of reliable electric utility 23
2468-services and natural gas utility services are essential to the future of this 24
2469-state; and that this act is immediately necessary because strategic 25
2470-investments in electric public utility infrastructure and natural gas public 26
2471-utility infrastructure support the development of sites available for 27
2472-economic development projects. Therefore, an emergency is declared to exist, 28
2473-and this act being immediately necessary for the preservation of the public 29
2474-peace, health, and safety shall become effective on: 30
2475- (1) The date of its approval by the Governor; 31
2476- (2) If the bill is neither approved nor vetoed by the Governor, 32
2477-the expiration of the period of time during which the Governor may veto the 33
2478-bill; or 34
2479- (3) If the bill is vetoed by the Governor and the veto is 35
2480-overridden, the date the last house overrides the veto. 36 As Engrossed: S3/11/25 SB307
2481-
2482- 63 03-11-2025 17:15:03 ANS209
2483-
2484-
1799+ (b) The specific evidence or information 11
1800+provided by the electric utility or the natural gas utility as part of its 12
1801+application upon which the commission relied to reach that conclusion in its 13
1802+order. 14
1803+ (D) The process outlined in subdivision (c)(2) of this 15
1804+section may continue until the commission finds that: 16
1805+ (i) Approving the financing is in the public 17
1806+interest; 18
1807+ (ii) The electric utility or the natural gas utility 19
1808+withdraws its application; or 20
1809+ (iii) The electric utility or the natural gas 21
1810+utility appeals the commission's decision. 22
1811+ 23
1812+ 23-4-1311. Rules. 24
1813+ (a) The Arkansas Public Service Commission shall amend its rules as 25
1814+required to implement and administer this subchapter. 26
1815+ (b) The commission shall initiate a proceeding to establish any new 27
1816+rules or modify any existing rules necessary to administer this subchapter 28
1817+and any other applicable exemptions under this subchapter. 29
1818+ (c) The commission shall enter an order approving the rules necessary 30
1819+to administer this subchapter before March 31, 2026. 31
1820+ (d) An electric public utility or a natural gas public utility shall 32
1821+be authorized to file an application under this section after the effective 33
1822+date of this act before the commission completes any modification to its 34
1823+rules necessary to carry out this section. 35
1824+ 36 SB307
1825+
1826+ 49 02/25/2025 4:06:48 PM ANS209
1827+ SECTION 17. Arkansas Code § 23 -18-104 is amended to read as follows: 1
1828+ 23-18-104. Construction of power -generating facilities outside the 2
1829+state Arkansas. 3
1830+ (a) No Except as provided under subsection (c) of this section, an 4
1831+electric public utility subject to the jurisdiction of the Arkansas Public 5
1832+Service Commission shall not commence construction of any power-generating 6
1833+electric generating facility that is a major utility facility to be located 7
1834+outside the boundaries of this state without the express written approval of 8
1835+the commission. 9
1836+ (b)(1) Any An electric public utility proposing such construction 10
1837+shall render adequate written notice to the commission of its intent in order 11
1838+that the commission may conduct any germane inspection, investigation, public 12
1839+hearing, or take any other action deemed appropriate by the commission. 13
1840+ (2) An electric public utility or natural gas public utility 14
1841+shall provide notice to the commission of its intent to recover any strategic 15
1842+investments, as defined under § 23 -4-1303, subject to the Generating Arkansas 16
1843+Jobs Act of 2025, § 23 -4-1301 et seq. as part of an application for a 17
1844+certificate of public convenience and necessity under § 23 -3-201 et seq. 18
1845+ (c) Failure on the part of any electric public utility to obtain prior 19
1846+approval of the commission, as established in this section, shall constitute 20
1847+grounds for disallowance by the commission of all costs and expenses 21
1848+associated with the construction and subsequent operation of the facility 22
1849+when computing the electric public utility's cost of service for purposes of 23
1850+any rate-making proceedings. 24
1851+ (d)(1) If the commission determines that approving an electric public 25
1852+utility's application to construct an electric generating facility located 26
