Insurance & Commerce - Senate
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Bills discussed (13)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
SB307
Act 373
· 3 mentions in transcript, agenda, chapter
Matched: “…e to come to order. Chesorum, uh, we're going to begin with Senate Bill 307. Senator Dismay. You”
|
TO AMEND THE LAW CONCERNING PUBLIC UTILITIES; TO CREATE THE GENERATING ARKANSAS JOBS ACT OF … | J. Dismang | Notification that SB307 is now Act 373 |
|
SB242
Act 344
· 2 mentions in chapter, agenda
Matched: “SB242 Hill TO AMEND THE LAW CONCERNING LOANS INVOLVING THE STOCK…”
|
TO AMEND THE LAW CONCERNING LOANS INVOLVING THE STOCK OF A STATE BANK. | Hill | Notification that SB242 is now Act 344 |
|
HB1193
· 1 mention in agenda
Matched: “AGENDA (Revised 2/26/2025 @ 2:00 PM) Added HB1193 and HB1307 to Re-Referred to Committee Removed HB1405 from…”
|
TO REQUIRE AN INSURER TO INCLUDE A LIENHOLDER ON PAYMENTS MADE UNDER AN INSURANCE POLICY. | Cavenaugh | Died in House at Sine Die adjournment. |
|
HB1238
Act 306
· 1 mention in agenda
Matched: “…IOSIMILAR MEDICINES. DEFERRED BILLS Number Sponsor Subtitle HB1238 Cavenaugh TO AUTHORIZE A MORTGAGOR TO RECOVER FEES IN CERTA…”
|
TO AUTHORIZE A MORTGAGOR TO RECOVER FEES IN CERTAIN CIRCUMSTANCES UNDER THE STATUTORY FORECLOSURE LAW. | Cavenaugh | Notification that HB1238 is now Act 306 |
|
HB1307
Act 308
· 1 mention in agenda
Matched: “AGENDA (Revised 2/26/2025 @ 2:00 PM) Added HB1193 and HB1307 to Re-Referred to Committee Removed HB1405 from Regular Age…”
|
TO ENSURE RESPONSIBLE FUND MANAGEMENT; AND TO AMEND THE UNIFORM PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS … | McAlindon | Notification that HB1307 is now Act 308 |
|
HB1405
Act 309
· 1 mention in agenda
Matched: “…Added HB1193 and HB1307 to Re-Referred to Committee Removed HB1405 from Regular Agenda Senate Committee on Insurance and Comme…”
|
TO AMEND THE STATUTES CONCERNING PROCURERS; AND TO ADD ADDITIONAL REGULATIONS REGARDING THE USE OF … | J. Richardson | Notification that HB1405 is now Act 309 |
|
SB103
Act 425
· 1 mention in agenda
Matched: “…MUM REIMBURSEMENT RATE FOR BREAST RECONSTRUCTION SURGERIES. SB103 C. Penzo TO CREATE THE PHARMACY NONDISCRIMINATION ACT; TO R…”
|
TO CREATE THE PHARMACY NONDISCRIMINATION ACT; TO REQUIRE PHARMACY BENEFITS MANAGERS TO ACCEPT ANY PHARMACY … | C. Penzo | Notification that SB103 is now Act 425 |
|
SB104
Act 514
· 1 mention in agenda
Matched: “…ONABLE TERMS OF PARTICIPATION; AND TO DECLARE AN EMERGENCY. SB104 C. Penzo TO AMEND THE ARKANSAS PHARMACY BENEFITS MANAGER LI…”
|
TO AMEND THE ARKANSAS PHARMACY BENEFITS MANAGER LICENSURE ACT; TO PROTECT PATIENTS' RIGHTS AND ACCESS … | C. Penzo | Notification that SB104 is now Act 514 |
|
SB123
Act 553
· 1 mention in agenda
Matched: “…estrictions designating areas as 'Members and Staff Only'. SB123 G. Leding TO AMEND THE LAW CONCERNING COVERAGE FOR MAMMOGRA…”
|
TO AMEND THE LAW CONCERNING COVERAGE FOR MAMMOGRAMS AND BREAST ULTRASOUNDS. | G. Leding | Notification that SB123 is now Act 553 |
|
SB140
· 1 mention in agenda
Matched: “…CONCERNING COVERAGE FOR MAMMOGRAMS AND BREAST ULTRASOUNDS. SB140 J. Boyd TO MANDATE THE USE OF BIOSIMILAR MEDICINES UNDER HE…”
|
TO MANDATE THE USE OF BIOSIMILAR MEDICINES UNDER HEALTH BENEFIT PLANS; TO REQUIRE A HEALTHCARE … | J. Boyd | Sine Die adjournment |
|
SB179
· 1 mention in agenda
Matched: “…CERTAIN CIRCUMSTANCES UNDER THE STATUTORY FORECLOSURE LAW. SB179 J. Boyd TO ESTABLISH THE STRENGTHEN ARKANSAS HOMES ACT; AND…”
|
TO ESTABLISH THE STRENGTHEN ARKANSAS HOMES ACT; AND TO CREATE THE STRENGTHEN ARKANSAS HOMES PROGRAM … | J. Boyd | Sine Die adjournment |
|
SB276
Act 345
· 1 mention in agenda
Matched: “…AL FUNDS ACT (2006). REGULAR AGENDA Number Sponsor Subtitle SB276 B. Johnson TO AMEND THE LAW CONCERNING SURPLUS LINES INSURA…”
|
TO AMEND THE LAW CONCERNING SURPLUS LINES INSURANCE; AND TO CLARIFY THAT SURPLUS LINES INSURANCE … | B. Johnson | Notification that SB276 is now Act 345 |
|
SB83
Act 424
· 1 mention in agenda
Matched: “…AN EMERGENCY. PENDING FISCAL IMPACT Number Sponsor Subtitle SB83 J. Bryant TO MANDATE COVERAGE FOR BREAST RECONSTRUCTION SUR…”
|
TO MANDATE COVERAGE FOR BREAST RECONSTRUCTION SURGERIES; TO REQUIRE PRIOR AUTHORIZATION FOR BREAST RECONSTRUCTION SURGERIES; … | J. Bryant | Notification that SB83 is now Act 424 |
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- October 2, 2026
Speaker 7
1:38
Yes I have a solution to. can All right, members, if you would, members and guests, please be seated if we have enough seats. Senate Insurance commerce to come to order. Chesorum, uh, we're going to begin with Senate Bill 307. Senator Dismay. You
Speaker 8
1:58
don't have to go, Senator Dismay, you don't have to go all
Speaker 15
2:24
introduce yourself, yourself and your Chairman Jonathan
Senator Jonathan Dismang
Unverified
2:26
dismaying, state senator, District 18, and if you don't mind, I'll have Senator McKee join me through the discussion of the bill. He's been involved in this. Discussion a lot longer than
even I have and it's been an incredible advocate to the ratepayers, and I'd love to have him here as we kind
of work through the bill. Matt McKee District 6. Go ahead. Members, I think most of
us have spent a lot of time kind of going through this bill. We've had a lot of discussion on it and so I feel generally comfortable with most of your most of where you are on the bill, and I am happy to answer any and all questions that I'm able to. If it gets too technical, may ask for some assistance with that, but here's
just the basic truth of what we're working on, I believe, with this bill, is that we have to face the reality of two truths. Number 1, that we need new generation in Arkansas. I don't think anyone disputes that. It's recognized both in filings and just by those that are looking to do business in the state are not able to acquire the, you know, the new generation, if you just take all that aside just for our residents back home, we owe them a dependable, reliable amount of generation, and we need to do what we can to achieve that. Second,
Uh, generation will cause energy rates to rise, costs to rise. That is just a truth. It's going to happen. We need newer generation and it's going to cost more money. The question is, is how are we going to pay for that? This proposal gives us a new path and one that I believe is more efficient, provides more oversight than the current structure that we have and will ultimately lead to a lower overall cost for the implementation of new generation, um, with that, like I said, I'll turn it over to
Senator McKee, and I think it's most easy just to go into straight questions about what
Senator Matt McKee
Unverified
4:20
we're doing. Thank you, Mr. Chairman, members, I've had conversations with a lot of you, and you know how long I've been studying this and looking at this issue, and as Senator Dismaying accurately stated, we know we need new generation. How do we, how do we do that at the least impact to the ratepayers. And you know I had a lot of issues with original drafts of this bill, but I've come to the
point of understanding that it's my belief that this bill is how we protect the ratepayers and how we ensure that the costs that they incur, whether they be in our industrial users or whether they be the people on a fixed income in Hot Springs Village that I represent, this is how we ensure that the impact on them is mitigated, so I appreciate, look forward to questions, looking forward to going through this. And making sure that you have a level of comfort with the technical aspects of this bill, which is what I struggled with
for a long time in understanding this is a really complicated issue, so we want to make sure you have that level of comfort and that understanding
Speaker 24
5:25
so that you can be supportive of it. Thank you. Questions question from Senator Murdoch.
Senator Reginald Murdock
Unverified
5:31
Thank you, Mr. Chair. Thank you, senators, for, for your great work on this. I appreciate that you diligence that it's taken. It's simple for me at this point, and I just want to be clear. I totally support,
understand the need, but from a process standpoint and a standpoint of responsibility to the people that elected me. That have questions that are not clear yet. It's a very technical piece of legislation and long so just that process part of it is where I am. I, I know we need this. I support this concept, uh, I think I'm gonna get on board. It's just too quick and too fast and the process is pushing us
too much. This is what I'm giving you as I get this from the people I represent, so None of my position today is against what we're doing. I am concerned and I got to get, I got to land the plane on exactly what we do this taking you guys so long, you know how long it's taking you to study this. The second Timmer 2:15 tells me to study to show my self approved to work with that need not be ashamed, rightly dividing the word of truth. I need time to rightly divide.
Don't even have all the questions that I have questions of, but right now I know that we're not ready to land this plane from the people I hear from and so that's where I am. I'm not gonna give you a whole lot of and I have some pages of stuff, but I'm really not ready to go there yet because there is some incompleteness in my study. And just need time to do this and not a lot of time, but we found it the day before yesterday and it's in front of me now. It's not like this is the only thing I'm dealing with.
