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HomeMy WebLinkAbout226-21 RESOLUTIONF FA1'FTTF ti c, �µ Vq K AN5 PS 113 West Mountain Street Fayetteville, AR 72701 (479) 575-8323 Resolution: 226-21 File Number: 2021-0720 SOUTHWESTERN ELECTRIC POWER COMPANY TO INCREASE RATES: A RESOLUTION TO AUTHORIZE THE CITY ATTORNEY TO FILE A MOTION TO INTERVENE ON BEHALF OF THE CITY OF FAYETTEVILLE IN ARKANSAS PUBLIC SERVICE COMMISSION PROCEEDING 21-070-U AND OPPOSE THE APPLICATION OF SOUTHWESTERN ELECTRIC POWER COMPANY TO INCREASE ITS RATES WHEREAS, on July 23, 2021, Southwestern Electric Power Company ("SWEPCO") filed an Application for General Change in Rates and Tariffs with the Arkansas Public Service Commission; and WHEREAS. S WEPCO's proposed rate change would result in an electricity cost increase to the City of Fayetteville government. residents, businesses, and institutions of more than $10.000,000.00; and WHEREAS, the City of Fayetteville is not adequately represented by any other party to SWEPCO's rate increase proceeding as it is SWEPCO's largest municipal customer in the State of Arkansas and S WEPCO provides approximately 74% of all electricity consumed in the City. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes the City Attorney to file a motion to intervene on behalf of the City of Fayetteville in Arkansas Public Service Commission proceeding 21-070-U and oppose the application of Southwest Electric Power Company to increase its rates. PASSED and APPROVED on 9/14/2021 Page 1 Printed on 9/15/21 Resolution: 226-21 File Number. 2021-0720 Attest: 41/1 JL� �rrrrrr�� .1 Kara Paxton, City Clerk Treasure����; r • � Oe Page 2 Printed on 9115121 City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, AR 72701 (479)575-8323 Text File File Number: 2021-0720 Agenda Date: 9/14/2021 Version: 1 Status: Passed In Control: City Council Meetinq File Type: Resolution Agenda Number: A.1 SOUTHWESTERN ELECTRIC POWER COMPANY TO INCREASE RATES: A RESOLUTION TO AUTHORIZE THE CITY ATTORNEY TO FILE A MOTION TO INTERVENE ON BEHALF OF THE CITY OF FAYETTEVILLE IN ARKANSAS PUBLIC SERVICE COMMISSION PROCEEDING 21-070-U AND OPPOSE THE APPLICATION OF SOUTHWESTERN ELECTRIC POWER COMPANY TO INCREASE ITS RATES WHEREAS, on July 23, 2021, Southwestern Electric Power Company ("SWEPCO") filed an Application for General Change in Rates and Tariffs with the Arkansas Public Service Commission; and WHEREAS, SWEPCO's proposed rate change would result in an electricity cost increase to the City of Fayetteville government, residents, businesses, and institutions of more than $10,000,000.00; and WHEREAS, the City of Fayetteville is not adequately represented by any other party to SWEPCO's rate increase proceeding as it is SWEPCO's largest municipal customer in the State of Arkansas and SWEPCO provides approximately 74% of all electricity consumed in the City. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes the City Attorney to file a motion to intervene on behalf of the City of Fayetteville in Arkansas Public Service Commission proceeding 21-070-U and oppose the application of Southwest Electric Power Company to increase its rates. City of Fayetteville, Arkansas Page 1 Printed on 911512021 Peter Nierengarten Submitted By City of Fayetteville Staff Review Form 2021-0720 Legistar File ID 9/14/2021 City Council Meeting Date - Agenda Item Only N/A for Non -Agenda Item 9/10/2021 SUSTAINABILITY/RESILIENCE (631) Submitted Date Division / Department Action Recommendation: Staff recommends intervening in Arkansas Public Service Commission docket: 21-070-U, in the matter of the application of Southwestern Electric Power Company for approval of a general change in rates and tariffs. Account Number Project Number Budgeted Item? Does item have a cost? Budget Adjustment Attached? Budget Impact: Current Budget Funds Obligated Current Balance Item Cost Budget Adjustment Remaining Budget Fund Project Title V20210527 Purchase Order Number: Previous Ordinance or Resolution # Change Order Number: Approval Date: Original Contract Number: Comments: CITY OF FAYETTEVILLE ARKANSAS MEETING OF SEPTEMBER 14, 2021 TO: Mayor and City Council THRU: Susan Norton, Chief of Staff FROM: Peter Nierengarten, Environmental