Senate committee approves bill to let utilities recover construction costs during build, sets oversight limits

The Senate Insurance & Commerce Committee voted to advance Senate Bill 307, a measure that would allow investor‑owned utilities and other qualifying entities to recover construction costs during plant build‑out and creates a framework of oversight, caps and annual reviews intended to limit ratepayer impacts.

Senator Jonathan Disbang, state senator for District 18, who introduced the bill, told the committee the measure accepts two realities: Arkansas needs new generation and new generation will raise energy costs. “This proposal gives us a new path and one that I believe is more efficient, provides more oversight than the current structure that we have, and will ultimately lead into a lower overall cost for the implementation of new generation,” he said.

The measure creates a statutory path for recovery of construction work in progress (CWIP) through a rider and sets multiple guardrails the sponsors and regulators described as consumer protections. The bill: shortens PSC review timelines in some filings from 240 days to 180 days; requires annual filings and “true‑ups” so the Public Service Commission reviews what construction occurred and what costs were recovered; caps a utility’s equity portion for capital structures at 50% (the PSC noted a prior practical cap used in a recent portfolio review was 47%); and limits overall rates so they may not exceed a threshold described in the bill as “10% below the national average” unless the utility petitions the PSC and the commission finds that exceeding the threshold is in the public interest.

Doyle Webb, chairman of the Arkansas Public Service Commission, told the committee the PSC would retain authority to review and adjudicate project filings and would perform annual reviews of CWIP…