Legislative committee advances energy bill to Arkansas House
A House panel on Monday approved a bill that will change the process for constructing power plants in an effort to mitigate expected rate increases for Arkansans.
Searcy Republican Rep. Lance Eaves told the House Committee on Insurance and Commerce utility rates are going up with or without Senate Bill 307 because Arkansas will need to generate or buy more power to provide the energy needed 'to maintain the status quo' when coal plants in Independence and Jefferson counties go offline in a few years.
'I don't want my bill to go up, I don't know that any of us want our bills to go up,' Eaves said. 'But the fact is they're going up whether we run this bill or not because we have to produce power to replace what we're losing and we have to produce more power to try to attract those businesses here that are going to supply jobs.'
The process outlined in the Generating Arkansas Jobs Act of 2025 will be cheaper in the long-term, Eaves said, because it will allow utilities to begin recouping their costs during construction instead of after a power plant is built, as is the case now. The 63-page bill would also give the Arkansas Public Service Commission more oversight of such projects by requiring reviews throughout construction, he said.
Stalled energy bill advances out of Arkansas Senate
Committee members shared concerns about shifting costs onto ratepayers and exactly how much constituents' energy bills would increase. Based on estimates, Eaves said the average utility customer will see a $5 increase on their monthly bill during the first year. He also said that if a company comes to Arkansas and uses 90% of the power generated by a new plant, that company would pay for what they use — the cost would not be shifted onto other ratepayers.
Attracting new industry to the state is another goal of SB 307. Supporters of the bill have said Arkansas is losing out to its neighbors in attracting large data centers, which can bring more jobs to the state, but Eaves said it's about more than data centers.
'The number one export in Arkansas is aerospace-related parts and components, we have a lithium play that's getting ready to happen in south Arkansas, we are likely very possibly going to be the steel capital of the world,' Eaves said. 'All of those use energy, and we don't have enough.'
Allison Thompson, president and CEO of the Economic Development Alliance for Jefferson County, echoed those sentiments in speaking in favor of the bill. Jefferson County is home to the White Bluff Power Plant that's scheduled for closure. As an economic developer, Thompson said she works with new projects coming to the state and one of the first questions she's asked is about power.
'Is it reliable, is it redundant, is there enough of it, and is it available,' she said. 'And when those projects come in, they're not coming in for down the road, they're coming in right now. They're looking right now. Those businesses are making decisions about today.'
Some members of the public who spoke in opposition to the bill voiced concerns about how the rate hikes will impact low-income Arkansans. Others had recommendations for amending specific provisions within the bill.
Southern Renewable Energy Association Executive Director Simon Mahan, for example, said it was 'problematic' that SB 307 explicitly excludes Arkansas-based wind energy from eligibility for cost recovery under the bill's proposed rider system.
'Generally wind energy resources are some of the lowest cost resources,' Mahan said. 'Arkansas, we do believe needs more power, and we shouldn't be restricting the types of power that we can develop sooner rather than later.'
A 135-megawatt project that's under construction in Cross County is expected to become the state's first operational wind farm this summer.
Mahan recommended lawmakers amend the bill to remove this restriction to allow Arkansas-based wind energy to compete 'on an equal footing' with other energy resources, including out-of-state wind, which he said is eligible under the current legislation.
The House committee approved SB 307 on a unanimous voice vote without making amendments. The bill will next be considered by the Arkansas House.
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