1853+outside of Arkansas that is a major utility facility is consistent with the 27
1854+public interest, the commission shall enter an order granting approval of the 28
1855+electric public utility's application within six (6) months after the 29
1856+electric public utility submits its notice of intent to construct electric 30
1857+generating facilities under this section. 31
1858+ (2)(A) If the commission determines that granting approval of an 32
1859+application to construct an electric generating facility located outside of 33
1860+Arkansas that is a major utility facility is not in the public interest, the 34
1861+commission shall enter an order. 35
1862+ (B) In the order entered by the commission under 36 SB307
1863+
1864+ 50 02/25/2025 4:06:48 PM ANS209
1865+subdivision (d)(2)(A) of this section, the commission shall discuss: 1
1866+ (i) The basis for the commission's determination; 2
1867+and 3
1868+ (ii) Any evidence or other information submitted by 4
1869+the electric public utility as part of its notice or application upon which 5
1870+that the commission relied to reach that determination. 6
1871+ (3)(A)(i) If an electric public utility submits additional 7
1872+evidence or other information demonstrating that the construction of an 8
1873+electric generating facility located outside of Arkansas that is a major 9
1874+utility facility is reasonable, necessary, and in the public interest, then 10
1875+the commission shall enter an order granting its approval within thirty (30) 11
1876+days after the date of the electric public utility’s filing. 12
1877+ (ii)(a) If the commission finds that the electric 13
1878+public utility’s filing fails to comply with this subchapter, the commission 14
1879+shall enter an order. 15
1880+ (b) In the order entered by the commission 16
1881+under subdivision (d)(3)(A)(ii)(a) of this section, the commission shall 17
1882+discuss: 18
1883+ (1) The basis for the commission's 19
1884+findings; and 20
1885+ (2) Any evidence or other information 21
1886+submitted by the electric public utility as part of its notice or application 22
1887+that the commission finds did not comply with this subchapter. 23
1888+ (B) The process described in subdivision (d)(2) of this 24
1889+section and this subdivision (d)(3) may continue until the commission finds 25
1890+that: 26
1891+ (i) The electric public utility’s application 27
1892+complies with this subchapter; 28
1893+ (ii) The electric public utility withdraws its 29
1894+application; or 30
1895+ (iii) The electric public utility appeals the 31
1896+commission's decision. 32
1897+ (d)(e) Any electric public utility which does not own in whole or in 33
1898+part another electric public utility and which is not owned in whole or in 34
1899+part by a holding company and which derives less than twenty -five percent 35
1900+(25%) of its total revenues from Arkansas customers is exempt from the 36 SB307
1901+
1902+ 51 02/25/2025 4:06:48 PM ANS209
1903+provisions of this section. 1
1904+ 2
1905+ SECTION 18. Arkansas Code § 23 -18-202, concerning the jurisdiction of 3
1906+the Arkansas Public Service Commission, is amended to add an additional 4
1907+subsection to read as follows: 5
1908+ (c) An approval shall not be required from the commission for 6
1909+borrowings, loan contracts, notes, mortgages, or guarantees from other public 7
1910+or private sources that have been approved by a majority of the board of 8
1911+directors of an electric cooperative corporation formed under the Electric 9
1912+Cooperative Corporation Act, § 23 -18-301 et seq. 10
1913+ 11
1914+ SECTION 19. Arkansas Code § 23 -18-502(a), concerning the legislative 12
1915+findings under the Utility Facility Environmental and Economic Protection 13
1916+Act, is amended to add an additional subdivision to read as follows: 14
1917+ (4) Furthermore, it is necessary to reform the certification 15
1918+process for construction of major utility facilities under this subchapter to 16
1919+expedite the certification process and reduce the regulatory and 17
1920+administrative burdens associated with the certification process. 18
1921+ 19
1922+ SECTION 20. Arkansas Code § 23 -18-503, concerning the definitions used 20
1923+under the Utility Facility Environmental and Economic Protection Act, is 21
1924+amended to add additional subdivisions to read as follows: 22
1925+ (16) "Gas transmission line" means a natural gas pipeline or 23
1926+connected series of natural gas pipelines, other than a gathering line, that: 24
