Arkansas committee advances bill letting utilities collect construction costs before plants begin operating

Representative Les Eaves, sponsor of Senate Bill 307, told the House Insurance & Commerce Committee that Arkansas must replace retiring capacity and build new generation to remain competitive for large industries and data centers. "We are in a situation now where we are about to lose a significant amount of power ... we're gonna lose about 3.2 gigawatts of power," Eaves said, arguing the bill lets utilities recover construction costs in a way that he said is cheaper for ratepayers over time.

Nut graf: The bill would authorize a construction work-in-progress (CWIP) cost-recovery mechanism and an annual rider that lets regulated utilities begin recovering certain construction costs from customers while a project is under construction. Proponents said quicker recovery reduces long-term rate pressure and helps attract major employers; critics said it shifts financial risk to ratepayers, trims time for Public Service Commission (PSC) review and could lock in costlier resources if procurement is not competitive.

How the bill would work: Under SB 307, a utility seeking to build a "strategic investment" would apply to the Arkansas Public Service Commission for upfront approval of the project and an initial rider rate. The PSC would have a set period to approve or deny the application; if approved, the utility could start collecting a rider to recover specified construction costs during the build.…