Director DATE: September 7, 2021 CITY COUNCIL MEMO SUBJECT: Southwestern Electric Power Company (SWEPCO) Rate Case Intervention RECOMMENDATION: Staff recommends intervening in Arkansas Public Service Commission docket: 21-070-U, in the matter of the application of Southwestern Electric Power Company for approval of a general change in rates and tariffs. BACKGROUND: Southwestern Electric Power Co. (SWEPCO) is one of two utilities providing electricity within the City of Fayetteville. In 2020, SWEPCO provide approximately 795 million kWh of electricity to residents, businesses and other institutions in Fayetteville, accounting for 74% of electricity consumed in the City. On July 23, 2021, SWEPCO submitted a request to the Arkansas Public Service Commission to update its prices. The company seeks recovery of ongoing operation and maintenance ("O&M") and capital for its generation units associated with several utility distribution and generation upgrades, including: • New wind power generation facilities in Oklahoma • Upgrades to the Flint Cleek Coal Plant to comply with the U.S. EPA Coal Combustion Residual (CCR) and Effluent Limitations Guidelines (ELG) rules • Transmission & distribution improvements to increase reliability of service to customers If approved, new rates would likely go into effect by the middle of 2022. A Fayetteville residential customer using 1,000 kilowatt-hours per month would see a total bill of $130.20, an overall bill increase of $18.89 per month, or about 17%. Commercial, industrial and public customers would see an 8% rate increase. DISCUSSION: The Arkansas Public Service Commission allows any person or entity whose interest may be directly affected by Commission action to intervene as a party to any docket. A petition to intervene shall contain: • The nature of the petitioner's interest in the proceeding Mailing Address: 113 W. Mountain Street www.fayetteville-ar.gov Fayetteville, AR 72701 • A demonstration that the petitioner's interests are not adequately represented by any other party • The specific objection to the applicant's proposal • Any other reasonable information Other affected entities who have submitted petitions to the Arkansas Public Service Commission to intervene in this rate case include the University of Arkansas System, Walmart Inc. and the Sierra Club. The deadline to submit intervene in this rate case is 4:30 pm on Tuesday, September 21, 2021. BUDGET/STAFF IMPACT: The proposed SWEPCO rate increase would have a direct budgetary impact of approximately $80,000 per year for City of Fayetteville Government electricity costs and over $10M per year in additional electricity cost for the residents, businesses and other institutions in Fayetteville. Attachments: SWEPCO News Release SWEPCO REQUESTS NEW ARKANSAS RATES July 23, 2021 SHREVEPORT, La., July 23, 2021— Southwestern Electric Power Co. (SWEPCO), an American Electric Power (Nasdaq: AEP) company, today submitted a request to the Arkansas Public Service Commission (APSC) to update its prices. The company seeks to recover environmental and resiliency costs associated with providing customers cleaner and more reliable energy. "We have made significant investments in wind -powered generation, specifically with the North Central Energy Facilities (NCEF) project," said Malcolm Smoak, SWEPCO president and chief operating officer. "It's a project that has environmental and economic benefits for SWEPCO's customers, saving an estimated $2 billion over the next 30 years." The APSC unanimously approved the NCEF project in May 2020. With no fuel cost for wind, NCEF lowers SWEPCO's overall fuel cost for power generation. This fuel savings and federal Production Tax Credits more than offset the cost of the new facilities, resulting in net long-term savings to customers. One of three NCEF wind facilities is now in commercial operation. The second and third facilities will begin operations later this year and early 2022, respectively. Arkansas customers get 268 megawatts (MW) of SWEPCO's total purchase of 810 MW. The $85 million request also includes recent investments in transmission and distribution facilities and reflects costs to operate and maintain equipment that delivers