Description

Origin

In December of 2010, the Arkansas Public Service Commission (PSC) announced a Sustainable Energy Resource Action Plan for Arkansas. Along with this comprehensive plan, the Commission issued 10 Orders directing the state’s four electric and three natural gas investor-owned utilities to implement the energy efficiency  measures described in the Action Plan. These orders were passed on December 10, 2010.

Order 17 in Docket 08-144-U sets sales reductions targets for both electric and gas utilities. The PSC directed these utilities to file comprehensive energy efficiency plans for 2011, 2012, and 2013 with incremental energy savings. In September of 2013,  by Order No. 7  in Docket No. 13-002-U, the PSC approved a request for an additional year of planning and established higher targets for 2014 (0.9% for electrics and 0.5% for gas utilities). On December 2015, the PSC in its Order No. 30 extended energy efficiency target for for electric and gas efficiency targets till 2019.  

Electric Sales Reduction

• 0.25% in 2011 compared to a 2010 energy sales baseline
• 0.5% in 2012 compared to a 2010 energy sales baseline
• 0.75% in 2013 compared to a 2010 energy sales baseline
• 0.75% in 2014 compared to a 2010 energy sales baseline
• 0.9% in 2015 compared to a 2014 energy sales baseline
• 0.9% in 2016 compared to a 2014 energy sales baseline
• 0.9% in 2017 compared to a 2014 energy sales baseline
• 0.9% in 2018 compared to a 2015 energy sales baseline
• 1.0% in 2019 compared to a 2015 energy sales baseline

Natural Gas Sales Reduction

• 0.2% in 2011 compared to a 2010 energy sales baseline
• 0.3% in 2012 compared to a 2010 energy sales baseline
• 0.4% in 2013 compared to a 2010 energy sales baseline
• 0.4% in 2014 compared to a 2010 energy sales baseline
• 0.5% in 2015 compared to a 2014 energy sales baseline
• 0.5% in 2018 compared to 2015 energy sales baseline
• 0.5% in 2019 compared to 2015 energy sales baseline

Program Administrator Type

Arkansas’ utilities administer the programs to meet the goals.

Cost Effectiveness and Program Evaluation

Arkansas uses the Total Resource Cost test (TRC) as its primary test for evaluating the programs intended to meet the goals. 

Utility Cost Recovery Provisions

Currently, Arkansas’ regulated utilities are permitted to recover their Lost Contribution to Fixed Costs (“LCFC”, often called lost revenues or lost margins). In addition, each utility is permitted to earn a performance-based shareholder incentives of between 4% and 8% of their program spending (based on commensurate 80% to 120% achievement), capped at 10% of the total net benefits generated by said programs.

Special Provisions

In 2013 Act 253 allowed for nonresidential customers with a total aggregate demand of at least 1 MW and multiple facilities that each have a demand greater than 200 kW to opt out of the state’s energy efficiency program. However, Act 78 limited the scope of that opt-out to customers not making any installations in the past five years incentivized or financed by the same utility assessing the charge. Nonresidential customers that opt out must submit affidavits stating that they have or will make investments in accordance with state energy efficiency goals. When a nonresidential customer opts out, the customer does not pay the Energy Efficiency Cost Recovery rider charges, but must give up the option to take advantage of energy efficiency incentive programs.

More information on Arkansas’ energy-efficiency targets is available on the PSC’s online services web site.