HB 1655 Summary

• Amends Arkansas Code § 23-4-410 to allow public utilities and parties in rate proceedings to present evidence regarding requested return on common equity, including quantitative analysis, comparable rates in similar jurisdictions, and financial/business risks, with the commission required to discuss and consider such evidence in its findings.

• Creates new cost allocation requirements (§ 23-4-422) for the Arkansas Public Service Commission to allocate utility costs among customer classes based on actual costs incurred, economic impact considerations, and substantial evidence; includes specific formulas for electric utilities using peak demand methods and natural gas utilities using the 1989 National Association of Regulatory Utility Commissioners manual.

• Establishes a Formula Rate Review Act (Subchapter 12) allowing public utilities to elect annual streamlined rate reviews based on comparison of earned return rate to target return rate, with rate adjustments triggered only if earned return varies by more than 0.5% from target; permits rate adjustments up to 4% per rate class annually.

• Applies new cost allocation provisions to any pending rate change applications when the act becomes effective and exempts electric cooperative corporations from formula rate review requirements.

• Declares an emergency to address changing utility costs and enable utilities to adjust rates responsively while maintaining stable rates and supporting economic development.