power to customers. It also establishes new tariffs for electric vehicles, lighting and other measures. If approved, new rates would likely go into effect in the first billing cycle of June 2022. An Arkansas residential customer using 1,000 kilowatt-hours per month would see a total bill of $130.20, an overall bill increase of $18.89 per month, or about 17%. This total includes SWEPCO's 2021 winter storm costs, which are about $7.72 per month for a residential customer using 1,000 kilowatt-hours per month. Base rates refer to the costs of building, maintaining and operating SWEPCO's electric system, including power plants, transmission and distribution lines and facilities to serve customers. Base rates do not include the fuel portion of the customer's bill, which pays for fuel and purchased power and is a direct pass -through to customers. About Southwestern Electric Power Co. (SWEPCO) SWEPCO, an American Electric Power (Nasdaq: AEP) company, serves more than 543,000 customers in northwest and central Louisiana, northeast Texas and the Texas Panhandle, and western Arkansas. SWEPCO's headquarters are in Shreveport, La. News releases and other information about SWEPCO can be found at SWEPCO.com. Connect with us at Facebook.com/SWEPCO, Twitter.com/SWEPCOnews, Instagram.com/swepco, Youtube.com/SWEPCOty, LinkedIn.com/company/swepco and SWEPCOConnections.com. About American Electric Power (AEP) American Electric Power, based in Columbus, Ohio, is powering a cleaner, brighter energy future for its customers and communities. AEP's approximately 16,800 employees operate and maintain the nation's largest electricity transmission system and more than 223,000 miles of distribution lines to safely deliver reliable and affordable power to 5.5 million regulated customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 30,000 megawatts of diverse generating capacity, including more than 5,600 megawatts of renewable energy. The company's plans include growing its renewable generation portfolio to approximately 50% of total capacity by 2030. AEP is on track to reach an 80% reduction in carbon dioxide emissions from 2000 levels by 2030 and has committed to achieving net zero by 2050. AEP is recognized consistently for its focus on sustainability, community engagement, and diversity, equity and inclusion. AEP's family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. For more information, visit aep.com. APSC FILED Time 9/27/2021 8 00 23 AM Recvd 9/25/2021 12 37 08 PM Docket 21 070-U-Doc 80 BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION IN THE MATTER OF THE APPLICATION ) OF SOUTHWESTERN ELECTRIC POWER ) DOCKET NO.21-070-U COMPANY FOR APPROVAL OF A GENERAL ) CHANGE IN RATES AND TARIFFS ) RESPONSE TO PETITION TO INTERVENE OF THE CITY OF FAYETTEVILLE Southwestern Electric Power Company has no objection to the Petition to Intervene filed September 15, 2021 by the City of Fayetteville Respectfully submitted, lsl Stephen K Cu ,man Stephen K Cuffman (75026) Mitchell S Dennis (2017110) Gill Ragon Owen, P.A. 425 West Capitol Avenue Suite 3800 Little Rock, Arkansas 72201 (501) 376-3800 David R. Matthews (76072) MATTHEWS, CAMPBELL, RHOADS McCLURE & THOMPSON, P A. 119 South Second Street Rogers, Arkansas 72756 (479) 636-0875 Attorneys for Southwestern Electric Power Company APSC FILED Time: 9/24/2021 3:32:13 PM: Recvd 9/24/2021 3:31:38 PM: Docket 21-070-U-Doc. 79 BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION IN THE MATTER OF THE ) APPLICATION OF SOUTHWESTERN ) ELECTRIC POWER'COMPANY FOR ) DOCKET NO 21-070-U APPROVAL OF A GENERAL CHANGE ) IN RATES AND TARIFFS ) GENERAL STAFF'S- RESPONSE TO THE CITY OF FAYETTEVILLE,-ARKANSAS' PETITION TO INTERVENE' Comes now the General Staff ("Staff') of the Arkansas Public Service Commission ("Commission") and for its Response to the City of Fayetteville, Arkansas ("Fayetteville") Petition to Intervene ("Petition") states as follows. l 1 On July 23, 2021, Southwestern Electric Power Company ("SWEPCO") filed an Application for approval of a general change in rates and tariffs.' 