We, we're dealing with, so that's where I am, don't really have any questions at this point. I'll probably do my questions a lot of it offline as we've done with EU with a Doyle and PSC to get there and it
becomes of a different level, you know, you know, so that's where I am today. Thank you. Thank you. The only thing that I
Senator Jonathan Dismang
Unverified
7:40
would, if you don't mean his response I appreciate and understand that, but with where we are in this session, spring break and
everything else coming up if this bill were to pass out
of committee today, there is a full weekend of digestion that can happen before it would be considered on the floor on Monday. And so while, and then, and then we have the entire time to also go through the process over in the on the on the House side. So I believe there's going to be plenty of time for additional public comment. This bill in some versions that weren't even Actually this bill, but it had the pieces that would reflect of have been in the general public for a long time. There has been thorough discussions with the PSC about its bill, what its ramifications would be for their
processes, and so I do understand and appreciate your position, but I would hope today that we were able to have a vote, and I will be, I will pledge to continue to answer questions that you may have, and I appreciate your perspective. You've
Senator Reginald Murdock
Unverified
8:33
been absolutely wonderful, you know, and forthwith so that's
not the issue at all, so I appreciate that. have been that,
and I believe that's going to happen. We'll get there. It's just what I said. Yeah, I appreciate you. Senator Flowers. Thank you.
Senator Stephanie Flowers
Unverified
8:52
And thank you. Senator dismaying and Senator McKee and I'll note that I am a sponsor on the
bill, and I appreciate you bringing the bill and allowing me to co-sponsor the bill. First off, Uh, yeah, I agree, kind of sort of with. Senator Murdoch, uh, But I'm for the passage of the bill, plain and simple, and You know
I, I know, and you can say yeah or nay. But we had a economic development bill passed. More than it's been 2 sessions ago now. About the solar. And that was supposed to be. Going to make us really strong and allow for a mixed Of energy transmission and
Maybe lower cost. And the PSC was supposed to be involved with setting the rates and grid a whole bunch of technical stuff just like Senator Murdoch says that I'm not trying to be a scientist or anything to try to fully understand this stuff, but I do owe a duty like he does and all of us do to our constituents, but just like that legislation that was passed more than 2 sessions ago and then last
session, I think it was that we killed and yeah or
nay, can't this be repealed if it's passed? Yes. And it can be repealed
in the next session. And one thing I note about the bill is It seems that it requires some activity within 24 months. Am I correct about that? Yes, for provisions like 2 months. So if we come back here
in 2 years, and that'll be my final session. And I don't see anything progressing. Then certainly I would ask for that to be repealed just like some of the sponsors on the other bill, a couple of sessions ago. Renege I don't think they had a good basis for it. They didn't allow the, the, uh The planned. Outline it in that bill from 2 sessions ago.
To be really worked out. I don't think. But be that as it may, it was
repealed. The other thing, and this might be more technical that I would ask
maybe the the PSC this uh the section 234-4-1304. Uh, M1B. I have a couple of questions, Mr. Chair. OK
Well, let's see, 234 1304.
And it talks about equity.
Uh, that the Uh Utility would retain. And I don't
know, can our staff help me with where, what page 19. OK. M1N
OK, page 19 lines 15 through 18 through 23, 15 through 23. So, Uh, it reads that The I'm on
line 19. The investor owned electric utility or the investor owned natural gas utilities shall base the balance of those items under subdivision M1A. Of this section which I'll just
go back to M1A right above that says during the construction of strategic investments included in the rider, an investor owned electric utility or an investor owned natural gas utility shall include in in the capital structure only short term debt, long-term debt and equity. So then going back to
where I just stopped to go back to the M1A reference says. Uh
Of this section on the investor own electric utilities or the investor own natural gas utilities, actual capital structure with a maximum equity percentage of
50%. I need some help in understanding what does that mean? If they retain 50% equity. What does that mean? And does that in some kind of way affect What they can ask of the
Increase for customers rates. I'm going to let
Senator Jonathan Dismang
Unverified
14:13
them speak to it probably more directly. The PSC can answer that question. Maybe the right thing to do, and I can take a stab at it if you'd like. I know, so there's a mix on how a capital capitalized project would be funded, and it may be through debt, it may be through equity, which means they're utilizing their own dollars in some provisions of this bill, it contemplates allowing outside doors sources to be able to contribute for the construction of the project by the way, would be excluded from capitalization. Such as a grant.
Well, are such as a company that wants to go ahead and pay upfront. That's right, in the but it also would include grants with that possibly. I mean, yeah, any other funding sources that may be utilized. And so what this is saying, and I would argue it's to the benefit of the ratepayer is that that is capped at 50% because one of the most expensive ways to build a project is via equity and so for instance in the most recent rate study, and they noted this in their memo that was capped by the PSC, the equity portion. was capped at 47%.
And again that's because that was beneficial to the ratepayer, so it's in line, you know, it is slightly above, you know, the 47%, but it sets a cap in place again, I think
that's That's a protection that's in place, not a detriment to
Senator Stephanie Flowers
Unverified
15:29
the payer. Well, that's what my thinking was when I read this, but I wanted to understand if you retain 50% equity. And you're able to use that to leverage loans or whatever.
Is there anything in the bill That would require or suggest That they use their own equity. Before or with The consideration of what you're expecting. For the construction work in progress from the taxpayer from the ratepayer, the customer, yeah, and I think they can address that more clean than I
Senator Jonathan Dismang
Unverified
16:14
can, but you are, you're exactly right. I mean this sets a cap on how much equity or how much of their own money they can invest into the project because they are guaranteed in the system that we have a rate of return, right? And there's a different rate of return on equity and debt because the then on all of those things and again y'all can speak to that in That's what flows into the actual outcome of the ultimate rate. Again, I'm not an expert in
Senator Stephanie Flowers
Unverified
16:40
how the equation works, OK, well, if uh Chairman Doyle, you'll remember
that question because it's gonna be hard for me to
Speaker 7
16:47
just try to go back would come up to the table, but I have some other
Senator Stephanie Flowers
Unverified
16:50
questions I want you to consider too, Senator PSC come up. We're
Speaker 6
16:54
going to, we're going to get them in the mix now. You might want to make me forget my question. You
Speaker 15
17:06
might want to stay at this. Stay at the table and introduce yourselves, introduce yourselves. A Do Webb, chairman of the
Speaker 6
17:19
Chairman of the Public Service commission. Danny Hope, our chief of staff of the PSC. Thank you. Hey, pull
Speaker 67
17:31
those Macs toward you. There you go, pull, pull it on out. There you go. Thank you. Go
Senator Stephanie Flowers
Unverified
17:38
ahead. I really don't like being interrupted, but Senator, would you
Speaker 64
17:44
like for us to go ahead and explain, follow, I'm trying to recall my My other uh
Senator Stephanie Flowers
Unverified
17:54
Concerns that I had. OK, here it
is. I want to know And I appreciate this. Hofer, Hofer Hofer's
analysis. And I wanted to know. At what
point? Do or does the PSC. Become involved.
In approval process. That's
2. OK, here. The other is This concept of Construction work
in progress. And Investments are money. From Customers
Rates. could be raised. For that purpose, for that construction work in progress. And then there's some language of a term. Over earnings. of the utility. And as I read it, it appears to me. They
can hold it seemingly in an account for a period of time. But at some point,
Months That has to be returned to the Customer If no progress is made. The thing I like about this bill is that I don't think that these time periods that um I think
Ms. Hoff first analysis uh put forth. That are reduced now from what
is existing time frames. I don't think that's a bad idea because like I said, you were talking about 24 months in a lot of cases, and that's And I want to know, is there an emergency clause on this? So they got to hurry up and start doing something. And I want you to tell me if I'm right or wrong about my understanding of that. I
Speaker 73
20:26
think there were 3 questions in there, right
Speaker 75
20:31
I have written them down. I think I have them all. Um, do you want,
Speaker 79
20:40
do you have a preference where I start? What's comfortable for you. I'll go ahead and start with I'll go ahead and start with at what point the PSC becomes involved in the process. Um, and I can speak to where we currently become involved in the process and then explain the difference, if any. Um, so currently when a utility
has a project that they want to start, they will file an application with the PSC. The PSC will review that and either grant or deny it, um, we're working currently under a a A statute that um Permits up to 240 days, uh, the new or the proposed language would reduce that to 180 days. We have surveyed our internal
processes, um, a number of these types of applications that we've done over the last few years, we feel comfortable in meeting that 6 months, um. Truthfully, we, we don't often seem to have applications that exceed that anyway. In terms of where it goes from there, um. Well, let me think about where I was going with that. Sorry. Um, So under the proposed legislation, and the PSC still
maintains that authority that if a utility has a project, uh, they go ahead and they bring that in an application to the PSC, the PSC reviews it, and that's where the 180 days comes in. Um. So in terms of The C whip, the construction work in process, progress, I always say process, sorry. Um, That is That refers to, um, let, let me back up. Uh,
So as I was explaining before, You have a utility that wants to build something, they bring an application. Application gets approved. At that point, that is when they would start building. They build their plant. It goes into service and then that's when they are able to ask to recover. They're not able to recover currently until it goes into service. Construction work in progress would allow them to recover
throughout the process, um, so it's, it's not simply recovery. After the fact. Yes, um, the bill contemplates annual true-ups, so the PSC would that well the utility would submit to the PSC every year an annual report. And with that annual report, the PSC would review what construction has occurred, what costs have been incurred by the utility and what costs have been
Senator Stephanie Flowers
Unverified
23:44
essence what you're saying Rights can increase As far as the customer's bill is concerned, while that Construction work in progress without applying for a rate increase from PSC. It's not so much that they would
Speaker 79
24:11
Be getting that an increase without applying for a rate increase, the um the prudency of the project would have already been granted, so they
Speaker 65
24:20
would have already gotten approval for the project itself, and there's some limitation. On the Oh Increase If
Senator Stephanie Flowers
Unverified
24:26
any Well I guess it would be so. I mean, I can't imagine it wouldn't, but
There is some limitation on the amount of the rate increase. Is that correct? That is correct. And can you speak to that because, and I'm asking these questions for my own knowledge, but also to make sure that I'm understanding. The legislation, but more
importantly that my constituency understands. The legislation. Absolutely. Um, Although, can you help redirect
me back to the question. So there's a limitation in the bill in terms of rate increases even when there is construction work in progress. There is a
Speaker 65
25:26
limitation that states that a utilities rates, and that includes their
Speaker 79
25:29
total rates. That's not just going to be their rates for construction of a single project that's going to be their total big picture rates shall not exceed. Um,
A number that's 10% below the national average based on a report that is, um, specified in this. Legislation. Um, there is A provision that would permit a utility to petition the commission to exceed that threshold. The commission
Speaker 65
26:04
would have to make a public interest finding in that
Senator Stephanie Flowers
Unverified
26:08
case, so they can't go above that. 10% below the national until
they get approval or or but for approval from PSC. Yes, unless they get approval from the PSC, and I understand Arkansas is well below. That 10% now of that national average, and I wanted to know
how often, if at all you've seen the national average fluctuate. Um, honestly, I
I am not certain of that. I will tell me this, how long has Arkansas been
Speaker 65
26:57
below that national average. So I would speculate for a considerable amount of time,
Senator Stephanie Flowers
Unverified
27:04
but I don't have, yes. And do you, do you have
Speaker 79
27:09
any idea why that is. Um, I mean, there's a number of things that go into it, um, that would include, um, availability of energy resources, usage could play a factor, um.