1927+ (A) Transports gas from a gathering pipeline or natural 25
1928+gas storage facility to a distribution center or to a large volume customer 26
1929+using similar volumes of gas as a distribution center and is not located 27
1930+downstream from a distribution center; 28
1931+ (B) Has a maximum allowable operating pressure of twenty 29
1932+percent (20%) or more of specified minimum yield strength; 30
1933+ (C) Transports gas within a storage field; or 31
1934+ (D) Is voluntarily or otherwise designated by the operator 32
1935+as a transmission pipeline; and 33
1936+ (17) "Strategic investments" means the same as defined in § 23 -34
1937+4-1303. 35
1938+ 36 SB307
1939+
1940+ 52 02/25/2025 4:06:48 PM ANS209
1941+ SECTION 21. Arkansas Code § 23 -18-503(6), concerning the definition of 1
1942+"major utility facility" under the Utility Facility Environmental and 2
1943+Economic Protection Act, is amended to read as follows: 3
1944+ (6) “Major utility facility” means: 4
1945+ (A) An A single electric generating plant and associated 5
1946+transportation and storage facilities for fuel and other facilities designed 6
1947+for or capable of operation at a capacity of fifty megawatts (50 MW) or more; 7
1948+ (B) For the sole purpose of requiring an environmental 8
1949+impact statement under this subchapter, an electric transmission line and 9
1950+associated facilities including substations of: 10
1951+ (i) A design voltage of one hundred kilovolts (100 11
1952+kV) or more and extending a distance of more than ten (10) miles; or 12
1953+ (ii) A design voltage of one hundred seventy 13
1954+kilovolts (170 kV) or more and extending a distance of more than one (1) 14
1955+mile; or 15
1956+ (C) For the sole purpose of requiring an environmental 16
1957+impact statement under this subchapter, a A gas transmission line and 17
1958+associated facilities designed for or capable of transporting gas at 18
1959+pressures in excess of one hundred twenty -five pounds per square inch (125 19
1960+psi) and extending a distance of more than one (1) mile five (5) miles except 20
1961+gas pipelines devoted solely to the gathering of gas from gas wells 21
1962+constructed within the limits of any gas field as defined by the Oil and Gas 22
1963+Commission; 23
1964+ 24
1965+ SECTION 22. Arkansas Code § 23 -18-504(a), concerning exemptions for a 25
1966+major utility facility under the Utility Facility Environmental and Economic 26
1967+Protection Act, is amended to read as follows: 27
1968+ (a)(1) This subchapter does not apply to a major utility facility: 28
1969+ (1)(A) That is located outside of Arkansas; 29
1970+ (B) For which, before July 24, 1973, an application for 30
1971+the approval of the major utility facility was made to any federal, state, 31
1972+regional, or local governmental agency that possesses the jurisdiction to 32
1973+consider the matters prescribed for finding and determination in § 23 -18-33
1974+519(a) and (b); 34
1975+ (2)(C) For which, before July 24, 1973, the Arkansas 35
1976+Public Service Commission issued a certificate of convenience and necessity 36 SB307
1977+
1978+ 53 02/25/2025 4:06:48 PM ANS209
1979+or otherwise approved the construction of the major utility facility; 1
1980+ (3)(D) Over which an agency of the federal government has 2
1981+exclusive jurisdiction; 3
1982+ (4)(E) A majority of which is owned by one (1) or more 4
1983+exempt wholesale generators as defined in § 23 -1-101(5); 5
1984+ (5)(F) That is a major utility facility for generating 6
1985+electric energy, if the majority of the major utility facility is owned by 7
1986+any person, including without limitation a public utility that will not 8
1987+recover the cost of the major utility facility in rates subject to regulation 9
1988+by the commission; or 10
1989+ (6)(G) That is a gas pipeline of less than five (5) miles 11
1990+in length constructed: 12
1991+ (A)(i) Primarily for serving a single customer or a 13
1992+group of customers that is under common ownership or control; 14
1993+ (B)(ii) For use by the customer or group of 15
1994+customers that have entered into a lease to facilitate the issuance of bonds 16
1995+under Title 14, Chapter 164 of this Code; and 17
1996+ (C)(iii) Entirely on land: 18
1997+ (i)(a) Owned by the customer or group of 19
1998+customers to be served; or 20
1999+ (ii)(b) Leased by the customer or group of 21
2000+customers to be served. 22
2001+ 23
2002+ SECTION 23. Arkansas Code § 23 -18-508 is amended to read as follows: 24
2003+ 23-18-508. Rules. 25