2. On September 15, 2021, Fayetteville submitted its Petition in accordance with the Commission's Rules of Practice and Procedure ("RPP") 4 02.2 3 RPP 4 02 sets forth the intervention requirements for any person or entity seeking full intervenor status in a Commission proceeding RPP 4 02(a) provides that: Any person whose interest may be .directly affected by Commission action and whose interest is not adequately represented by other parties may petition the Commission c for leave to intervene as a- Party in any Docket. (1) Contents of Petition to Intervene Every petition to intervene shall be in writing and contain r (A) .a clear and concise statement of the nature of the right or interest of the Petitioner in the proceeding ' SWEPCO's Application, (Doc. 33) 2 Fayetteville's Petition to Intervene, (Doc. 77). APSC FILED Time: 9/24/2021 3:32:13 PM: Recvd 9/24/2021 3:31:38 PM: Docket 21-070-U-Doc. 79 r. which entitles it to participate and which will be directly affected by the Commission's action, (B) a. demonstration that the Petitioner's interests. are not adequately represented by any other Party to the proceeding, _ (C) the specific objections, if any, of the Petitioner to the Applicant's proposal(s), (D) the grounds and issues of fact -and law upon which Petitioner wishes to be heard, and (E) any other reasonable information which may be required by Rule or order 4 In satisfaction of RPP 4 02(a)(1)(A), Fayetteville states in its Petition that: The relief requested by SWEPCO will directly affect Fayetteville, as well as its residents, businesses, and institutions, through increased electric rates Accordingly, Fayetteville has, an interest in this proceeding which entitles it to participate and which will be directly affected by the Commission's actions 3 5 In satisfaction of RPP 4 02(a)(1)(B), Fayetteville asserts that: The nature of Fayetteville's position as SWEPCO's largest municipal customer in Arkansas is unique and Fayetteville is 'not adequately represented by any other Party to the proceeding' Rule 4 02(a)(1)(B) Allowing Fayetteville to intervene in this proceeding will serve the public interest by apprising the Commission of the interests of a large municipal customer 4 6 Pursuant to RPP 4 02(a)(1)(D), Fayetteville states "Fayetteville has not yet finalized its position in this docket and- respectfully requests leave to fully articulate its interests in any additional testimony and/or comments filed -in this docket."5 3 Id. at 1-2, ¶ 3. 4 Id. at 2, 14 5 Id. at 2, 15 APSC FILED Time: 9/24/2021 3:32:13 PM: Recvd 9/24/2021 3:31:38 PM: Docket 2.1-070-U-Doc. 79 7 Additionally, Fayetteville has met the deadline for intervention set forth in RPP 4 02(a)(2) 8 Fayetteville has yet to identify specific grounds or issues of fact and law upon which it wishes to be heard pursuant to Rule 4 02(a)(1)(D) ofthe Commission's RPP Since Fayetteville has stated that "the relief requested by SWEPCO will directly affect Fayetteville, as well as its residents, businesses, and institutions, through increased electric rates", Staff concludes that granting Fayetteville's Petition is consistent with the RPPs and in the public interest to the extent Fayetteville represents its interests as SWEPCO's largest municipal customer 6 Staff asserts that it and the Arkansas Attorney General's Office will adequately represent Fayetteville's residents, businesses, and institutions WHEREFORE, Staff respectfully requests that Fayetteville's Petition to Intervene be granted for the limited purpose of representing itself as the largest municipal customer, and for all other relief to which it may be entitled Respectfully submitted, GENERAL STAFF OF THE ARKANSAS PUBLIC SERVICE COMMISSION By, /s/ Elizabeth LaRue -Grigg Elizabeth LaRue -Grigg Ark Bar No 03-217 6 Id., at 1-2 113 & 4 (emphasis added) Arkansas Public Service Commission 1000 Center Street PO Box 400 Little Rock, AR 72203-0400 T (501) 682-5443 Elizabeth.larue-grigg(a_arkansas.gov ki APSC FILED Time: 9/24/2021 3:32:13 PM: Recvd 9/24/2021 3:31:38 PM: Docket 21-070-U-Doc. 79 CERTIFICATE OF SERVICE I, Elizabeth LaRue -Grigg, hereby certify that a copy of the foregoing has been served on all parties of record via the ASPC Electronic Filing System on the 24th day of r September 2021 t By- /s/ Elizabeth LaRue -Grigg APSC FILED Time: 9/27/2021 3:12:24 PM: Recvd 9/27/2021 3:09:43 PM: Docket 