The types of Generation that we use here in the state, our regulatory framework on the economy of that state. Absolutely the economy and, and the policy um policies of that state, different states of evolved in different ways. OK. Do you have my other question. Yes, I have your other question regarding the equity.
So let me pull up. I've got that section of the bill here. OK, so I believe I have that your question um is generally seeking an understanding of M1A and M1B and How, uh How equity kind of plays into all of that. OK. So equity is one of the factors, uh, that
goes into determining uh capital structure for a utility, so it is Part of a formula basically that ends up uh factoring for a utility's rate of return. Depending on How High the equity is, um, it's something that ebbs and flows, so it's, it's not necessarily a static number. Um, it does have
an impact on ROR, um, but, uh, You know, that's, that's not to say that it just exists in a vacuum. So, um, but to that, um, I, I think you'd had a question specifically, so the debt impact or the debt equity, debt to equity ratio, um, is what gets impacted by your equity number here, um, the higher the equity proportion, uh, the more cost of equity in your weighted average cost of capital.
The short way to explain that is, um, The lower the Equity number is potentially the higher the rate of return is, but that is not the sole factor, and there's a lot that goes into that. Did that
Senator Stephanie Flowers
Unverified
29:49
help at all, the rate of the equity. Can make the rate of
Return higher? Is that what you said. The Lord, the rate of equity. So that means that they've invested so much. Or I need some help understanding that Senator, just in the normal process, you just say I'm a
Senator Jonathan Dismang
Unverified
30:18
home builder, right? And I, and I'm building houses. There's a mix on how I'm paying for the
construction of that house is. I've got dollars that I'm going to put in and that I'm going to go to the bank and I'm going to borrow money to
put in, right? And typically that's a 30, 70 whatever the relationship with this bank, but you're mandated to have a minimum amount of equity. So, but why doesn't every builder just use All the cash they have on hand to go build a house. Because you can only build one house, right? And that's a very expensive way to do your business. Those dollars, those equity dollars are the most valuable dollars that you have because that keeps your business going. That allows you to borrow more money. It allows you to have a backstop from your pay your employees and all those
things. It's a valuable piece of paper to your company, that equity portion is what everybody looks at. So the more of your echo what you spend, the higher value that you need on a rate of return to justify spending that equity if that makes sense. So it'd be just any other builder or any other project. Those are your most valuable dollars and so when you're doing a calculation on a rate of return, you have to take into account that they're spending a substantial portion of their equity to fund the capital project, and you have to give them a rate of return to justify
that higher amount. So if this were, I've heard it before from some other members. Well, we should maintain a 6040, 60% equity, 40% debt ceiling that would be the most expensive way to fund these projects and would have the most detrimental impact to the ratepayer. That's the reason in the last portfolio that you or the last review that you did, it was capped at 47%. Um, so again, I think this is more of a protection to the ratepayer than
Speaker 109
31:59
it is to a detriment to the ratepayer. Well, when you hang on, Senator,
Speaker 107
32:07
I'm I'm going to go to Senator Boyd, and we can come back. OK, that's all right. You don't have
Senator Justin Boyd
Unverified
32:15
to come back to me. Thank you. Thank you, Mr. Chair. I've got a question for Senator McKee or dismaying either of you. Um, I had a, I had two
questions, but you just answered the first one. So the, the one I'm gonna get straight to the point. I've read this bill. Is there anything in here that mandates suggest, or a nuclear waste disposal or recycling program anywhere near Fort Smith.
Speaker 47
32:41
No, sir Hopefully Senator Murdoch, that was one of your questions too. So we got,
Speaker 114
32:48
we got that one out in the outskirts of Alma, but not in Fort Smith, OK, Senator Ervin, just kidding. Thank you,
Senator Missy Irvin
Unverified
32:55
and I thank you so much. I apologize. I had to take a phone call from home and before at the beginning of this meeting, um, thank you for all your due diligence on this bill. everybody at the table. I know that it's been a lot of work
from a lot of people and to be frank, I haven't, and you sent me the draft, and I really appreciate that. I've tried very hard to read through as best I can. Um, question is for the PSC, and this is your, your document, and this one is yours, right? Is that OK, OK. Um, but I'll just get straight to the point. Um, on page 2 of the document from the PSC. it says that it prohibits a commission from requiring co-ops to provide cost of service studies as part of the
rate-making process. And, um, Oh, I need to understand why we're doing that, and if where that is located in the bill, um. And I need to know the current. process of investigations on rates by the PSC and how this changes that. So those are my questions for PSC and sponsors of the bill.
Speaker 41
34:18
While they're jumping, I can probably help answer that.
Senator Jonathan Dismang
Unverified
34:22
That is not something that is done now. There is question whether or not ESC has that authority, so they don't utilize that authority. The legislation in place isn't clear. I've asked when the last time that would have been utilized. I'm not sure anyone has a date and so that is providing clarification for something that's there now as far as opening up, it actually drops the threshold from 15% to 10% of petitions to be able to draw that question out, and they
could speak to it a little bit more, but that's The bill actually provides more protections or lowers the threshold for able to bring
Speaker 75
35:01
an issue. Yeah, so I think that the main thing that I will offer on that is
Speaker 79
35:07
that um, This is, this is a point. This is this section of the bill is clarifying a section of code, um.
I am hesitant only because we have a number of open dockets currently that are actually examining this exact issue. To weigh in, um, beyond that, besides that I can offer that uh there are a number, well, there's at least 2 parties in the dockets. Who Disagree with um With this particular question, and so Uh, this, this provision would certainly offer clarity to that.
Senator Missy Irvin
Unverified
35:51
OK, but, but let me ask you this, um, The way I read this, that that the PSC has the authority to initiate the investigation, but now you can only initiate the investigation upon receipt of a sufficient number of valid petitions. Is that yes or no, correct? Except now she's talking about the pill. I'm
Speaker 63
36:15
I'm looking at it you're referring that
Speaker 123
36:24
I'm, I'm on the bill, it would be that's your question. Under the bill, what the change will
Speaker 79
36:33
be versus what it is today, correct. So what it currently is today is there is, um, the, the statute does not include this section. Obviously this is an addition since it's underlined, so it would just be adding this clarification, um, that these would be the elements
Senator Missy Irvin
Unverified
36:50
required. Right? There's a difference between a clarification and a change in process.
Is this a change of process and procedure. Not just a clarification. That's my problem. I do not and cannot support the PSC limiting the PSC from authorizing and investigation into a rate issue. And the way I read this is that now you cannot do that. You only can do it if you have petitions of valid sufficient number of valid petitions.
Is is that, am I, am I understanding
Speaker 79
37:35
that correctly. So my reading of The bill is that, um, yes, that is what would be added to the bill. My hands are fairly tied in terms of how far I can go on what our current, OK, and I apologize for that. That's something I can get with you offline if you want. I, it's something that we're going to that we have. So, in the commission's
adjudicca adjudicatory role. We've got pending cases on this, and I don't want to Prejudice their decision by getting up here
Speaker 65
38:11
today and telling you what an interpretation of the law may or may not be. Is that fair? It is, it is
Speaker 120
38:21
fair Mr. Chairman. I think these are two separate issues.
Speaker 16
38:26
Hold on, hold on. She's, she is answering this
Senator Stephanie Flowers
Unverified
38:32
question as directly as she can. What's the point of order? Well, I'm not trying to cut you off, but I'm trying to add some clarification. You asked her whether that whether these petitions are brought by the commission and they're not. Currently the law at 234905 says the uh public service commission, uh, Receives petitions from fewer
than 15% of the member consumers requesting that the commission apply rape case procedures, so it's not that, and you can tell me if I'm wrong, but
I don't, it's not that PSC is bringing these petitions. Thank you, Mr. They are adjudicating. Do you
Speaker 16
39:16
have anything to add? All right. Is there any other questions, Senator Murdoch? What I said. So
Senator Reginald Murdock
Unverified
39:39
Let me ask, uh, Chairman Webb a question. The capacity That it will take for the
PSC to properly Oversee It may be my best word this. Situation this legislation as it relates to Whatever we finally landed. My
concern is, or I just want to get assurance from you. Is that we, you feel comfortable that through acquisition of of of um capacity, human capacity or whatever is necessary. Because the the there are some pieces in this. That
You ready? There's some pieces in this that lend to. needing a lot of expert analysis. And monitoring. Of what's happening. The PSC and I think it was mentioned a little bit, but I want you to revisit that for me because I think conceptually and then actually is what we can get into a real problem with this. And the PSC, we're going to need
you not to be policy makers, but we're going to need you to
Speaker 64
41:23
be what you're. Charter to do if you will. Go ahead. That's a very good question, Senator. We believe that we have the capacity today. And the manpower, human power to do what this bill requires and to even in moving up the time frame we feel comfortable that we can handle the 80 days, 6
months, whatever it is, rather than the 240 days. Now we're concerned, and I'll be very honest, that If this is as successful as we believe it may be. That we may need to add expertise because there will be so much coming into our office and a shorter time to evaluate it that we may need, and I'm not talking a lot of people. We may
need 5 more people knowledgeable and financial analysis, we may need to look at a different salary structure for some of these simply because when you have all of this moving around in Arkansas, the expertise gets hired up, OK, and, and Central dismay and I have visited about it. It's something we can't wait until the water until the flood hits, OK? So we, we could see a need,
and we're being very conservative. We have not added a position additional position in 20 years at the Public Service commission, OK? We have about 15 unfilled positions. now, but they're at a salary level that would not translate into this type of expertise that you're addressing my concern because
Senator Reginald Murdock
Unverified
43:09
as great as this can be, it's gonna require us to get greater internally. Our
infrastructure is going to need to get greater, which would mean that we have to make some more decisions over here as it relates to you and what, how you are structured and you're going to have to make some decisions. Last question for now. Wherever it says inside of this bill that it restricts What you have previously done. Are you comfortable with all of those wherever it says it restricts or it limits. Your ability to do what you have done before.
