Arkansas Electric Co-op eyes rate increase for customers statewide

CRAIGHEAD COUNTY, AR (KAIT) – Customers at Craighead Electric Cooperative and 16 other co-ops across the state may have to pay a little extra to keep their homes cool next summer.

The Arkansas Public Service Commission received a request last week from AECC, or the Arkansas Electric Cooperative Corporation. The company would like to charge more to supply power to its local electric co-ops and their customers.

"The request is approximately $33.4 million," said Forest Kessinger, the AECC manager of rates and forecasting.

Kessinger says the company has recommended raising its wholesale electric rate by five percent, which would provide that $33.4 million. The proposal, however, means the local co-ops would pay more to provide electricity to about 490,000 customers.

The only way the local offices can afford the extra cost is to tack on a little extra to people's monthly electric bills. If the proposal is approved, the average customer would pay an extra $1.50 each month.

"We're always concerned about the Arkansas economy and its impact on our customers," Kessinger said, "but we also make the best long-term decisions that we can for our members.

"The addition of these two power plants and other costs that impact AECC have to be addressed, and we have to recover those costs," he said. "This rate increase is simply an outcome of the best long-term economic planning that we can do."

Kessinger says the company plans to use the additional revenue from this proposed rate hike to bring in two new generating plants into its system.

"These plants have an efficiency such that they can offset higher incremental generation costs and save us $22 million," he said, "which offsets about two-thirds of our requested increase."

As the regulatory body in this matter, the Arkansas Public Service Commission will ultimately decide if the proposed rate hike is approved.

The commission has about 90 days to make their decision, but AECC says the rate increase would not go into effect until January 1, 2013.

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