When a state legislator gets involved in utility rate-making by way of the backdoor of “special language” in the Joint Budget Committee, it’s well-advised to follow the smell of the sausage making.

So it is tomorrow. The scent leads us to Sen. Terry Rice, who proposes to insert special language in the appropriation bill for the Arkansas Public Service Commission.

Advertisement

Here’s the special language.

It has nothing to do with the PSC budget (except by way of message-sending, I suppose.)

Advertisement

It will override this PSC order in a case over Entergy’s formula rate plan.

This is complicated stuff, but I give you a summary from a very interested party — Jordan Tinsley, a lawyer who represents the Arkansas Electric Energy Consumers, a group of major users of electricity.

Advertisement

The order at issue said state law and Entergy’s rate tariff didn’t support a change Entergy wanted to make in rate calculation. The PSC order had the effect of preventing Entergy from collecting roughly $67 million disallowed in 2017. It wanted a “netting adjustment” to add the money in 2021, but the PSC held that was not allowed by a 4 percent cap on annual rate increases. That cap was part of an agreed plan that provided Entergy other benefits, such as a speedier regulatory process and the ability to get approval for putting various expenses in its rate base.

Tinsley says Rice’s special language, with its retroactive application, will tie the commission’s hands on adjusting rates. The immediate effect would be to raise 2021 electric rates by an estimated $67 million.  “That’s going to affect every single Entergy ratepayer,” Tinsley said.

For now, the order, which is not final, only affects the adjustment for one year. But Entergy would like to make such adjustments to the law in the future. It would provide a means for Entergy to recover amounts it was unable to collect in previous years and thus nullify the 4 percent cap, Tinsley says.

The issue here is less to me about rates, but about establishing rate policy through a clandestine measure inserted in a bill about state agency spending, not utility rate policy.

Advertisement

I’ve sent Rice an email about his proposal. His special language issues a general justification about rate stability, but doesn’t address the manner of achieving it without meaningful legislative debate.

Tinsley’s group, which just learned of this proposal today, said his group will attempt to present its side in Joint Budget tomorrow.

I’ve seen this rodeo before. The corrupt ad litem program for legal representation of children in domestic relations cases that eventually sent a couple of senators to prison was a product of special language. Then-Sen. Johnny Key used special language for a secretive explosion of the enrollment cap for a profit-making “virtual charter school,” still a favorite of the legislature. There are too many more to count.

When special language gets added, it goes unquestioned on the floor if a bill comes out of Joint Budget with a do-pass. Nice way to make sausage, if you control what goes into the grinder.

UPDATE THURSDAY MORNING: The Joint Budget passed over this item Thursday morning. I’ll be checking for further developments.