Are you comfortable with all of those things and it's and I'm gonna let you stop shaking your head for a second because I really want you to hear me because there's a lot of places that is limiting or restricting, and I'm not. Grading it. I just want to make sure you are and you're comfortable with all
of those. Situationss or inside the bill. As we have
Speaker 64
44:17
taken a position that the documents that we have
provided, the memos or informational, uh, without taking a position in whether this bill should be passed or not. We're all for growth. We're all for greater opportunity for Arkansans. I feel that this is a much better bill than the original bill that we had, and if this is the policy See that the legislature wishes to establish, we will do our
best to comply with it and interpret it in such a way that it achieves what should be achieved, the intent. I don't know if I'm answering your question, but that's probably the best way I can. We, we are giving up some things. We are taking on some things, um. Yeah, as Senator Flowers said earlier, if it doesn't work, you can look at
Senator Reginald Murdock
Unverified
45:16
repealing it in 2 years, you know, so and that becomes a
whole other conversation because once you get into something like
this, then you get into a whole another menagerie to try to get out of it. So, um, OK, that's all
Phyllis Mcmillan
Unverified
45:37
for now. Yeah. Thank you, I see no other questions, so I'm going to begin, OK, Senator Johnson.
Senator Mark Johnson
Unverified
45:45
Thank you, Mr. Chairman. First of all, I want to thank Senator Dismay, especially Senator McKee, who
I've been talking to about this for too
long, maybe, uh, my, uh, Eyes kind of get blurry after a while I hearken back. Oh, I have to throw this in because, you know, you feel like sometimes what is our friend in the paper Mr. Masterson talks about God nods last night we had a power outage at our house and our generator didn't work either, so we were in the dark, and as I said to Senator McKee the other day,
whatever we do, we have to make sure that when our constituents The ratepayers go flip that switch. The lights turn on because it was I did well to find a candle to light last night, so I think that may have been a godno of we need to know what to do, and I appreciate Mr. Bethel taking my call about 8:30 last night on this, but it did come back on and we were OK, but I appreciate the fact we've got to have this capacity and if we weren't looking at
AI and data centers and additional industrial needs, we'd still need more capacity just because since the current generation capacity came in. We're probably looking at 25, 35% increase. I mean, Arkansas went from 2 million to 3 million people. I mean, we've just got more people, I think. The concern I have is is process, and I want to join my friend Senator Murdoch and his,
his statement on that, I concur with that that we do that and I certainly appreciate Senator Flowers, very good questions about that and not just if we go down this tunnel, can we back out if If necessary, now I see a big difference in the situation with the net metering legislation that we passed, I guess 4 years ago and repealed 2 years ago. That's more of an accounting thing, but when you've got a lot of concrete and steel and other things flying, and I don't think
we back out of that tunnel quite so completely. The one thing that I'm, I have a little, I won't call it heartburn. I think Chairman Webb touched on
it a little bit, but Uh, the way this thing works is that and correct me if I'm wrong, this is my real question, Senator Dismay. When the PSC receives this uh filing that it says the
commission shall issue an order approving the rider rate schedule and each annual update if the commission determines that, but it's talking about immediately. I mean, it's like you they file
it and it goes. Now, uh, I'm certainly OK with maybe compressing that time, uh, but if The sponsor of the bill were someone other than the chairman of the Joint Budget, this might be a more difficult question to answer, but Senator Disma, you heard Chairman Webb's comments about staff capacity, not just
in numbers but in salary. I remember this during the Clinton administration. I don't remember exactly had to been in the 80s, I guess, but uh we had the issue and this was during the Grand Gulf period of time, and it Wasn't just, you know, energy. It might have been AP&L in those days, but all the utilities were hiring away the lawyers at the PSC and leaving the cupboarded
bear for proper analysis of of a lot of utility issues and I maybe we've come back to that. I don't know, Chairman Webb, whether we have or not, but, but as chairman of Joint budget, and I've certainly pledged my support to you if you do this. Can we look at maybe As concurrently as we're working through this legislation looking at increasing the funding for the PSC to have the staff they need to not just keep up, but maybe even stay a little bit ahead of these types of things. Is that something that could possibly be done.
Senator Jonathan Dismang
Unverified
50:12
I don't think any of us would want to stand as the roadblock in front of progress in this state, right? And I think this is an avenue that's going to allow us to progress and and with that, I hope. That we need to hire additional people at the PSC because we are achieving everything that we can achieve, so I don't, I don't, this body, the legislature as a whole, has never hesitated at trying to help economic development in that state, and if that means that we need
additional folks because we are doing so well. I don't think they'll hesitate to make sure that we have that again, as far as the 6 months, I mean, as it stands right now, everyone at the PSC, and I've heard it repeated. over and over and over again is very comfortable with that 6 months and just to rehash as it says it has to be approved by the PSC before anyone can move forward in in taking into account the public's interest. again, we can step through. I do think there are more, it's kind of one of those things where we,
there was a question of is there enough oversight? What I would argue is there's more oversight in this bill and probably more diligence that's going to have to occur on the PSC site to work on this. C Whip program, but that's been asked for and requested, and we should want it. I mean, for an example, there's going to be at the conclusion of the first years construction, a look back and a look forward. That's going to require effort by the PSC. 2nd year, construction. Look back, look forward, 3rd year until construction is complete,
and then at the end, so there's no question. It has a one-year audit period to determine prudence, and they can talk to you about prudence, but that is A very well established term for them, and if something is not appropriate or done appropriately, they will not be paid for it. Again, there are safeguard guards throughout this bill that I would argue that are not even in place if we were to utilize the old system, which again will ultimately cost ratepayers more at the end of the day. So again, I think there are plenty of safeguards in place and to your point, those
safeguards do come with a consequence of more man hours.
Senator Mark Johnson
Unverified
52:19
OK, and, and Senator Desmay, thank you for that answer, and I want to go a little bit further and Senator McKee has said to me that uh and you said in the paper this morning, this is a whole new bill, and I appreciate that fact because a lot of the problems I had with one of the previous, I won't even say which one because they all kind of blur. The previous iterations of this legislation and I think Senator McKee's
comment, it, I don't even know if he said that to me personally or said in your testimony a moment ago, but that this whole thing has changed as far as as the protections to the ratepayers. It's gone from the earlier iterations, I think, didn't offer enough protection to the ratepayers to something that maybe offers more than we maybe even have in current law, and I appreciate the sponsors and and all the utilities that worked on this to help bring that about
I'm just I guess I want to turn and ask Chairman Webb and Ms. Hofer, that's similar question if if if we get you the resources and I I know that Senator Dismas correct and his word is good that we'll we'll work to do that. Is this accelerated timetable to protect consumers is it is it, would it give you enough
to do what you need to do to implement this and again there are things in it I haven't had a chance to digest enough. There's implementations beyond just what on the surface I'm seeing, but a timetable wise is this process with more staff staff both salaries and positions adequate. Uh, in the, I know y'all work hard to do whatever you need to do, but is that what you would recommend?
Speaker 64
54:18
It's a very good question, and we really appreciate your concern for the people of Arkansas, and the answer is yes if we had additional expertise. Once again, it depends on what kind of when we start having applications filed, we'll suddenly realize how much staff we need, but if we had 7 or $8 billion worth of requests filed, we would know immediately that within 180 days
we're going to have to do some evaluation and then we're also going to know that year after year we're going to have to do some monitoring, so we will have to move quickly, but we will be vigilant, and I know the legislature will be vigilant and We'll move forward and I think it's a very good question. Well, I'm
Senator Mark Johnson
Unverified
55:07
trying to be vigilant Chairman Webb, and I, and you mentioned other applications that could be coming in. We're, we're all anticipating an application from our largest investor owned
utility, and that's great. I think it'll be fine and we know we've got to have capacity in electric generation, but I mean I see Mr. Bowen over here and I know that, you know, you could be getting one from from one of the gas utilities and would at the same time with the same whatever level of staff you have at that moment, so I'm, I'm trying to anticipate the need and I don't want to call it demand, but I
guess the caseload that you would have at that time. So I just returned
Speaker 123
55:50
from a national meeting with all regulators, and it is unbelievable and
Speaker 64
55:55
unconceivable the amount of generation that's going to be needed in the coming years if we're in Arkansas has got to be in the forefront of that, but we have to replace some operation that will be retiring and we're going to have to build generation, and this is an avenue to do that, and we appreciate the diligence and
drafting this legislation so that we can go to work if need be, OK,
Senator Mark Johnson
Unverified
56:26
thank you. I assume Senator McKey, I guess you've got Chairman,
Speaker 69
56:31
can I add a little bit. So I, I just wanted to say that so
Senator Matt McKee
Unverified
56:36
the PSC juggles things every day. This is what they do, and they have all kinds of riders, all kinds of tariffs, all those things that go through dockets and that's what they do on a daily basis. This is Just one more rider, right, so
they are, they are familiar with the structure. Now it may be a new rider. We haven't done CWIP before, right? But this is what they do. They juggle those things and with respect to the need for different professional individuals that are in their office to handle the paperwork and things like that and do the due diligence. Those are things that we'll look at over the next year we're going to figure out real quick how many projects are going to be applied for and and what that's going to look like, but these are things that they're handling every day already. This
is just one little, one little change in how some of those will be judged, so I have, I have a great amount of confidence in their ability to let us know very quickly what that load's going to look like,
Speaker 160
57:38
OK, thank you both senators and Chairman Webb and Ms. Hofer, thank you, Mr. Chairman. Members see no other questions, we're going to have
Phyllis Mcmillan
Unverified
57:47
to get through. We have 8 to speak for and against. Uh
We will begin with a David Cook. No, y'all, y'all can stay there. Chairman and the PSC, you can You can, you can exit. Yeah, I actually It's OK if I can't.
Speaker 65
58:26
If you feel, if you, if you feel the need. I am so sorry to interrupt. Um, thank you for the latitude, chair and senators. I wanted to clean up one like little thing that I said and and this is just because I have apparently I need to clean up the record. Um, I misspoke when I had referenced that the lower the rate of equity, the higher rate of return. Senator Flowers was correct. They, they trend together upwards. So sorry, I felt the need to put that out there on the record. Thank you. Thank you.