2004+ (a) The Arkansas Public Service Commission shall have and is granted 26
2005+the power and authority to make and amend from time to time after reasonable 27
2006+notice and hearing reasonable rules establishing exemptions from some or all 28
2007+of the requirements of this subchapter for the construction, reconstruction, 29
2008+or expansion of any major utility facility which is unlikely to have major 30
2009+adverse environmental or economic impact by reason of length, size, location, 31
2010+available space, or right -of-way on or adjacent to existing utility 32
2011+facilities, and similar reasons. 33
2012+ (b) The commission shall: 34
2013+ (1) Initiate a proceeding to modify any existing rules necessary 35
2014+to administer this subchapter and any other applicable exemptions under this 36 SB307
2015+
2016+ 54 02/25/2025 4:06:48 PM ANS209
2017+subchapter; and 1
2018+ (2) Enter an order modifying any existing rules on or before 2
2019+March 31, 2026. 3
2020+ (c) An electric or natural gas public utility shall be authorized to 4
2021+file an application under this section after the effective date of this act 5
2022+before the commission completes any modification of its rules necessary to 6
2023+carry out this section. 7
2024+ 8
2025+ SECTION 24. Arkansas Code § 23 -18-510 is amended to read as follows: 9
2026+ 23-18-510. Certificate of environmental compatibility and public need 10
2027+— Requirement — Exceptions. 11
2028+ (a)(1) Except for persons exempted as provided in subsection (c) of 12
2029+this section and § 23 -18-504(a) and § 23-18-508, a person shall not begin 13
2030+construction of a major utility facility in the state without first obtaining 14
2031+a certificate of environmental compatibility and public need for the major 15
2032+utility facility from the Arkansas Public Service Commission. 16
2033+ (2)(A) The replacement, reconfiguration, or expansion of an 17
2034+existing transmission facility with a similar facility in substantially the 18
2035+same location or the rebuilding, upgrading, modernizing, or reconstruction 19
2036+for the purposes of increasing capacity or reusing a generation or 20
2037+transmission interconnection shall not constitute construction of a major 21
2038+utility facility if no increase in width of right -of-way is required. 22
2039+ (B) In the instance of a generation facility that would 23
2040+meet the requirements of subdivision (a)(2)(A) of this section but for an 24
2041+increase in the width of the right -of-way caused by replacement, 25
2042+reconfiguration, or expansion of a transmission or related facility, the 26
2043+commission shall consider the generation facility separately from any 27
2044+transmission or related facilities to be under separate construction. 28
2045+ (b)(1) An entity, including without limitation a person, public 29
2046+utility, utility, regional transmission organization, municipality, merchant 30
2047+transmission provider, merchant generator, or other entity, whether regulated 31
2048+or not by the commission, shall not begin construction of an electric 32
2049+transmission line and associated facilities, as described in § 23 -18-33
2050+503(6)(B), within a national interest electric transmission corridor without 34
2051+first obtaining a certificate of environmental compatibility and public need 35
2052+for the facility from the commission. 36 SB307
2053+
2054+ 55 02/25/2025 4:06:48 PM ANS209
2055+ (2) An electric public utility or a natural gas public utility 1
2056+shall provide notice to the commission of its intent to construct to recover 2
2057+any strategic investments, as defined under § 23 -4-1303, subject to the 3
2058+Generating Arkansas Jobs Act of 2025, § 23 -4-1301 et seq. as part of an 4
2059+application for a certificate of public convenience and necessity under § 23 -5
2060+3-201 et seq. 6
2061+ (c) This subchapter does not require a certificate of environmental 7
2062+compatibility and public need or an amendment of such a certificate for: 8
2063+ (1) Reconstruction, alteration, or relocation of a major utility 9
2064+facility that must be reconstructed, altered, or relocated because of the 10
2065+requirements of a federal, state, or county governmental body or agency for 11
2066+purposes of highway transportation, public safety, or air and water quality; 12
2067+or 13
2068+ (2) An electric transmission line and associated facilities 14
2069+including substations of a design voltage of one hundred kilovolts (100 kV) 15
