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No relief from higher electric bills

By Staff, 09/21/21 10:50 AM

PRESCOTT – There was a mixed bag of news where the electric department was concerned.

Larry Jones, Jr., electrical operations manager, told the Prescott City Council, at its September meeting Monday,  Prescott Water and Light is doing better on collections when people leave. He said meter deposits being based on people’s credit standing has helped. In 2019, he said, 146 left owing roughly $70,000, while in 2020, this dropped to 90 people leaving $38,000 owed. So far this year, he continued, 88 have left owning $17,490. He told the council some of these people are expected to pay their bills.

However, there was also bad news. He pointed out Split Rail has closed and this is a loss of $93,000 a year loss across the board for all city utilities. BFS Diversified is no longer in production at the old rubber plant, which is a loss of $143,000. “We’ve taken a pretty good lick.”

In addition, the city was hit with a $1.9 million bill from Southwest Electric and Power Co. in February. The city paid around $200,000 toward the bill, but has been hit with $31,768 in interest. Jones said the interest stacks up quick. He pointed out the city used 5 million killowatt hours less from January to Aug. this year than the same time last year, yet the city still owed SWEPCO $2.3 million. He pointed out the city’s fuel cost has increased $600,000, as SWEPCO has raised the cost from three cents to seven cents, while PWL is capped out on what it can charge where the fuel charge is concerned. Until it’s paid, he said, the bill will keep accruing and this isn’t sustainable for the city.

These cost increases, he said, have had a definite affect on large consumers. However, he added, the city is seeking an audit concerning the February bill to see if SWEPCO did its part. But, he said, he received a letter from SWEPCO recently stating the cost of lignite and natural gas have gone up, which is why the fuel cost is higher.

City Attorney Glenn Vasser said the Federal Electric Regulatory Commission (FERC) made a favorable ruling for Prescott. However, MISO and SVP have filed on the FERC ruling. If the issue can be taken back to 2013 when it began, he told the council, it would help a lot and the city could get a refund of millions of dollars, otherwise, the city will have to take what it gets if the decision isn’t retroactive.

The city, he continued, has hired an accounting firm, BKD, to audit the Feb. bill from SWEPCO. The firm will be looking to see if SWEPCO did all it could in advance of the winter storm that hit, and whether the utility company acted responsibly under its contract with the city. Additionally, the city is trying to get Arkansas Gov. Asa Hutchinson to consider a grant program for the five communities that received exorbitant bills in Feb. from SWEPCO. He said, realistically, the best Prescott can hope for in this area is to get an interest free loan from the state. State Sen. Larry Teague and other lobbyists have been contacted to help with this issue.

Jones pointed out the energy charge isn’t related to the transmission charges, which are two separate things. This situation, he said, will eat into the department’s budget and the city is at SWEPCO’s mercy with there being nothing the city can do about it at this time. With the higher bills, he continued, the department needs all the excess money it can get.