About the Bill 

SB307 | Sen. Jonathan Dismang and Rep. Les D. Eaves | Senate Committee on Insurance and Commerce
This bill would retool the ability of public utilities in Arkansas to finance strategic investments by allowing the utilities to recover costs during the period of construction instead of after, as the current law mandates. It would reduce the oversight of the Public Service Commission in the process and would change the energy rate increase rules without protections for lower-income residents.

AACF Testimony on March 17, 2025, House Committee on Insurance & Commerce 

Pete Gess, Economic Policy Director, Arkansas Advocates for Children and Families 

Good afternoon, Mister Chair and members of the committee. Thank you for this opportunity to speak against Senate Bill 307 in its current format. 

As you may know, Arkansas Advocates for Children and Families has been around for almost half a century. Our mission is to ensure that all children and their families have the resources and opportunities to lead healthy and productive lives. 

Given the importance of economic resources for families in Arkansas, we identify one primary concern with this legislation. 

Importantly, if this bill were to become law ratepayers will be harmed, especially low-income families. We know that the Public Service Commission may overrule the “no more than 10% below the national average” rate raise limit in this bill. But for the sake of the argument, let’s examine what this rule means for Arkansans. 

According to the 2023 US Energy Information Administration Electric Power Annual Report — the latest year available — Arkansas residential, commercial, and industrial electrical rates are all well below the national average. Across all sectors, Arkansas rates are more than 23% below national average. This means that electricity rates can go up by 18% and still meet the 10% rule. 

Thanks to California wildfires, higher fuel costs, and increased technology demands, electrical prices continue to rise across the country. Most experts agree that Arkansas is even more below average today than in 2023. If we estimate our current rates to be 30% below national average, as I have heard some of your Senate colleagues state, rates can be raised by nearly 28% to keep us 10% below the national average. 

But whether the typical ratepayer will see an increase of 18 or 28%, this will place a tremendous financial hardship on residential and commercial customers alike. We know that almost half the households in the state struggle to meet basic financial needs. Any increase of this magnitude will prove disastrous. Especially during this time of national economic uncertainty and high inflation. 

There are ways this bill could be amended to protect our low-income families. First, increase the required percentage below the national average to 15-20%; the appropriate amount can be determined by thorough analysis. Second, implement a hard percentage cap in the law, possibly tied to inflation. For example, limit increases to inflation plus 4%. Third, create provisions for low-income families by tying protections to participation in other public assistance programs or the federal Low Income Home Energy Assistance Program. 

Finally, I urge you to vote no on SB307 for two important reasons. We cannot both tout our low energy costs in Arkansas while putting in place a mechanism for dramatically increasing them. And in its current form, this bill will significantly harm many of your constituents across the state. 

Thank you.