Nevada County Picayune and Gurdon Times Newspaper Archive

Deregulation not in cards

There will be no deregulation of energy prices in the near future in Arkansas.

According to Bill Dennis, the Rural and Community Liaison with the Arkansas Public Service Commission, the problems other states have had with energy deregulation have caused Arkansas's elected officials to rethink the idea.

Dennis, speaking to the Nevada County Quorum Court at its regular monthly meeting, Monday, Oct. 8, said utilities are a large part of people's budget, and so far, those states following through with deregulation have seen electric bills go up, not down as was hoped.

The problems in California, he said, are well known and the PSC didn't want the same thing to happen in Arkansas.

There is still a big push for deregulation across the nation, with several states having deregulated their energy utilities. However, Dennis said, those who have are experiencing problems.

The original idea, he said, centered around electric companies building new power plants to produce more electricity. This, though, didn't happen.

When no new plants were built, the cost of electricity went up.

Because of these problems, the Arkansas Legislature passed an act to delay deregulation in Arkansas until Oct. 2003, or beyond.

The PSC, he said, requires all parties involved to file reports concerning the issue. This was done in September.

The PSC staff concluded from the reports deregulation was a bad idea for Arkansas at this time as there would be no price benefit for the people.

So far, he said, prices have gone up, not down as hoped, when deregulation occurred elsewhere.

"We could ask the legislature to repeal the acts and wait and see where we should go with deregulation," Dennis said.

With the exception of Texas, states surrounding Arkansas have backed off the idea of deregulation. Texas is having problems because of its actions.

Because of this and the situation deregulation has caused in other states, the PSC has recommended putting deregulation off in Arkansas indefinitely.

As it stands Arkansas has the 10th lowest electric rate in the nation.

However, Entergy, one of the principal suppliers of electricity for the state, is asking the PSC for $155 million to help with the recovery from the ice storm last winter.

The PSC, Dennis said, will look at Entergy's request and determine if the company deserves anything or not. Entergy was required to file a rate case to justify what it's doing.

Other utilities, he said, had problems with the ice storm and got help from the Federal Emergency Management Agency (FEMA) without asking their ratepayers to pick up the tab.

In addition, Entergy customers in Arkansas will be getting a refund from the company because of the Grand Gulf fiasco of the 1980s, when the company was overcharging its customers.

Most residential customers, he said, will get $40 or $50 back.

The biggest problem is with natural gas. Last winter's, he said, were the highest in history coupled with a cold winter nationwide, and the coldest in Arkansas since weather records have been kept.

The new power plants burn natural gas to generate electricity, and gas companies had curtailed drilling operations because the price was low at the time.

The price last winter rose from $2 per mcf to $10 per mcf.

This year, he said, prices should be down, but not where they were before last winter's increase. The problem is gas companies had to "lock in" prices at last year's costs to make sure they would have enough natural gas to meet their needs.

Because of the rising cost of natural gas last winter, Dennis said, about 40,000 people in the state had their gas shut off because they couldn't pay the bills. At this time there are still approximately 30,000 without natural gas.

But, Dennis said, if they will contact their gas company, the company will work with them.

"I encourage everyone to get on levelized billing."

He pointed out Reliant Energy-Arkla will be seeking a rate increase soon because the company has pipes 75 years old needing to be replaced. This, Dennis said, is something the company should have been doing all along.

Utility companies across the state had problems answering calls from customers when the ice storm hit, and hung around awhile.

Because of this, the PSC is requiring utility companies to make changes so they can better serve their customers.

His final topis concerned the telephone utility. Because of the increased demands for phone numbers Arkansas will get a third area code  479.

The 479 area code will be in northwest and north central Arkansas, while Little Rock and central Arkansas retain the 501 area code.

When the change is made, he said, people can use either 501 or 479 for six months, just as they did when the 870 area code was added.

And, he said, the 870 area code will run out of numbers by 2006, which will require yet another area code for the state.

The reason for the increase demands for phone numbers is cellular telephones and computers.