Energy Efficiency Targets

Summary

*Note: In January 2023, the PSC issued Order No.  68 (per Docket No. 13-002-U), for program years 2024-2026. Per the order, the targets remain unchanged.

Origin

In December 2010, the Arkansas Public Service Commission (PSC) announced a Sustainable Energy Resource Action Plan for Arkansas (per Docket No. 08-144-U). That same month, the Commission issued 10 Orders directing the state’s four electric and three natural gas investor-owned utilities to implement the energy efficiency measures described in the Action Plan. Since then the Commission has issued orders approving and extending targets for several more years.

Electric Sales Reduction

• 0.25% in 2011 compared to a 2010 energy sales baseline
• 0.5% in 2012 compared to a 2010 energy sales baseline
• 0.75% in 2013 compared to a 2010 energy sales baseline
• 0.75% in 2014 compared to a 2010 energy sales baseline
• 0.9% in 2015 compared to a 2014 energy sales baseline
• 0.9% in 2016 compared to a 2014 energy sales baseline
• 0.9% in 2017 compared to a 2014 energy sales baseline
• 0.9% in 2018 compared to a 2015 energy sales baseline
• 1.0% in 2019 compared to a 2015 energy sales baseline
• 1.2% in 2020 compared to a 2018 energy sales baseline
• 1.2% in 2021 compared to a 2018 energy sales baseline
• 1.2% in 2022 compared to a 2018 energy sales baseline
• 1.2% in 2023 compared to a 2018 energy sales baseline
• 1.2% in 2024 compared to a 2018 energy sales baseline
• 1.2% in 2025 compared to a 2018 energy sales baseline
• 1.2% in 2026 compared to a 2018 energy sales baseline

Natural Gas Sales Reduction

• 0.2% in 2011 compared to a 2010 energy sales baseline
• 0.3% in 2012 compared to a 2010 energy sales baseline
• 0.4% in 2013 compared to a 2010 energy sales baseline
• 0.4% in 2014 compared to a 2010 energy sales baseline
• 0.5% in 2015 compared to a 2014 energy sales baseline
• 0.5% in 2018 compared to a 2015 energy sales baseline
• 0.5% in 2019 compared to a 2015 energy sales baseline
• 0.5% in 2020 compared to a 2018 energy sales baseline
• 0.5% in 2021 compared to a 2018 energy sales baseline
• 0.5% in 2022 compared to a 2018 energy sales baseline
• 0.5% in 2023 compared to a 2018 energy sales baseline
• 0.5% in 2024 compared to a 2018 energy sales baseline
• 0.5% in 2025 compared to a 2018 energy sales baseline
• 0.5% in 2026 compared to a 2018 energy sales baseline

Program Administrator Type

Arkansas' utilities administer the programs to meet the goals.

Cost Effectiveness and Program Evaluation

Arkansas uses the Total Resource Cost test (TRC) as its primary test for evaluating the programs intended to meet its goals. 

Utility Cost Recovery Provisions

Currently, Arkansas' regulated utilities are permitted to recover their Lost Contribution to Fixed Costs (“LCFC”, often called lost revenues or lost margins). In addition, each utility is permitted to earn a performance-based shareholder incentive between 4% and 8% of their program spending (based on commensurate 80% to 120% achievement), capped at 10% of the total net benefits generated by said programs.

Special Provisions

Nonresidential customers with a total aggregate demand of at least 1 MW and multiple facilities that each have a demand greater than 200 kW are allowed to opt out of the state’s energy efficiency program (per Act 253). Those that are allowed to opt out are further limited to customers not making any installations in the past five years incentivized or financed by the same utility assessing the charge (per Act 78). Nonresidential customers that opt out must submit affidavits stating that they have or will make investments in accordance with state energy efficiency goals. When a nonresidential customer opts out, the customer does not pay the Energy Efficiency Cost Recovery rider charges but must give up the option to take advantage of energy efficiency incentive programs.

More information on Arkansas' energy-efficiency targets is available on the PSC's online services website.