Arkansas OKs Systemwide Deployment Program

Concurring with an electric utility that installation of smart metering equipment throughout its service territory would be in the public interest, the Arkansas Public Service Commission has adopted a settlement detailing an associated investment strategy and customer education plan for the rollout of advanced metering infrastructure (AMI) by the utility, Entergy Arkansas Inc. (EAI). The commission noted that a systemwide transition to AMI would significantly broaden opportunities for both operational efficiencies and related consumer benefits.

However, the commission acknowledged that the AMI program would come at a cost to ratepayers. It reported that when implemented as part of EAI’s formula rate plan, the agreement is estimated to result, on a net basis, in a typical residential customer experiencing an increase of 45 cents per month, or of approximately 0.45% of the total bill. Moreover, the bill impacts would gradually increase over the five-year installation schedule, the commission said, except for the final year, when the additional cost would moderate.

According to the commission, it is estimated that an average residential customer will pay a further 90 cents a month in 2019, then $1.08 more per month in 2020 and 2021, before declining to a monthly adder of 93 cents in 2022 as the rollout nears completion. In approving the stipulation, the commission addressed numerous consumer concerns about such issues as EAI’s enhanced capability to institute remote disconnection of service and extend prepay offers. It also considered questions about the implementation of time-of-use (TOU) rates on a voluntary basis, the overall costeffectiveness of AMI, the design and calculation of opt-out terms and fees, and ratepayer/shareholder risk sharing.

The commission reported that the proffered settlement set forth the following provisions and conditions on those matters:

1. Cost Recovery — AMI deployment costs are to be recouped through a formula rate plan cost recovery rider;
2. Accounting Treatment — The utility is to use a 15-year expected life and apply a straight-line depreciation rate of 6.67%, with retirement of existing meters and handheld devices and transfer of the remaining book value to a regulatory asset, which will be subject to a 15-year period of amortization;
3. Customer Education Plan — The company must develop a multiphased, comprehensive program with performance metrics prior to AMI deployment and consideration of a home energy report feature;
4. Prepay Program — EAI likewise must devise a plan for cooperatively developing a prepay service tariff for commission review and approval;
5. Price-Response Program — The utility is to make an immediate effort to offer a voluntary residential TOU program for commission review and approval;
6. Energy Efficiency and Demand Response Programs — The company must submit for commission review and approval AMI-facilitated programs as part of EAI’s existing energy-efficiency program portfolio;
7. Reconnection Fees for AMI Customers — The utility is to craft a separate “remote reconnect” fee for customers receiving a new smart meter;
8. Evaluation of Peak Load Reduction and Consumption Reduction — The utility is to collaborate in the development of a protocol for measuring and assessing any peak load reduction or decrease in consumption attributed to AMI;
9. Opt-Outs — Relative to those consumers declining to have AMI installed at their premises, EAI is to propose an opt-out plan (with costbased fees), a tariff to implement the opt-out charges, and an initial reconnection fee and tariff; and
10. Cyber-Security Controls — The utility is to work with the other settling parties in documenting that appropriate controls are being implemented and will be in place prior to the AMI rollout.

In deeming the stipulation reasonable, the commission commended the settling parties for taking consumer concerns into account and then coming up with terms to try to ameliorate those reservations. Re Entergy Arkansas, Inc., Docket No. 16-060-U, Order No. 8, Oct. 30, 2017 (Ark.P.S.C.).