Arkansas Senate rejects legislation to increase energy production, attract industry

by Antoinette Grajeda, Arkansas Advocate
March 6, 2025

A bill that would alter the process for creating new electricity-generating plants to meet the state’s anticipated energy needs stalled in the Arkansas Senate Wednesday. 

As a result of at least two of the state’s coal-fired plants going offline by the end of 2030, Sen. Jonathan Dismang, Searcy Republican and lead sponsor of Senate Bill 307, said energy rates are expected to increase because Arkansas will have to buy energy from an out-of-state utility or build new sources of energy. The goal of the 62-page bill, also known as the Generating Arkansas Jobs Act of 2025, is to mitigate those increases, Dismang said. 

“This is a new path forward for us to create the energy that we have to create that will ultimately, because of that new generation that is required, be at a lesser cost of generation than it would be under the old model — the old model that does not have the roadblocks and the reviews and the approvals that this does at multiple steps in the process,” he said.

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Under the current model, Dismang said, interest is accrued during construction and then capitalized, creating “a significant jump in rates” once the power plant is operational. SB 307 recommends another option that would allow utilities to begin recovering costs incrementally during construction by enabling “a strategic investment” that he said would result in a “lower, long-term recovery rate for consumers.”

SB 307 proposes that the Arkansas Public Service Commission must approve a strategic investment within six months of application, “ensuring that it is in the public interest,” Dismang said. The PSC then has 60 days to approve the rider rates, but can request another 30 days if additional time is needed.

When construction begins and the new rate is being collected, the PSC will review that project every 12 months, Dismang said. Once completed, the PSC has a one-year audit period to make sure everything was “done prudently so that our ratepayers are protected,” he said. 

In addition to saving ratepayers money, Dismang said his proposal “provides more protection and oversight by the PSC because they’re able to monitor what’s happening through the entire process.”

Supporters of the bill have also said it will make Arkansas more competitive in attracting to the state new employers, such as data centers that may require a lot of energy to operate, which would create more jobs. 

Sen. Dave Wallace, a Leachville Republican who voted for SB 307, said he chopped cotton growing up because there were no other jobs in Arkansas, a factor that led many in his generation to leave the state.  

“You grow or you die,” Wallace said. “…We have opportunity to be in the lead and to have energy and to bring companies to our state…if we have power, we’re going to bring those businesses and Arkansas is going to grow.”

Sen. Reginald Murdock, D-Marianna, said the entire Senate believes in the concept of the bill, but he had concerns about the process and making sure to “protect our ratepayers, specifically the most vulnerable people in the state.”

“I think this process has taken away the ability to provide some alternatives, some Plan B’s, some Plan C’s, that could do a better job of protecting ratepayers if given the time to sit down and deal with this in a different way, from a time standpoint,” Murdock said. “So I do think there are some alternatives that can be brought forward that may help us.”

Sen. Jimmy Hickey, R-Texarkana, said it was important to watch out for ratepayers from a cost and risk standpoint. While he thanked Dismang for his hard work on a complicated bill and agreed action is needed, Hickey said SB 307 is not ready as is.

Hickey called for more discussion about the bill’s proposal to keep Arkansas’ rates at 10% below the national average, noting that by some estimates, Arkansas’ current rate is 25% below that threshold. He also noted that a better definition for “strategic investments” is needed. 

“It’s a whole lot easier to come down here and start throwing rocks at it than to sit and devise this type of policy, but again, I just don’t think that we’re ready to go forward,” Hickey said.  

Hickey was among 11 senators who voted against SB 307. The legislation received 17 affirmative votes, one shy of the 18 needed for a bill to pass out of the Senate. Murdock was one of four senators who did not cast a vote. Democratic Sens. Greg Leding of Fayetteville and Fredrick Love of Mabelvale, and Sen. Dan Sullivan, R-Jonesboro, voted present. 

The Senate voted in favor of Dismang’s motion to expunge the vote, which will allow him to bring SB 307 back to his colleagues at a later date.

Arkansas Advocate is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Arkansas Advocate maintains editorial independence. Contact Editor Sonny Albarado for questions: info@arkansasadvocate.com.

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