Phyllis Mcmillan
Unverified
59:02
David Cook, not seeing David Cook. Brandy McLean, If you would go to the end of the table and introduce yourself. This is against. Just introduce yourself, tell us who you're with, and you're welcome to begin. Push, push, there you go. All right. My name is Brandy McLean,
Speaker 166
59:34
and I am a member of Petta Jean Cooperative. Um, let's see. There's a few
Brandy Mclean
Unverified
59:46
things that I want to That I want to address as far as what was said here, but first I'd like to say whatever, but I, you know, made up for say today, um, none of us want Arkansas to miss transformational opportunities for development. We all want Arkansas to succeed and thrive, of course, but
unfortunately, um, the acquisition of some for-profit endeavors for some of the cooperation cooperatives have initiated a drastic. financial toll on their members. Um Due to so many debts acquired in such a short amount of time, it's created a substantial increase in our electric bills stemming from the added cost of debt adjustments. Um, in most cases, members had no knowledge of the amount of
debt being incurred. Um, especially when they were told that they weren't going to have to pay for these for-profit endeavors from their own pockets. There was no need that, I mean, there's no doubt that, you know, fiber and all that needed to be implemented, but now we have this infrastructure that needs to be, you know, taken care of as an emergency, which there's no doubt that we need new infrastructure and upgrades and that type of thing, but Was this not foreseeable, like whenever they put $1.6 billion into the fiber, you know, situations. Um Let's see,
uh, Let's see, sorry. All right, so what this bill does is it creates an even easier way for the cooperatives to raise rates by allowing them to sidestep. Regulations that are already lenient. And it's detrimental to the state as a whole. The lack of oversight and competition in the electric cooperatives is already taking a toll on the members, especially in rural areas. With this bill will do is reduce the public service commission
oversight and making it easier to adjust rates and implement and uh I'm sorry, uh, Yeah, with, with minimum regulatory review, I'm sorry. Um, while this may reduce administrative burdens. It will also increase the risk of higher rates without adequate protection for the public, especially with the GNT cooperatives, they'll have greater flexibility and will be able to raise their rates up to 10% annually without public service commission reviews.
It also um eliminates member input, although the petition has the petition amount has been lowered from 15 to 10% of member threshold, it's still makes it a hurdle for a lot of rural people to, you know, cooper to I'm sorry, to petition. Um. The the bill also removes key procedural safeguards, such as cost rate reviews, uh, I mean of service studies and approval requirements, making it harder for members to access the
fairness of rate changes. The need for greater transparency is also great, and the need for the cost of service studies for significant rate changes is a must. Many of the co-ops have already have a so-called monopoly. Let's see, uh, sorry. Were the members of the members are at their mercy and are already suffering. Let's see, is Arkansas code 23-4-1304 allows utilities to
recover investment costs through writer fees, which could potentially raise our energy prices even more, and that is something that is not sustainable for most of these rural communities. The Public Service commission already has an open investigation for unjust and unreasonable increasing of tariffs due to certain co-ops using misleading gross revenue percentages to gain approval for the rate increases. So we've already been paying for for this, and now it's, you know, under investigation, but at the expense of the members who
already, you know, are some on a fixed income and that type of thing, um. Cooperative members deserve both affordable energy and a fair process that ensures the voices are heard. We appreciate your leadership and urge you to consider these reasonable protections as this bill, you know, potentially moves forward. Now, with that being said, I'd also like to say that, you know, the citizens don't have 2 years to wait to appeal if things
don't progress. We don't have that. People are already at mercy. The electricity is being cut off, and it's a major, major concern, and you may not see that, you know, being in these offices, and you may not even hear those voices because there's, you know, they're so small, that's why we're here to speak on behalf of this. Um As far as the rates being increased, a lot of times when the rates aren't increased, the fees are increased, which Public Service commission has no authority over, so that's a
problem that we're facing right now, um, and that her questions are being raised and in that type of thing, um. Trying to push this bill so fast, like just drawing it or just, you know, submitting it two days ago and then trying to get it in so fast and and and it it's a problem. It's, it's something's not right is what it amounts to. Um, why would you be trying to do this so fast when there's already so many things under review and investigation and things that haven't been thought through for the people, the people is who suffer, not
anything else, the people, and if the people can't, can't afford to pay their bills, well, then all of this, this is moot because if we can't afford electricity, what's the point of generating it? And that's what I have
Phyllis Mcmillan
Unverified
1:05:28
to say. Thank you. Thank you, Ms. McClain. You have, you, you have got to stay there and and
Speaker 138
1:05:33
answer questions. Senator Murdoch, just real quick, tell me again who you represent, you said Petta Electric Corporative in Van Buren
Speaker 170
1:05:39
County. You represent the core, I'm sorry, I'm a member of, I
Speaker 166
1:05:45
represent the members. I apologize. Thank you
Phyllis Mcmillan
Unverified
1:05:49
so much. Appreciate that. So Ms. McClain, I'll ask, I mean, your first. Read your ass on that is you, you are a co op member and you have board members who are elected locally. That's correct. Have you, have you I
Brandy Mclean
Unverified
1:06:06
actually just moved here and the state last year and I've, you know, I thought we don't have co-ops like where where I came from. And so
whenever I was seeing the rates and all, I thought they were high, but I honestly, I'm not real political. I don't
Speaker 170
1:06:22
get into all of that until my community is suffering, so, you know, this is, I've dug into it and I
Speaker 18
1:06:29
found out what's happening and this is
Speaker 8
1:06:33
a problem. All right, thank you. You. Next is a Robert Birch with the city of Jacksonville for.
Speaker 176
1:06:52
Good afternoon. Um, I'm the director of economic development for the city of Jacksonville. Robert Birch, director of economic development for the city of Jacksonville, and was formerly economic development director for the city of North Little Rock, and over the past 7 to 8 years we have worked on major projects and the number one concern, number one question we always get is, which used to be, you know, incentives or quality of life or things like that, but can you provide the power
and we don't know what projects that we have missed because we don't see the. user unless we get the project most of the time and we don't know what is what what has passed us by and what opportunities we've missed because if we can't answer those initial questionnaires of can we provide the power do we have the infrastructure, are our sites prepared, um, that, uh, you know, we're not going to be competitive. We've had great success. We've had great leadership the last few years
and the last 10 years or so that I've been doing this and um But with the changes that are coming with the shutting down of the coal plants that we are, we're putting ourselves at a disadvantage if we do not act, and um and doing the research and looking at the at the different versions of this bill that have come through, I do believe this is the best opportunity that has come across in years to put us on a competitive path. We have the workforce. We have the support
of, you know, municipal governments and state. government. We have the people in place to bring the jobs and bring innovative companies to Arkansas and you know, we just, there's some things that we in the economic development field can't do, and we can't produce power, and I, I appreciate this, this version of the bill and just want to voice the support for the city of Jacksonville and surrounding areas that we need this. We need this as a state to
be able to function and move forward, or we will go backwards.
Phyllis Mcmillan
Unverified
1:08:58
questions. Seeing none. Thank you, sir, for
Speaker 73
1:09:02
your testimony. Next is Phyllis McMiller. to introduce yourself and tell
Phyllis Mcmillan
Unverified
1:09:17
us who you're with or who you are and you're welcome. My name is Phyllis McMillan. Sorry
Speaker 181
1:09:25
Uh, I'm from originally from Cercy County. I live in Beverer County. I am part of the petty Jean Co op. And going backwards sometimes is not a bad idea. Being raised in Cercy County and through the co ops. People took care of people. When my grandfather had a stroke, people showed up at our house to help us milk the cows and build the barns.
So that's where I'm coming from. Cersei and Vermeer County is so rural. And there is a lot of elderly people. They cannot afford their bills right now. And they talk about how Their electorate bill is so high. Yet they use wood heat. So where is this electricity coming from? What's being done
about it, you know, nobody's investigating. We got petitions signed. At a meeting we had in Clinton, Arkansas in a small community. Over 320 people showed up. That's a big statement. That is a huge statement. There is nobody needing
Speaker 181
1:10:57
I happen to be a little lucky. I haven't struggled. But I'm still raising. A 29-year-old autistic child, you know what's going to happen to him when I'm gone. Where's what, you know, if if people keep trying to
Speaker 183
1:11:16
push stuff on the little people. And these rural communities, you know, we're not talking about the big cities. They have their struggles too.
But the rural communities is where you're elderly. In the next woods, people are struggling and nobody knows nothing about it. We can't go to the food bank. And I'm speaking to elderly. I'm not speaking on my behalf, but the elderly can't drive. They can't get to the food bank. They can't, you know, they don't have all these other resources. So you really need to stop, look at this bill, read this bill. It
has not been out long enough to
Speaker 138
1:12:05
pass. Thank you. There any questions? Go ahead, Senator Murdoch. Uh,
Senator Reginald Murdock
Unverified
1:12:10
thank you so much for coming and a real quick question, obviously we all know the need is there. What you're talking about is that it does not overburden ratepayers, and I'm just asking you because you're here, do you have an idea or a alternative plan because we're gonna have to have solutions even if something
is changed so we have to have solutions to go with this because we're going to do something, but so I just want to give you a chance to say if You have an idea of what can happen and that may be
Speaker 181
1:12:42
a far too technical question, but, well, no, I, I, I really don't, but there is a lawsuits. There is attorneys looking at this, uh, I don't know if we still have the petitions on us or if we've
Speaker 183
1:12:53
turned them in yet and, and, you know, we're not saying that we don't want to progress. We do,
but we don't need the elderly and the poor, you know, there's people that's Just can't do it. They have no vehicles that have, you know, and we're trying to speak for them. You know, so I don't have a solution for that. Thank you.
Speaker 184
1:13:21
Any other questions? Seeing none, uh, we will go to Brad Lacey.