2070+or more to be constructed or operated by a municipal electric utility system 16
2071+that is located within the territorial limits of the municipal electric 17
2072+utility system. 18
2073+ (d) An entity granted a certificate of environmental compatibility and 19
2074+public need pursuant to subsection (b) of this section shall have the right 20
2075+of eminent domain as provided by Arkansas law for the limited purpose of 21
2076+constructing the certificated electric transmission line and associated 22
2077+facilities, as described in § 23 -18-503(6)(B), to the extent that the 23
2078+facility is located within a national interest electric transmission 24
2079+corridor. 25
2080+ (e)(1) Strategic investments in major utility facilities under § 23 -26
2081+18-503(7)(A) located on the same or adjacent property or in the same rights -27
2082+of-way or adjacent rights -of-way by a public utility are exempt from this 28
2083+subchapter but shall be subject to the requirements of § 23 -3-201 et seq. 29
2084+ (2) The purchase of a major utility facility constructed by a 30
2085+third party for that third party, upon completion of construction or at any 31
2086+time after completion of construction, by a public utility is exempt from 32
2087+this subchapter but shall be subject to the requirements of § 23 -3-201 et 33
2088+seq. 34
2089+ (3) Except as provided in this section, this section does not 35
2090+alter the powers and authority of the commission. 36 SB307
2091+
2092+ 56 02/25/2025 4:06:48 PM ANS209
24852093 1
2486-/s/J. Dismang 2
2487- 3
2488- 4
2489-APPROVED: 3/20/25 5
2490- 6
2094+ SECTION 25. Arkansas Code § 23 -18-513 is amended to read as follows: 2
2095+ 23-18-513. Application for certificate — Service or notice of 3
2096+application. 4
2097+ (a) Each public utility filing an application for a certificate of 5
2098+environmental compatibility and public need shall be accompanied by proof of 6
2099+service of a copy of the application on provide notice of its application as 7
2100+the Arkansas Public Service Commission may require. 8
2101+ (b) Each application submitted under subsection (a) of this section 9
2102+shall be accompanied by proof of notice of the application to : 10
2103+ (1) The mayor of each municipality; 11
2104+ (2) The county judge; 12
2105+ (3) The chair of the county planning board, if any; 13
2106+ (4) Any head of a governmental agency charged with the duty of 14
2107+protecting the environment or of planning land use, upon which the Arkansas 15
2108+Public Service Commission has by rule or order directed that service be made, 16
2109+in the area in which any portion of such facility is to be located, both as 17
2110+primarily and as alternatively proposed; 18
2111+ (5) Each member of the General Assembly in whose district the 19
2112+facility or any alternative location listed in the application is to be 20
2113+located; 21
2114+ (6) The office of the Governor; and 22
2115+ (7) The director or other administrative head of the following 23
2116+state agencies or departments: 24
2117+ (A) Division of Environmental Quality; 25
2118+ (B) Department of Health; 26
2119+ (C) Arkansas Economic Development Commission; 27
2120+ (D) Arkansas Department of Transportation; 28
2121+ (E) Arkansas State Game and Fish Commission; 29
2122+ (F) Arkansas Natural Heritage Commission; 30
2123+ (G) Any state agency which may have the authority to 31
2124+assist in financing the applicant's facility; 32
2125+ (H) Any other state agency or department which manages or 33
2126+has jurisdiction over state -owned lands on which all or part of the proposed 34
2127+utility facility is to be or may be located; 35
2128+ (I) Department of Finance and Administration; 36 SB307
2129+
2130+ 57 02/25/2025 4:06:48 PM ANS209
2131+ (J) State Energy Conservation and Policy Office 1
2132+[abolished]; 2
2133+ (K) The office of the Attorney General; and 3
2134+ (L)(K) Any other state agency or department designated by 4
2135+Arkansas Public Service Commission rule or order ; and 5
2136+ (8) Proof that a copy of the application has been made available 6
2137+for public inspection at all public libraries in each county in which the 7
2138+proposed utility facility is to be or may be located . 8
2139+ (b)(c) The copy of the application shall be accompanied by a notice 9
2140+specifying the date on or about which the application is to be filed and a 10
2141+notice that interventions or limited appearances must be filed with the 11
2142+Arkansas Public Service Commission within thirty (30) days after the date set 12
