Senate committee advances bill to speed power projects, prompt debate over co-op oversight and rate impact

LITTLE ROCK — The Arkansas Senate Insurance & Commerce Committee on Monday advanced Senate Bill 307, a measure that would create a formal process for construction work in progress (CWIP) recovery to accelerate new electric generation projects and change how the Arkansas Public Service Commission (PSC) reviews costs and petitions.

Sponsors said the bill aims to help Arkansas attract large industrial and data-center customers that require reliable, new generation while placing limits on utility capital structures and rate impacts. Opponents — including cooperative members and some rural residents — warned the measure would reduce oversight for cooperatives and risk higher bills for low-income and fixed-income households.

Senator Jonathan Dismang, sponsor, told the committee that the state must accept “two truths” about generation: that Arkansas needs new generation and that “generation will cause energy rates to rise.” He said SB 307 provides “a new path” that he believes “is more efficient, provides more oversight than the current structure” and could “ultimately lead to a lower overall cost for the implementation of new generation.”

Senator Matt McKee, a co-sponsor, said the bill is the product of long study and negotiation and described it as “how we protect the rate payers and how we ensure that the cost that they incur…is mitigated.” He told committee members he would answer technical questions and noted the bill’s safeguards were intended to reduce the long-term cost of new generation.

Key provisions described at the hearing

- Construction work in progress (CWIP): Under the bill, utilities can recover a portion of project costs during construction through annual filings and true-ups rather than waiting until a plant is complete and in service. PSC staff described annual reports and an annual audit/true-up…