Brad Lacey
Unverified
1:13:38
She, uh, Brad is 4 Brad introduce yourself and good morning. Uh my name is Brad Lacey. I serve as president and
Speaker 186
1:13:47
CEO of the Conley Area Chamber of Commerce and the Conway Development Corporation. Also known as the CDC. It was formed in 1959. It's the private nonprofit entity responsible for leading economic growth for Conway. 28 years ago I walked into the doors of the Big Mac building behind us here and began my career in economic development,
working for the then Arkansas Industrial Development Commission as I traveled the state, I learned the fundamentals of economic development and love the art of putting a deal together. Many things have changed over the years. I remember filming a site in Nashville, Arkansas and mailing a VHS tape to a company representative out of state overnight. That was pretty innovative in the late 90s, but today nearly every piece of information's at our fingertips and compared to what I experienced at the state in the
late 90s today the numbers are larger. The time frames are shorter. The competition greater, and the stakes are higher. Our team tries to visit site location consultants every year, and it's important to build those relationships so that they understand what we have to offer in Conway and in Arkansas and in January 2024, 2 of my colleagues and I visited site Location consultants in Atlanta and Greenville, South Carolina. We prepared and had what I thought was a really good presentation. We were ready to sell Conway's
recent successes. We could prove the quality of our workforce. We could give examples of companies that had relocated and loved Arkansas. Um, we could talk about our sites and our buildings. We could sell a pro-business climate in incentives and how those would close the gap, and I felt really good about where we were going that day because it wasn't our first time that we had done that, but that trip would be different for us as we started our presentation, a site consultant interrupted us and said, How much power do you have?
That's the driver for my projects today, and it's harder and harder to find sites in places that can support these projects. I'm sad to say we couldn't answer that question. On that day, and I had hoped that that question would be an anomaly, but it wasn't. It was asked every time we went to every site location consultant. So what we learned on that trip in 2024 is that you don't get to talk about workforce or incentives or cost of living or quality of life or cost competitiveness until you can
positively answer the question about power availability. And after that, the next question is how quickly can we get the power. So I fast forward to today and our team is working the two biggest capital investment projects I've ever worked in my almost 30 year career and power is critical to both. And just to give you a perspective. One of those One of those, if it came to fruition, would use 4 times the amount of power the entire city of Conway uses today.
It was staggering. I mean, think about that one customer would use 4 times the amount of power that the city of Conway would use. So my 27 year old self sitting in the Big Mac building wouldn't have believed, nor would I have thought it possible to see the types and sizes of projects that we are seeing today, and I couldn't have comprehended what billions meant. But in 2025 those opportunities are a reality, and today Arkansas has more opportunity than I have ever seen in my career, but in order to realize
that opportunity, people like me and my peers, many of whom are back here, must be able to answer yes when someone asks, do you have excess power. As much as economic development has changed, one thing has not, and that is that there will be winners and there will be losers. Some states will figure out the power challenge ahead of others, and they will win. They will win projects that are bigger. Then many of us could have ever imagined a few short years ago. They will create more jobs, higher salaries, and more
revenue for their cities and counties. They will impact educational attainment and health outcomes, and frankly they will attract people from the states that didn't or wouldn't figure out the power challenge. So my question is which one will we be? For ice entrepreneur A AB Banks is often quoted as asking who will build Arkansas if her people do not, and today I hope we're the generation who steps up to that challenge to build the state. In order, in order to do so, we need every tool possible and
Senate Bill 307 gives us a very
Senator Mark Johnson
Unverified
1:18:25
powerful one. Thank you. Senator Johnson Thank you, Mr.
Chairman. Uh, Mr. Lacey, I appreciate your presentation, and I appreciate the information you've provided to me recently on the opportunities that may be coming to Conway, which is not just my district, but it's also my hometown, sir, uh, when I graduated from Conway High School, the population was 14,000. I think now it's over
70,000 isn't it? And when you threw out that number about the electric demand a minute ago. You told me that earlier, but it still, it gave me a little shiver, so yeah, we got to do something, uh, and my friend Senator Murdoch is is a guy who was agreeing with him when he said, you know, maybe we need to take a few more days to digest it because this is a complicated bill. Have you had the opportunity, not on the overall, hey, should we do this? But from
some of the details in the bill that how this would affect and I guess from your standpoint of of being an industry recruiter. I should ask it, have you looked at how this might make us, you know, a shade more competitive than a neighboring state, a neighboring state that doesn't have an income tax, for example, or something like that. Is there anything that you see that could
Give us an edge by by moving ahead 96 hours or something
Brad Lacey
Unverified
1:19:57
like that. Well, I mean, again those questions that that I know many of us are being asked by the
Speaker 186
1:20:03
site location community is, do you have the power? I mean, they're not even getting to the point of talking about income taxes or any other thing. I mean that that first filter is do you have the power and if you don't, then they're going to move to a state that does, and so Absolutely, I think it gives us an advantage and you know,
we're, we're not unique. I mean, we're, we're one community that is working one big project, but there are other communities working big projects, and they're not just in the urban parts of the state and so I do think there is a A window of opportunity for us to do this. But those windows always close at some point and I just would caution us not to, not to miss the miss the opportunity. So
Senator Mark Johnson
Unverified
1:20:55
you're saying we're, we have the opportunity to be on the cutting edge where every state's going to have to be looking at this thing, but if we are kind of first out of the gate, then we'll we'll come out maybe at the finish line. Is that a fair way to sum that
Speaker 186
1:21:08
up? Yes sir, I would agree with that. I mean, it's, it's a national, it's a national issue, and as I said, some states are going to solve the problem fast. and those are going to be the states that can answer yes and get more and get more activity. There
Senator Mark Johnson
Unverified
1:21:22
is a new industry, and I say I call it a new industry,
you know what I'm talking about is the manufactured housing facilities going to Conway, and I talked to the plant manager and he He bragged on, and this is not just Conway, it's the whole state of Arkansas, but he bragged on the fact that we all know each other, we get along and we work together to cut the red tape, and he compared it to other places where there's a little more bureaucracy, maybe a lot more bureaucracy and a lot more lack of cooperation and I'm
I'm grateful that for all you do to help put that kind of thing together, but also I want to make sure that we're not in a position of putting any, any stumbling blocks in that, but, but again, thank you for all you do, Brad. Thank you for for coming today. I'm done, Mr. Chair. Thank you.
Senator Reginald Murdock
Unverified
1:22:16
Senator Murdock. Thank you, Chairman and thank you once again
and just real quickly, we all understand that need that you talk about in the in the prospects that we all want for many.
Places in our state we have those potentials, but I hope you can respect that those that others that have testified as it relates to who has to pay for this. And how we're just trying to do due diligence to make sure that on their backs that we at least consider the best way. It's gonna be some increase. We understand you got to get paid for. We understand from your position you're saying, hey, one question, where's the power? But before then, we still, you will not.
You would only respect us to make sure we go through this process right, and I hope you can respect that as you hear because nobody is pushing back against. Progress is process and making sure we do the right thing, the best thing to catch up to where the senators are and their due diligence because they've been working a long time on this, and we just got to get there for the people we represent, so we're going to
get there too. We're going to the state is going to be taken care of. Thank you.
Phyllis Mcmillan
Unverified
1:23:32
Thank you, sir. Seeing no other questions, it's next is Teresa Christie against. through this first pages. Thank you. Do
Speaker 190
1:23:46
you want these handed out just give them to me
Speaker 7
1:23:57
and I and the staff will hand them out here.
Speaker 192
1:24:05
We got the other against. Thank you so much. Go ahead. Are you ready for me? No, just wait until she gets, gets passed out.
Phyllis Mcmillan
Unverified
1:24:39
All right, introduce yourself and you're welcome to
Speaker 196
1:24:42
be in. Hi, I'm Terry Christie. Theresa's but I go by Terry, um, I was born and raised in a little town called Leslie, Arkansas, very, very proud bulldog when we used to have a school there. Um I come to you today because, and I'm, I'm going to probably amend some of the things I've planned on saying here today, but only slightly, um. I'm here to protect the people
Speaker 197
1:25:09
of the state. That's what I'm here for, and that's your job. So I want to share with you what I know, and that's part of handing you that complaint that has been filed but it sounds to me like you guys aren't even aware of what's going on in the co-ops. There is a, I believe absolute criminal activity that needs to be
Speaker 196
1:25:31
Criminally investigated. Hopefully you guys will reach for that. The, the excessive salaries and the money takings from these people who have gotten in power and this bill
urbi in it currently. Makes people where they almost can't get out of what's happening already, and if you'll read just some of those allegations, it's much deeper than that, but I encourage you. There's a Facebook group called Petit Gene Electric Gone too far. You'll learn a lot just from going on that, joining that group, see what's going on. There are people last month they have little tiny houses. With $1100 electric bills and they have wood heat.
It is excessive and I think there may be a, I don't know who, but someone has snuck some verbiage into your bill. That is going to harm the entire state. If there is a group of co-ops, you need to investigate. There's a group of 13 of them. Petitjean is the spear, the tip of the spear, but it's getting bad for all of them. It's unsustainable. I'm going
Speaker 198
1:26:33
to go ahead and kind of read through some of what I my prepared remarks, but I want you to
understand that um some of my remarks may be harsher if I read through them without editing myself now that I've heard that there are some of you people, I mean, honorable. Representatives who just don't know. I understand the Public Service commission cannot give their opinion on political matters, so the questions you ask them, they can't even share and maybe I
Speaker 197
1:27:00
can share a little bit of that for them. OK, so I'm just going to read this because it's easier for me that way, if you don't mind.
Speaker 196
1:27:15
And sorry if this seems a little bit harsh just ahead,
Speaker 204
1:27:21
but you'll understand I'm gonna warn you it won't be me, if
Phyllis Mcmillan
Unverified
1:27:27
you say ugly if you Tell us of criminal activity again, this is not a court. This is a proceeding of information. Your redress on most of these is, is your co op board, but we want to hear, hear your issue,
but do not imply criminal criminality without, without this being a court, and I would appreciate it. I would appreciate that in the future and you're welcome to begin. OK. Um, again, I'm Terry.
Speaker 196
1:27:58
And I want to tell you guys that I believe there's a wave of trouble to come if this bill passes in its current form. It's going to be like nothing you've ever seen before. Desperate people are driven to do very desperate things, and
that's what this is going to help pro propagate. On simple wording that you can change. Crime will rise. Businesses will close. And a long be because this bill passed. Without it being fixed first.
Speaker 197
1:28:36
Allowing co-ops to run amok as grossly unregulated monopolies. Just a line. A few fat pockets is not worth
Speaker 196
1:28:46
it. It won't take long for the state to fall into a state of legendary ruin. Please don't do that. Don't do it this way. This bill As written, would be state sponsored energy terrorism. If passed, it will result. In Arkansas. Becoming a
Speaker 198
1:29:08
third, the 1st, 3rd world state in the USA. Approximately 65,000 give or
Speaker 196
1:29:18
take men, women, and children in the petted gene electorate cooperative. are suffering from the fact that Pettain Co op is already Doing much of the A and dealings that you've been tricked. In trying to legitimize. This is a shameful legislation on that fact. Please don't vote for it as it is. Please vote no. Petitjean continues to divide judges' orders. Administrative law judges
through the Public Service commission, they are, they will not follow those judges' orders right now and you
Speaker 196
1:30:08
um. And the most the the most Oh, and the formal investigation into the most serious bad acts hasn't even begun yet through the PSC.