2143+forth as the date of filing, unless good cause is shown pursuant to § 23 -18-13
2144+517. 14
2145+ (c)(1)(d)(1) Each application shall also be accompanied by proof that 15
2146+written notice specifying the date on or about which the application is to be 16
2147+filed and the date that interventions or limited appearances must be filed 17
2148+with the Arkansas Public Service Commission, unless good cause is shown 18
2149+pursuant to § 23-18-517, has been sent by certified mail to each owner of 19
2150+real property on the proposed route selected by the public utility on which a 20
2151+major utility facility is to be located or constructed. 21
2152+ (2) The written notice required by this subsection shall be 22
2153+directed to the address of the owner of the real property as it appears on 23
2154+the records in the office of the county sheriff or county tax assessor for 24
2155+the mailing of statements for taxes as provided in § 26 -35-705. 25
2156+ (d)(1)(e) Each application shall also be accompanied by proof that 26
2157+public notice of the application was given to persons residing in 27
2158+municipalities and counties entitled to receive notice under subsection (a) 28
2159+(b) of this section by the publication in a newspaper having substantial 29
2160+circulation in the municipalities or counties of: 30
2161+ (A)(1) A summary of the application; 31
2162+ (B)(2) A statement of the date on or about which it is to be 32
2163+filed; and 33
2164+ (C)(3) A statement that intervention or limited appearances 34
2165+shall be filed with the Arkansas Public Service Commission within thirty (30) 35
2166+days after the date stated in the notice, unless good cause is shown under § 36 SB307
2167+
2168+ 58 02/25/2025 4:06:48 PM ANS209
2169+23-18-517. 1
2170+ (2)(A)(4) For purposes of this subsection, an environmental 2
2171+impact statement submitted as an exhibit to the application need not be 3
2172+summarized, but the published notice shall include a statement that the 4
2173+impact statements are on file at the office of the Arkansas Public Service 5
2174+Commission and available for public inspection or are available 6
2175+electronically on the Arkansas Public Service Commission's website. 7
2176+ (B) The applicant shall also cause copies of the 8
2177+environmental impact statement to be furnished to at least one (1) of its 9
2178+local offices, if any, in the counties in which any portion of the major 10
2179+utility facilities are to be located, both as primarily or as alternatively 11
2180+proposed, to be there available for public inspection. 12
2181+ (C) The published notice shall contain a statement of the 13
2182+location of the local offices described in subdivision (d)(2)(B) of this 14
2183+section and the times the impact statements will be available for public 15
2184+inspection. 16
2185+ (e)(f) Inadvertent failure of service on or notice to any of the 17
2186+municipalities, counties, governmental agencies, or persons identified in 18
2187+subsections (a) and (c) (b) and (d) of this section may be cured pursuant to 19
2188+orders of the Arkansas Public Service Commission designed to afford such 20
2189+persons adequate notice to enable their effective participation in the 21
2190+proceedings. 22
2191+ (f)(g) In addition, after filing, the Arkansas Public Service 23
2192+Commission may require the applicant to serve notice of the application or 24
2193+copies thereof, or both, upon such other persons and file proof thereof, as 25
2194+the Arkansas Public Service Commission may deem appropriate. 26
2195+ (g)(h) Where any personal service or notice is required in this 27
2196+section, the service may be made by any officer authorized by law to serve 28
2197+process, by personal delivery, or by certified mail. 29
2198+ 30
2199+ SECTION 26. Arkansas Code § 23 -18-514 is repealed. 31
2200+ 23-18-514. Application for certificate — Commentary by state agencies 32
2201+— Deficiency letters. 33
2202+ (a)(1) Promptly after the filing of an application for a certificate 34
2203+of environmental compatibility and public need, the staff of the Arkansas 35
2204+Public Service Commission shall invite comments from all state agencies 36 SB307
2205+
2206+ 59 02/25/2025 4:06:48 PM ANS209
2207+entitled to service under § 23 -18-513 as to the adequacy of applicant's 1
2208+statements. 2
2209+ (2) The invitation to comment shall advise the state agencies 3
2210+that comments must be received within sixty (60) days of the date of mailing 4
