Ark. Code Ann. § 23-4-410 (2026)
Authority of commission to fix rates — Apportionment of increase
- If after the investigation and hearing thereon the Arkansas Public Service Commission finds the new rate to be unjust, unreasonable, discriminatory, or otherwise in violation of the law or rules of the commission, it shall determine and fix the just and reasonable rate to be charged or applied by the utility for the service in question, from and after the time the new rate took effect.
- Until rate schedules in compliance with the commission's order can be filed and approved, any rate increase allowed in the commission's order shall be apportioned among all classes of customers and shall become effective on all bills rendered thereafter through a temporary surcharge or other equitable means, as shall be prescribed in the order.
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The public utility or any party to a proceeding before the commission to consider an application for a general change in rates and charges may, according to the commission's rules and procedures, present evidence regarding a requested return on common equity in a filing, including without limitation:
- The basis for the requested return on common equity, including quantitative analysis based on widely accepted methodologies, current market data, qualitative discussion, and analysis of factors that influence the requested return on common equity;
- Evidence that the requested return on common equity is comparable to values that have recently been approved for public utilities that are delivering similar services with corresponding risks within this state and in other similar regulatory jurisdictions in the same general part of the country;
- Evidence of the financial, business, and other risks faced by the utility, including regulatory oversight, numbers and types of customers, rate mechanisms, cost allocation methods, rate levels, rate design, reliability, and quality of service, as compared to those faced by utilities delivering similar services within this state and in other similar regulatory jurisdictions in the same general part of the country; and
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Any other information, including without limitation:
- Macroeconomic data;
- Relevant commentary from ratings agencies and investment analysts;
- Independent analysis of utility industry trends;
- Customer impact; and
- Any other relevant information.
- If any evidence is presented as described in subsection (c) of this section, the commission shall discuss that evidence and demonstrate in its order that it considered the evidence in making its findings. The commission shall make its findings based on substantial evidence.
- The allowance for funds used during construction that will be accrued and capitalized and included as a component of the costs recoverable through rates approved by the commission shall be determined according to the requirements of the uniform system of accounts adopted by the commission in its rules. The rate of return on common equity to be used shall be the rate of return on common equity most recently approved by the commission for the utility.
- An electric cooperative corporation established under the Electric Cooperative Corporation Act, § 23-18-301 et seq., is not subject to subsections (c) and (d) of this section.
History. Acts 1935, No. 324, § 18; Pope's Dig., § 2081; Acts 1955, No. 31, § 1; 1975 (Extended Sess., 1976), No. 1181, § 1; 1980 (2nd Ex. Sess.), No. 4, § 1; 1981 (1st Ex. Sess.), No. 30, § 2; 1983, No. 911, § 1; A.S.A. 1947, § 73-217; reen. Acts 1987, No. 994, § 1; 2015, No. 725, § 1.
A.C.R.C. Notes. This section was reenacted by Acts 1987, No. 994, § 1. Acts 1987, No. 834, provided that 1987 legislation reenacting acts passed in the 1976 Extended Session should not repeal any other 1987 legislation and that such other legislation would be controlling in the event of conflict.
Amendments. The 2015 amendment added (c) through (f).
Case Notes
Purpose.
The General Assembly contemplated that the investigation and hearing by the Arkansas Public Service Commission pursuant to this section should be completed and an order for a refund made during the six-month suspension period. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).
Appeals.
Consumer which did not appeal decision of the Arkansas Public Service Commission granting a rate change within the required time could not collaterally attack the rate schedule as discriminatory in a circuit court action against the utility and the commission. Commercial Printing Co. v. Arkansas Power & Light Co., 250 Ark. 461, 466 S.W.2d 261 (1971).
Due Process.
There was nothing in the record to indicate a denial of due process in action of commission in establishing a rate yielding a certain return to utility company upon application of company for increase in rates. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956).
Effective Date.
Arkansas Public Service Commission's determination that a decrease in an electric utility's rates, as established in the Commission's ratemaking order, would be effective for all bills rendered after June 15, 2007, which was the date the Commission issued the ratemaking order, was affirmed. Although the utility argued that it could face certain logistical difficulties in immediate implementation of the decrease, these difficulties could be met by utilizing appropriate debits or credits to customer bills. Entergy Ark., Inc. v. Ark. Pub. Serv. Comm'n, 104 Ark. App. 147, 289 S.W.3d 513 (2008).
Establishment of Rates.
The commission is not bound by any formula or combination of formulas in fixing rates. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956).
Where utility company in its rate application chose the testing period for use in determining rates and the commission accepted the company's choice, the company could not question the use of such testing period. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956).
It was the duty of the commission when utility company sought an increase in rates to determine whether the company was entitled to any increase in order to earn a fair return on its invested capital. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956).
Upon application of utility company for increase in rates refusal of commission to allow the average amount of work under construction during testing period to be included in rate base was not improper. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956).
Upon application of utility company for change in rates, commission was not bound by previous order and could make changes in such order upon proper notice to the company so long as it did not invade the constitutional rights of the company. Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 226 Ark. 225, 289 S.W.2d 668 (1956).
The test year to be used in setting utility rates is a matter lying within the discretion of the Arkansas Public Service Commission, although the commission should consider complete and accurate information with respect to a later period of time, when available, as a check on the continuing validity of the test year experience in a period of rapid change. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980) (decision prior to enactment of this section).
A test year used by the commission did not abuse its discretion. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).
Judicial Review.
It is the result reached, not the method employed, that is controlling, and it is not the theory but the impact of the rate order that counts in determining whether utility rates are just, reasonable, lawful and nondiscriminatory under this section; if the total effect of the rate order cannot be said to be unjust, unreasonable, unlawful or discriminatory, judicial inquiry is concluded, and infirmities in the method employed rendered unimportant. Southwestern Bell Tel. Co. v. Ark. Pub. Serv. Comm'n, 267 Ark. 550, 593 S.W.2d 434 (1980).
Notice to Utility.
The court interpreted the language of § 23-4-108 to mean that once the commission fixes a definite rate, it cannot lower the rate without giving notice to the utility and cannot raise the rate without notifying in some way the ratepayers. City of El Dorado v. Arkansas Pub. Serv. Comm'n, 235 Ark. 812, 362 S.W.2d 680 (1962).
Cited: Aluminum Co. of America v. Arkansas Pub. Serv. Comm'n, 226 Ark. 343, 289 S.W.2d 889 (1956); Arkansas Power & Light Co. v. Arkansas Pub. Serv. Comm'n, 261 Ark. 184, 546 S.W.2d 720 (1977); Southwestern Bell Tel. Co. v. Arkansas Pub. Serv. Comm'n, 584 F. Supp. 1087 (E.D. Ark. 1984).