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Energetic moves.

Special Rate Contracts With Industrial Customers Are Utilities' Response To Competitive Energy Alternatives

The dominant concerns of the electric utility industry in 1991 were competitive energy alternatives and the environment.

Arkansas electric utilities responded to competitive energy alternatives by negotiating special rate contracts with industrial customers. Rate discounts and incentive pricing are intended to retain or expand existing loads and to attract new loads.

According to Brad Ford, assistant general manager of First Electric Cooperative Corp. in Jacksonville, implementing the Clean Air Act Amendments of 1990 meant vast changes in utility generation planning across the country.

"We are fortunate in Arkansas that we are considered a clean state," Ford says. "That means our generator facilities already have emissions that comply with the standards adopted by the Clean Air Act Amendments.

"As a result, Arkansas electric customers will not be negatively impacted by this new legislation, because electric utilities will not be forced to invest heavily in modifying plants to meet the new, more rigorous emissions requirements."

In 1990, the electric companies regulated by the state Public Service Commission generated revenues of more than $2 billion and serviced more than 1 million customers. Among residential, commercial, industrial, irrigation and other users, the average revenue per customer was $2,243.

While residential customers represent 87 percent of all electric customers, they supplied only 46 percent of the total retail electric revenues.

In contrast, commercial and industrial customers make up only 10 percent and 2 percent of the total number of electric customers, respectively. But, they provide 23 percent and 27 percent of the revenues.

The PSC received 619 complaints from electric customers during 1991. Arkansas Power & Light Co. received the highest number of complaints per 1,000 customers (0.80).

Empire District Electric Co. and Farmers Electric Cooperative Corp. had the most satisfied customer base in 1991, receiving no consumer complaints.

In almost all categories, complaints by electric customers to the PSC were down in 1991. The only area that increased slightly in number of complaints was quality. Service complaints comprised 11.7 percent of all complaints and billing complaints comprised almost 77 percent of all complaints. Yet both areas were down from the previous five years.

Competition In Gas Industry

The dominant issue for the natural gas industry during 1991 was competition. The industry continued its evolution toward a more aggressive natural gas market.

In Congress, major initiatives were introduced to provide for a national energy policy. Many of the proposed bills included measures to simplify and streamline current regulatory requirements for new natural gas pipeline construction. None of the proposed energy legislation was passed last year.

In 1990 the gas companies regulated by the PSC generated revenues of more than $400 million and serviced more than 500,000 customers. Among residential, commercial, industrial and other users, the average revenue per customer was $803.

While residential customers represent 89 percent of all gas customers, they supply only 43 percent of the total revenues. Commercial and industrial customers comprise 11 percent and less than 1 percent of the total number of customers, respectively, providing 24 percent and 14 percent of the total revenues.

The PSC received 161 complaints from gas customers in 1991. Complaints by gas users also were down in all categories except quality. Seventy-two percent of the complaints were related to billing.
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Title Annotation:revenues for public utilities in Arkansas
Author:Fincher, Carol
Publication:Arkansas Business
Article Type:Industry Overview
Date:Oct 5, 1992
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