2211+or delivery thereof, unless an agency requests for cause a longer period for 5
2212+consideration. 6
2213+ (b)(1) Upon review of the comments, if any, if the staff shall 7
2214+determine that the applicant failed to include or adequately develop any 8
2215+relevant environmental or economic aspect of the facility, it shall issue a 9
2216+deficiency letter pointing out in detail all such specific deficiencies in 10
2217+the statements. 11
2218+ (2) The deficiency letter shall be prepared and served upon the 12
2219+applicant as promptly as possible and in no event later than twenty (20) days 13
2220+before the date set for the public hearing. 14
2221+ (3) The applicant shall promptly respond to any deficiency 15
2222+letter, and the public hearing shall be deferred unless the applicant has 16
2223+responded prior thereto to any deficiency letter. 17
2224+ 18
2225+ SECTION 27. Arkansas Code § 23 -18-516(a)(1), concerning hearings on 19
2226+applications or amendments, is amended to read as follows: 20
2227+ (a)(1) Upon receipt of an application complying with §§ 23 -18-511 — 21
2228+23-18-514 23-18-513, the Arkansas Public Service Commission shall promptly 22
2229+fix a date for the commencement of a public hearing thereon, which date shall 23
2230+be not fewer than forty (40) days nor more than one hundred eighty (180) 24
2231+ninety (90) days after the receipt of the application, and shall conclude the 25
2232+proceedings as expeditiously as practicable. 26
2233+ 27
2234+ SECTION 28. Arkansas Code § 23 -18-517(a), concerning parties to 28
2235+certification proceedings, is amended to read as follows: 29
2236+ (a) The parties to a certification proceeding shall include: 30
2237+ (1) The applicant; or 31
2238+ (2) Each municipality, county, and government agency or 32
2239+department or other person entitled to receive service of a copy of the 33
2240+application under § 23 -18-513(a) if it has filed with the Arkansas Public 34
2241+Service Commission a notice of intervention as a party within thirty (30) 35
2242+days after service; or 36 SB307
2243+
2244+ 60 02/25/2025 4:06:48 PM ANS209
2245+ (3) A person residing in a municipality or county that is 1
2246+entitled to receive service of a copy of the application under § 23 -18-513(a) 2
2247+or any domestic nonprofit corporation formed in whole or in part to promote 3
2248+conservation or natural beauty, to promote energy conservation, to protect 4
2249+the environment, personal health, or other biological values, to represent 5
2250+commercial and industrial groups, or to promote the orderly development of 6
2251+the areas in which the facility is to be located if the: 7
2252+ (A) Person or organization has an interest that may be 8
2253+directly affected by the commission's action; 9
2254+ (B) Interest is not adequately represented by other 10
2255+parties; and 11
2256+ (C) Person A person or corporation that has petitioned the 12
2257+commission for leave to intervene as a party within thirty (30) days after 13
2258+the date given in the public notice as the date of filing the application. 14
2259+ 15
2260+ SECTION 29. Arkansas Code § 23 -18-519(a), concerning decisions of the 16
2261+Arkansas Public Service Commission and modifications of applications, is 17
2262+amended to read as follows: 18
2263+ (a)(1) The Arkansas Public Service Commission shall render a decision 19
2264+upon the record either granting or denying the application as filed or 20
2265+granting it upon such terms, conditions, or modifications of the location, 21
2266+financing, construction, operation, or maintenance of the major utility 22
2267+facility as the commission may deem appropriate. 23
2268+ (2) The record may include by reference the findings of the 24
2269+commission in an energy resource declaration -of-need proceeding that the 25
2270+utility needs additional energy supply resources or transmission resources. 26
2271+ (3)(A) If the commission determines that granting a certificate 27
2272+of environmental compatibility and public need is in the public interest, it 28
2273+shall enter an order granting a certificate of environmental compatibility 29
2274+and public need within six (6) months after the receipt of the application. 30
2275+ (B)(i) If the commission determines that granting a 31
2276+certificate of environmental compatibility and public need is not in the 32
2277+public interest, it shall enter an order. 33
2278+ (ii) An order entered under subdivision (a)(3)(B)(i) 34