Your bill as it's written. Has the effect of stopping them from trying
Speaker 200
1:30:27
to protect. The people, the public service commission. And the consequences. are that it encourages those
Speaker 196
1:30:35
who are malfeasant to do even more harm. I'm going to give you a couple of examples real quick. Let's
Speaker 201
1:30:44
take for an example an elderly widow. She lives in Van Buren County.
Speaker 196
1:30:52
She's a great grandma. She doesn't get around good enough. She's pretty much homebound or she would be here today crying in front of you. She doesn't want anything more. than to live out the rest of her days in the home that she and her husband built and raised their family in. She's on Social Security. Do you think she can pay these 1111
$800 to $2300 electric bills that Petiten co ops got last month, and it's not the electric per kilowatt rate they're doing it on. They're charging all kinds of fees, like 5 different ones. It's, it's pretty intense. So that's what that complaint that I passed out was so you could see some of the allegations. They're very limited in scope. It'll go more in depth later. Um
Speaker 198
1:31:43
Anyway, there are many schemes and That the co-ops are thrusting. That are making outrageously
Speaker 196
1:31:54
excessive electorate bills, and this is already happening. Before this is signed because they're defying Administrative law judge's orders. And the Public Service commission's findings. Um You don't want me to
Speaker 197
1:32:08
list some of the criminal allegations, so I won't. So
Speaker 196
1:32:13
I'm going to skip that part of that paragraph. But I believe you should be calling for investigations and
Speaker 200
1:32:24
forensic audits of co-ops in Arkansas. Instead of considering providing a short sword
Speaker 196
1:32:34
and a shield. Where charlatans who are already bankrupting the citizens. People have no
Speaker 200
1:32:40
way of getting the help they need through the public service. Commission
Speaker 196
1:32:48
That poor grandma prays. This is heartbreaking. Because of what that co op. is doing
She prays the Lord takes her before she is pulled out of her home. Because she can't pay this. Another hardworking family. They've got a toddler and a teen. They're trying their level best to raise their kids. With their conservative principles, values, and pride. These are salt of the earth.
They vote red, they go to church on Sunday. They pay what they owe. They're multigenerational arcans for months, there are co-ops excessive electric bill that includes all these other little riders that they're sticking in there. That this bill is going to allow this to get worse. Their bill far exceeds their mortgage, and they have wood heat.
They never dreamt. They'd have to depend on a food bank. To feed their kids. They work hard. I suppose it gets easier to swallow your pride. And do things you never imagined you'd do when When your children are hungry. Ironically, That very food bank that they got the food to feed their family from. The co op, the co op donated the food from the member from the
profit of the people they're taking it from to feed them while they're taking their money. Here, have some soup. No, and it's getting worse. This is going to go statewide if you don't fix those little details in this. I am all for Arkansas competing in the nation. I am not for Arkansas starving out. The people of Arkansas. Um, oh, I don't know what you're doing for Saint Patrick's Day.
But that very same co op's having a party. They're serving brisket. 39, 99 a pound. They're paying
Speaker 197
1:35:12
for that very expensive brisket with a member's money. They're throwing a party. Let them eat
Speaker 208
1:35:19
brisket is what these people who went without heat in this freeze. There were people huddled with propane tanks with something you would heat an outbuilding with rather than turn on their heat, they were so afraid.
Speaker 199
1:35:42
state. I love the people of this state, and this can't be allowed to happen. Make those
Speaker 196
1:35:54
changes. Stop this bill. Mm Shifting money moving. Unsustainable business practices, pocket lining, unfavorable loans. Kickbacks and worse is happening right now in your Arkansas
Electric Cooperatives. These are supposed to be nonprofit entities that are member owned. Members are shut
Speaker 208
1:36:12
out, they're not even allowed to go in there when they have a meeting. They locked the door. Out of the building. You can't be here. You have no say. Just give me your money. And if you can't afford it, sleep
Speaker 198
1:36:31
in the dark. Instead of, instead of providing some, some basic cover.
For corruption and malfeasance. This bill It's codifying it. Those
Speaker 224
1:36:46
changes must be made. Could you, could you
Speaker 222
1:36:51
explain what you're talking about by codifying malfeasance. I'm
Phyllis Mcmillan
Unverified
1:36:54
trying to see who's talking. I am chair. Oh, I'm sorry. I thought it sounded like it was coming you need to speak to the bill when you don't want me to speak about
Speaker 225
1:37:10
things that alleged a crime that I don't speak over me or you'll
Phyllis Mcmillan
Unverified
1:37:15
sit down. I apologize. I ask you to explain the codification of malfeasance in this bill. Please do so. The codification of malfeasance in
Speaker 198
1:37:20
this bill. Um, I wish I had my copy of
Speaker 226
1:37:22
it, so I'll have to paraphrase. Go ahead. Go ahead, go ahead and go get it. Actually, let me just check.
Phyllis Mcmillan
Unverified
1:37:41
We are, we are the number 6. We have 2 more. to ask for a con. to you. When I describe the codification of malfeasance.
Speaker 197
1:38:12
It's the cover it gives these people who are already doing things that are currently unlawful. Where, where is
Speaker 73
1:38:17
that in the bill, please? I'll have to put
Speaker 196
1:38:19
it'll take me a minute because I don't have a highlighted copy, unfortunately. And as you know this is a
Speaker 198
1:38:31
60 something page bill that was just pushed through.
But it should be. OK, this will
Speaker 196
1:39:07
help you. Section 6. Arkansas Code 234-4-902 is amended to read as follows.
A co op shall not be subject to rape case procedures and hearings. By the public Arkansas Public Service Commission unless By action of its board of directors, The co op elects to be a subject to rape case procedures and by the commission. Or A proposed change in the
Speaker 198
1:39:39
co op's rates and charges exceeds the 10% of total gross revenues.
Speaker 196
1:39:50
Or 10% of the co op's member consumers petitioned the commission to apply rape case procedures. And the commission determines there is substantial evidence indicating that the rates and charges are unreasonable. That codification, there are a couple of other spots in there and I'll be happy to get that with you later. I just don't think you want me to read all 68 pages, but that alone, because these things are already happening happening when under the current Arkansas regulation. It's not supposed to be happening, and
that's what that complaint that I provided all of you, and it's my prayer that you guys did not realize that this was happening in your co-ops. I know you have a lot of work to do, but this is very important. If I can get back to my remarks, I'm almost done. Did that help? Thank you. Oh Let's
Speaker 198
1:40:47
see, I'm going to get into some just some bill specifics that I have in my notes here.
Number one. It is a fact. We all know this, that this bill will raise everyone's electric bills. Um The
Speaker 197
1:41:07
problem is, is it encourages extra free fees known as riders, and what I just read you about the co ops. They're excluded from this stuff. That's got to be changed because the
Speaker 196
1:41:19
majority of Arkansans are under Arkansas Electric co-ops. The more the majority of our
geographical area, especially if you're looking for, um,
Speaker 197
1:41:31
What do they call data mines or or if you're looking for those kinds of places, that's going to be in the rural areas. Um The problem is these writers Aren't going to be going through any proper review process from the public service
Speaker 198
1:41:47
commission, and we already have that happening in Petit Gene Electric Co op, and I believe a couple of the others,
Speaker 197
1:41:53
just not to the degree of extreme fees, the Petitjean is putting on people. Um,
The 10% below the national average line. As y'all were talking about earlier, I just want to clarify I do believe that is misleading because it only
Speaker 198
1:42:13
applies to the base rate. The base rate. Not all these extra fees. As it's written, families, small businesses, and farmers.
Speaker 196
1:42:25
We'll pay more While conserving less energy. Um As it's written,
This gives those co-ops, the ability to raise rates. Without oversight as unregulated monopolies. They don't have the same regulations
Speaker 197
1:42:44
that a for-profit business does. However, I think there may be bringing in even more profits than some of them. But it's just not going back to the
Speaker 196
1:42:54
members and into the. Into where it should be. I'm troubled that
Speaker 197
1:43:01
you brushed this through without public input earlier? I mean this was
Speaker 196
1:43:09
It's 62 or 60 something pages long. It was filed late Tuesday afternoon. Less than 48 hours before this hearing.
Speaker 197
1:43:15
And this morning it still wasn't on your calendar. If it hadn't been for a whistleblower blower. I, we wouldn't have known you were doing this, only the people who were supporting it would have known. Point of order. Ma'am,
Senator Mark Johnson
Unverified
1:43:40
I read the calendar very carefully. It was on the
calendar, and I want to make clear that Give me your point of order. The point of order chair is that I indeed read the calendar, and it was on the calendar and I just want to correct the record for that, so there's no, well I certainly think we may be going a little too fast. We certainly did not hide that from the public. It was on the internet and I cause I even looked at it yesterday afternoon. Thank you, Senator Johnson, if I may, and I do believe this is likely a
Speaker 197
1:44:12
There are always technical errors when you deal with technical things, and this was done so quickly, but I, I do want to let you know that when I go on the website as a layperson, I found it on the internet too, but I got it through a link. On the website, when you look at the calendar, it did not show. That was 3 a.m. this morning. But at the same time, the whistleblower that sent me the link, it took me right to it. So there was something technical there I just want to clarify
Speaker 196
1:44:44
that I'm not, wasn't misleading, um. The bill as it's written allows cooperatives to increase profits. Which is really strange considering that these cooperatives
Speaker 198
1:44:55
by law are nonprofit entities. We're dealing with excessive. I have also filed complaints with the
Speaker 197
1:45:01
IRS. There have been complaints, but this is within the last. Couple of weeks, so much
Speaker 196
1:45:07
of that you guys aren't aware of and rushing this through right now is making you rush this through
before you find out how bad it is out there. Um,
Speaker 197
1:45:19
I'm not sure what district you serve, but you said you live in Conway is Greenbrier in your
Speaker 67
1:45:27
district ma'am, ma'am, I apologize. We will, we will ask questions, so all right, thank you. OK, well, I'm just going to get to closing now. This is
Speaker 201
1:45:35
something that I think you all need to hear.