21-070-U-Doc. 83 ARKANSAS PUBLIC SERVICE COMMISSION IN THE MATTER OF THE APPLICATION OF ) SOUTHWESTERN ELECTRIC POWER ) DOCKET NO. 21-070-U COMPANY FOR APPROVAL OF A GENERAL ) ORDER NO. 7 CHANGE IN RATES AND TARIFFS ) ORDER On September 15, 2021, the City of Fayetteville, Arkansas (Fayetteville) filed a Petition to Intervene (Petition) in the above Docket pursuant to Rule 4.02 of the Arkansas Public Service Commission's (Commission) Rules of Practice and Procedure (RPP). In support of its Petition, Fayetteville states that it is the second largest municipal corporation in the State of Arkansas and is a large retail and municipal streetlight customer of Southwestern Electric Power Company (SWEPCO) which provides approximately 74 percent of all electricity consumed by Fayetteville residents, businesses, and institutions. Petition ¶¶ 1-2 (Doc. *77). Fayetteville additionally states that the relief requested by SWEPCO in this Docket will directly affect Fayetteville, as well as its residents, businesses, and institutions, through increased electric rates and that its position as SWEPCO's largest municipal customer in Arkansas is unique and "not adequately represented by any other Party to the proceeding." Fayetteville adds that allowing it to intervene in this proceeding will serve the public interest by apprising the Commission of the interests of a large municipal customer. Id. ¶¶ 3-4• On September 27, 2021, SWEPCO filed a letter stating that it did not oppose Fayetteville's Intervention. (Doc. *8o) APSC FILED Time: 9/27/2021 3:12:24 PM: Recvd 9/27/2021 3:09:43 PM: Docket 21-070-U-Doc. 83 Docket No. 21-070-U Order No. 7 Page 2 of 3 On September 24, 2021, the General Staff of the Commission filed a Response to Fayetteville's Petition concluding that granting the Petition is consistent with the RPPs and is in the public interest to the extent that Fayetteville only represents its interests as SWEPCO's largest municipal customer. (Doc. #79) Findings and Ruling of the Commission Rule 4.02(a)(1) of the Commission's RPPs provides that a Petition to Intervene shall contain the following: (A) a clear and concise statement of the nature of the right or interest of the Petitioner in the proceeding which entitles it to participate and which will be directly affected by the Commission's action; (B) a demonstration that the Petitioner's interests are not adequately represented by any other Party to the proceeding; (C) the specific objections, if any, of the Petitioner to the Applicant's proposal(s); (D) the grounds and issues of fact and law upon which Petitioner wishes to be heard; and (E) any other reasonable information which may be required by Rule or order. The Petition is in compliance with the requirements of RPP 4.02(a)(1). Fayetteville has interests that will be directly affected by the Commission's action in this Docket in that it is SWEPCO's largest municipal customer in Arkansas;' those interests will not be adequately represented by any other Party to this proceeding; and its intervention is in the public interest. Accordingly, for good cause shown, Fayetteville is 1 Although Fayetteville also alleges that the relief requested by SWEPCO will affect "its residents, businesses, and institutions," Fayetteville does not provide a list of any ratepayers it proposes to represent in accordance with RPP 3.og(f) and thus is not granted intervention to represent those entities. APSC FILED Time: 9/27/2021 3:12:24 PM: Recvd 9/27/2021 3:09:43 PM: Docket 21-070-LI-Doc. 83 Docket No. 21-070-U Order No. 7 Page 3 of 3 hereby granted intervention for the purpose of representing itself as a municipal customer as a Party in this Docket. BY ORDER OF THE COMMISSION. This 27th day of September, 2021. Ted J. Thomas, Chairman Kimberly A. O'Guinn, Commissioner Justin Tate, Commissioner Mary Loos, Sec ary of the Commission I hereby certify that this order, issued by the Arkansas Public Service Commission, has been served on all parties of record on this date by the following method: _U.S. mail with postaga prepaid using the mailing address of each party as ind, ated in the official docket file, or Electronic mail using the emai3 address of each party as indicated in the official docket file.