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Incentives/Policies for Renewables & Efficiency

Printable Version
Energy Efficiency Targets   

Last DSIRE Review: 07/28/2014
Program Overview:
State: Arkansas
Incentive Type: Energy Efficiency Resource Standard
Eligible Efficiency Technologies: Unspecified Technologies
Applicable Sectors: Investor-Owned Utility
Electric Sales Reduction2011 reductions: 0.25%
2012 reductions: 0.50%
2013 reductions: 0.75%
2014 reductions: 0.90%
Natural Gas Sales Reduction2011 reductions: 0.2%
2012 reductions: 0.3%
2013 reductions: 0.4%
2013 reductions: 0.5%
Web Site:
Authority 1:
Date Effective:
A.C.A. ยง 23-3-405
Authority 2:
Date Enacted:
AR PSC Order No. 17, Docket 08-144-U
Authority 3:
Date Enacted:
AR PSC Order No. 15, Docket 08-137-U
Authority 4:
Date Enacted:
AR PSC Order No. 16, Docket 08-127-U
Authority 5:
Date Enacted:
AR PSC Oder No. 24, Docket 06-004-R

In December of 2010, the Arkansas Public Service Commission (PSC) announced a Sustainable Energy Resource Action Plan for Arkansas. Along with this comprehensive plan, 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. These orders were passed on December 10, 2010.

Order 17 in Docket 08-144-U sets sales reductions targets for both electric and gas utilities. The PSC directed these utilities to file comprehensive energy efficiency plans for 2011, 2012, and 2013 with incremental energy savings.

In September of 2013,  by Order No. 7  in Docket No. 13-002-U, the PSC approved a request for an additional year of planning and established higher targets for 2014 (0.9% for electrics and 0.5% for gas utilities).  The utilities are now on a course to submit the next 3-year plan (for PY 2016, 2017, and 2018) by June 1 of 2015.  In the interim a contractor has been engaged to conduct a statewide EE potential study to inform the target-setting and EE planning process. Reasearch is also being conducted into making improvements and standardization of weatherization programs, C&I program standardization, and is preparing to make recommendations regarding the possible monetization of Non-Energy Benefits (NEBs) for incorporation into the commission’s cost-effectiveness tests.

Incremental energy savings for electric utilities:

  • 0.25% in 2011 compared to a 2010 energy sales (in MWh and therms) baseline
  • 0.5% in 2012 compared to a 2010 energy sales (in MWh and therms) baseline
  • 0.75% in 2013 compared to a 2010 energy sales (in MWh and therms) baseline
  • 0.75% in 2014 compared to a 2010 energy sales (in MWh and therms) baseline

Incremental energy savings for natural gas utilities:

  • 0.2% in 2011 compared to a 2010 energy sales (in MWh and therms) baseline
  • 0.3% in 2012 compared to a 2010 energy sales (in MWh and therms) baseline
  • 0.4% in 2013 compared to a 2010 energy sales (in MWh and therms) baseline
  • 0.4% in 2014 compared to a 2010 energy sales (in MWh and therms) baseline

At the end of 2013,  the cumulative energy savings compared to the 2010 baseline, would be 1.5% for the electric utilities and 0.9% for the gas utilities. The utilities filed their 3-year plans with the PSC in March of 2011.  All plans were approved for implementation beginning on July 1, 2011, including the recovery of energy efficiency costs through an Energy Efficiency Cost Recovery Rider (EECR) for each company.

Separate orders in Docket No. 08-137-U approved in December of 2010 adopted policies allowing electric and gas utilities to collect Lost Contribution to Fixed Costs (“LCFC”, often called lost revenues or lost margins) and to earn performance-based shareholder incentives of up to 7% of their spending on energy efficiency portfolios (with a cap).

In 2011, the PSC adopted Docket No. 06-004-R amendments to its Rules for Conservation and Energy Efficiency Programs (C&EE Rules) providing the details of the LCFC and Utility Incentives policies. On June 30, 2011, the Commission approved for each utility EECR recovery of energy efficiency program costs and LCFC, contemporaneous with the 2011 program year, and ordered that Utility Incentives sought by companies for performance would be decided in 2012 for 2011 performance, based on “robust Evaluation, Measurement, and Verification (EM&V)” that was being implemented in a separate rulemaking.

PSC Order No. 11 of Docket 10-100-R  adopted on September 29, 2011 included a set of EM&V Protocols and on October 14, 2011 by Order No. 12 a Technical Reference Manual for EM&V was adopted.

Opt Out Option

In 2013 Act 253 allowed for nonresidential customers with a total aggregate demand of at least 1 MW and multiple facilities that each have a demand greater than 200 kW to opt out of the state’s energy efficiency program.. 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 web site.

  General Information
Arkansas Public Service Commission
P.O. Box 400
Little Rock, AR 72203
Phone: (501) 682-2051
Phone 2: (800) 682-2698
Web Site:
  Wally Nixon
Arkansas Public Service Commission
1000 Center Street
Little Rock, AR 72201
Phone: (501) 682-5797
  Eddy Moore
Arkansas Public Service Commission
1000 Center Street
P.O. Box C-400
Little Rock, AR 72201
Phone: (501) 682-5800
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

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