Speaker 197
1:45:46
If you want to learn how fast rural Arkansans will vote a rhino out of office past this trash. I pray
Speaker 196
1:45:55
that those who sponsored this will have their eyes open today. And choose to do the right thing. Let this committee be the place where a bad bill that harms Arkansans goes to die. Our Arkansans need you to kill this bill. Fix it and bring it
back. Get us the infrastructure. Don't hurt every co op member. Don't. And please, moving forward. Try to be more careful. In choosing what donkey, you
Speaker 208
1:46:27
hit your cart to. That's all I've got to say. All right, Senator Flowers. Just one question. You can
Senator Stephanie Flowers
Unverified
1:46:39
keep the answer short. You know, I'm looking at your complaint, uh,
I suppose you filed it. There's no file mark on it to the Arkansas Public Service. It's been filed, OK. And, and in your testimony you talk about these bills that are so high and what you're alleging here does seem mighty high to me, but I certainly would have liked to have seen one of those bills
attached to your complaint, uh, for $1100 for electricity from petty Jean Co op. For a tiny house.
Speaker 226
1:47:22
With a wood burning heater. One of the women that I was speaking specifically have one of those bills. I can show you if I can
Speaker 248
1:47:30
get a phone here to pull them up. I can absolutely show it to you, you can just send
Phyllis Mcmillan
Unverified
1:47:37
it to me. You can email I will be happy to. Thank you. That's all. Thank you. So I'm going to address some of your statements. I texted staff at 8:38 yesterday morning, and that has been on the calendar since 9 o'clock yesterday.
And, uh, you, you stated that the co-ops aren't regulated. They are re don't, they are regulated by their board and by the PSC at this time. And you have those, those areas of redress for your complaints. I appreciate your testimony, and we will go
Speaker 250
1:48:18
on. Thank you. Next is Jack Thomas, and this is
Speaker 251
1:48:22
4. Introduce yourself and you're watching me again. Yes, sir. Jack Thomas with the Little Rock Regional Chamber of Commerce. Thank you, Mr. Chair, members of the committee. I appreciate the chance to be here today with, with you all, um, I work in economic development for the Little Rock Regional Chamber and I'm here today to speak on, on, on this bill on behalf of
economic development from an economic development perspective. As a regional chamber, we run a regional economic development alliance that covers 13 counties from Pope County to White County to Clark County to Jefferson County, and their, their organizations similar to us that represent other regions in the state. The Northeast Arkansas Intermodal District, the Northwest Arkansas Council, the Fort Smith Regional Chamber, etc. uh, prior to this job, I had the chance to uh to work on the business development team at the Arkansas Economic Development Commission, and in
that role had the chance to work projects all across the state from several steel projects in Mississippi County to a few timber projects and cross it, chased a few projects in West Memphis and Marion all over the state. Senator McKee made a point yesterday and, and he's exactly right. He said that Economic development is competitive, and I'm often asked, who do we compete against as, as a state and just like the Razorbacks compete against Alabama and Tennessee and Mississippi. We find ourselves competing for jobs against other SEC states.
You all know this. You also know how time sensitive these deals are, and the reality is that the states and the communities that are prepared to move the fastest are the ones who win. So far in the first quarter of 2025, we've hosted 4 Fortune 200 companies looking to invest in the state. Collectively, they want to invest over $25 billion. In our state. These aren't 10 megawatt projects, we're talking thousands and thousands and
thousands of megawatts, and what we know is that megawatts equal jobs and jobs equal tax revenue. And with every deal that we work, I, I like to take out a spreadsheet and break down the millage rate and look at the tax revenues that go to fund roads, you know, how much goes to police and how much goes goes to the schools and I'm here to tell you today that that there are projects that are evaluating our state right now. That would provide annual revenues to individual school districts in excess of $10
million annually. It's unprecedented. But there's one catch. Like you've heard today, we simply do not have the power to meet the demands of these opportunities. You start doing the math on generation and, and, and I do think we have the opportunity to land 1 or 2 more steel mill type projects where the investments in the in the bees. I don't know that. I'm not an expert, but, but I do think we have the ability to do one or two more of those, those type projects. However, those one or two
projects might be limited to one or two communities, and what this bill does is it creates an opportunity to unleash power all across the state, giving communities both urban and rural, the chance to say yes. The chance to attract jobs that create higher salaries for their people, and the chance to capture revenue that goes to fund the roads we drive on, goes to fund the police and fire departments that protect us and perhaps most importantly goes to fund our schools. I'll close with this, and this is the
reality that these generational investments are going somewhere. And the high paying jobs with them. We can stand on the sidelines, and we can watch the world's most innovative companies choose to invest in Alabama or Mississippi or Tennessee, or we can compete and we can take the necessary steps that it takes to win. Companies are watching the nation's top location advisors are watching, and we all know that our competition is watching. So I appreciate the chance to be
here today. I've got a lot of respect for the work that you all do,
Speaker 6
1:52:35
and I'd be happy to take any questions. I want to begin, uh, Jack, Through the traditional process. If we do not do this and these projects come to development. Because the need is there. Will Well the the bill, the pro the process we have now, do you know
if the billing will be higher or lower through this process, Mr. Chair, I
Speaker 251
1:53:04
don't think we could even get to that point where we're considering that, given the lack of power that's available for these projects to even come to that point. So you know, I'm not a rate expert by any means, but my experience of being on the front lines of seeing these companies and their interests in our state is that if we can't answer the basic questions of if we have the We don't even get into the right structures. So, and, and that's where we are now is, is, is in a position where we can't, can't
Speaker 6
1:53:30
answer that question definitively. OK, I'm gonna take a little levity, Senator Desmaine, if we do not do this process, there's a process in place where that power can be built. What will happen if we do nothing compared
Senator Jonathan Dismang
Unverified
1:53:49
to doing this. No, you're absolutely right, the big benefit to this bill is that it will decrease the capitalized carrying costs by some degree because we're allowing that building to occur during the construction work in progress.
That is the bottom line, no matter how you work that formula. The end day, the long term rate that will be assigned. Number 11 thing this bill does contemplate is making sure that a user pays for their fair share. OK, that's contemplated in the bill. But Uh, that, that, that the other amounts, some extra generation, whatever it may be, that rate will be lower under this than the traditional model because the capitalization cost will be less. That is, I don't even think that's an arguable point
to deal. So again, it's, it's, we've got one vehicle out there. We do have CWhip, by the way. I've heard it talked about a couple of times that we, we don't have well we have a potential to do seed but no one's done it because no one knows what the parameters are. So that's what this bill is and it's very core is setting the parameters in place for CWIP, so we're supposed to make the policy and say what we want it to look like, and one of the things we wanted, we talked about the length of this bill, the vast majority of this is oversight. To run the bill itself, the legislation.
I'd have to look maybe maybe 6 pages. To actually
do what we're doing, the rest of this bill is putting
Speaker 6
1:55:13
an oversight. And a PSC authority. All right, thank you.
Phyllis Mcmillan
Unverified
1:55:17
Thank you. Next. Appreciate it, Mr. Thomas. Next we have Cliff Chitwood. 4
Speaker 244
1:55:25
Like that's just running. Introduce yourself and you're
Speaker 256
1:55:34
welcome to begin, push your button. Thank you. Cliff Chitwood, I'm president of Mississippi County Economic Development Foundation. I would like to thank y'all for being allowed to address this hearing. I'd like to thank the legislators who I know have put in a lot of work to try to come up with a bill that both solves the problem that my colleagues have expressed and yet retain a fair amount of consumer. Protection speaking about the people in in
the year 2002, the people of Mississippi County voted to tax themselves 10 cents for economic development purposes. To date, we have invested $72 million of their money. The state has been a good partner to us. They have invested through incentives and tax backs and other things approximately $350 million. So that $425 million has brought in over $10 billion in private investment.
$10 billion even with a maximum tax property tax abatement of 65%. That's still $3.5 billion going into the schools, and it's created over 11,000 jobs. There wouldn't hardly be a Mississippi county if people hadn't made undertook to help themselves that way, uh, and every project has happened because Arkansas has had an adequate and correctly priced source of power. If we lose that, my
colleagues are exactly right. We won't even see the projects. They'll just go elsewhere without even looking at us, so I would strongly urge the passage of this bill. I'll end with a short story. James Watt, who invented the modern steam engine was given an English duchess a tour of his factory in the year 1780. She went through the factory. She saw sweating men. She had saw hot iron. and still pouring into gigantic
molds and not understanding when it was over, she said, Mr. Watt, what do you make here? He says, Madam, I make here what the whole world desires power, and that hasn't changed in the last 250 years. Thank you. Is there any questions? Go ahead,
Senator Mark Johnson
Unverified
1:57:55
Senator Johnson. Thank you, Mr. Chitwood, and thank you for all the good things you've done, and I've had the opportunity to work with you for much smaller project, but I still think an important one.
If we waited till Tuesday to pass this bill out, do you think it would bring our economic development efforts to
Speaker 256
1:58:20
screeching halt. Well, no, we're never going to stop, but I will point out, and this is a dangerous thing. We we lost a project this year, or I think we're going to lose it because the company needed a gigawatt. And we don't have a gigawatt, uh, neithergy nor the co-ops, and it would have been a 5500
job $7 billion project and they wanted to come to Arkansas, but we were not able to give them a timely manner in which we could produce that. So the quicker I can call them back and say yes, maybe we can stay in that competition. OK, thank you
Speaker 161
1:59:00
very much. Thank you, Mr. Chair. All
Phyllis Mcmillan
Unverified
1:59:05
right. There is no no more testimony for or against. We, uh,
We'll, uh, we'll take that motion up. I'm going to let them close for the bill. Closer your bill, uh, I'll accept a motion. Motion and a second by Senator McKee and a discussion. All in favor say aye. I opposed like sign. Thank you, Senator. You passed your bill. Thank you. We're adjourned.
Agenda
Call To Order
SB242 Hill TO AMEND THE LAW CONCERNING LOANS INVOLVING THE STOCK OF A STATE BANK
SB307 J. Dismang TO AMEND THE LAW CONCERNING PUBLIC UTILITIES; TO CREATE THE GENERATING ARKANSAS JOBS ACT OF 2025; AND TO DECLARE AN EMERGENCY.
Adjourn
Documents
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|---|---|---|---|
| Agenda — INSURANCE & COMMERCE - SENATE, Feb 27, 2025 | Agenda | 2 | Official source ↗ |
Speakers
Speaker 7
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Senator Jonathan Dismang
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Senator Matt McKee
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Senator Reginald Murdock
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Senator Stephanie Flowers
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Senator Justin Boyd
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Senator Missy Irvin
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Brandy Mclean
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