2279+of this section shall discuss: 35
2280+ (a) The basis for the commission's findings; 36 SB307
2281+
2282+ 61 02/25/2025 4:06:48 PM ANS209
2283+and 1
2284+ (b) Any evidence upon which the commission 2
2285+relied to reach that conclusion in its order. 3
2286+ (C)(i) If a public utility submits additional evidence 4
2287+demonstrating that the strategic investments in major utility facilities that 5
2288+are subject to this subchapter are reasonable, necessary, and in the public 6
2289+interest, the commission shall enter an order granting the certificate within 7
2290+thirty (30) days after the date of the public utility’s filing unless the 8
2291+commission finds that the strategic investments subject to this subchapter 9
2292+are not reasonable, necessary, or in the public interest. 10
2293+ (ii) An order entered under subdivision (a)(3)(C)(i) 11
2294+of this section shall discuss: 12
2295+ (a) The basis for the commission's findings; 13
2296+and 14
2297+ (b) Any evidence or other information upon 15
2298+which the commission relied to reach that conclusion in its order. 16
2299+ (iii) The process outlined in subdivision (a)(3)(B) 17
2300+of this section and this subdivision (a)(3)(C) may continue until the 18
2301+commission finds that: 19
2302+ (a) The strategic investments subject to this 20
2303+subchapter are reasonable, necessary, and in the public interest; 21
2304+ (b) The public utility withdraws its 22
2305+application; or 23
2306+ (c) The public utility appeals the 24
2307+commission's decision. 25
2308+ 26
2309+ SECTION 30. Arkansas Code § 23 -18-521 is amended to read as follows: 27
2310+ 23-18-521. Issuance of certificate — Effect. 28
2311+ (a) A certificate to construct and operate a major utility facility 29
2312+may be issued only under this subchapter unless a certificate is not required 30
2313+under § 23-18-510(c) or 23-18-510(e). 31
2314+ (b)(1) A certificate issued under this subchapter to an applicant is 32
2315+in lieu of and exempts the applicant from the requirements of obtaining a 33
2316+certificate of convenience and necessity under § 23 -3-201 et seq. 34
2317+ (2) A certificate issued under this subchapter entitles the 35
2318+applicant to a permit under § 23 -3-501 et seq. without any further notice or 36 SB307
2319+
2320+ 62 02/25/2025 4:06:48 PM ANS209
2321+hearing if the applicant has filed with the Arkansas Public Service 1
2322+Commission the consent or authorization required by § 23 -3-504(7) and paid 2
2323+the damages stated in § 23 -3-501 et seq. 3
2324+ (c) If the applicant is a corporation, before a certificate can be 4
2325+issued under § 23-18-519, a certified copy of the articles of incorporation 5
2326+or charter shall be on file with the commission. 6
24912327 7
2492- 8
2493- 9
2494- 10
2495- 11
2496- 12
2497- 13
2498- 14
2499- 15
2500- 16
2501- 17
2502- 18
2503- 19
2504- 20
2505- 21
2506- 22
2507- 23
2508- 24
2509- 25
2510- 26
2511- 27
2328+ SECTION 31. EMERGENCY CLAUSE. It is found and determined by the 8
2329+General Assembly of the State of Arkansas that significant investment in 9
2330+electric public utility infrastructure and natural gas public utility 10
2331+infrastructure is required to enable this state to attract and serve economic 11
2332+development projects across a variety of industries, as well as to continue 12
2333+reliably supporting existing and new customers; that these economic 13
2334+development projects and the continued provision of reliable electric utility 14
2335+services and natural gas utility services are essential to the future of this 15
2336+state; and that this act is immediately necessary because strategic 16
2337+investments in electric public utility infrastructure and natural gas public 17
2338+utility infrastructure support the development of sites available for 18
2339+economic development projects. Therefore, an emergency is declared to exist, 19
2340+and this act being immediately necessary for the preservation of the public 20
2341+peace, health, and safety shall become effective on: 21
2342+ (1) The date of its approval by the Governor; 22
2343+ (2) If the bill is neither approved nor vetoed by the Governor, 23
2344+the expiration of the period of time during which the Governor may veto the 24
2345+bill; or 25
2346+ (3) If the bill is vetoed by the Governor and the veto is 26
2347+overridden, the date the last house overrides the veto. 27
25122348 28
25132349 29
25142350 30
25152351 31
25162352 32
25172353 33
25182354 34
25192355 35
25202356 36