Sherwood city officials now have a lot of homework to do as they have received proposals from three different electric utilities to be the city’s next provider of electricity.
Currently, the city of North Little Rock provides electric service to the bulk of Sherwood residents.
Sherwood City Attorney Steve Cobb said at the May meeting of the city council that he had received copies of proposals from the three competing utilities vying for the contract: North Little Rock Electric, Entergy and First Electric Coop.
He told aldermen he would make copies of the proposals and distribute them to all city officials. Cobb said the city also is relying on the services of legal counsel, which has expertise in the electric utility industry, as he and other officials try to come up with the best recommendation to follow.
Mayor Virginia Hillman said she believes a city council workshop will be called, so aldermen and other city officials can begin to go through the three proposals.
Hillman said city officials want to enlist the services of a professional to specialize in electric contracts because the subject matter is highly technical.
In a letter dated May 25 from Entergy Arkansas Inc. CEO Hugh McDonald stated that company’s case.
“As you know, a decision to change power suppliers for your community is a very serious matter and will have long term effects on the community,” he stated. “(Entergy) believes it can provide many short-term and long-term benefits to the city of Sherwood and its customers that are not available from any other electric provider in the state.”
Entergy also provided price comparisons of the rates charged by the three competing utilities of itself, First Electric and North Little Rock. The price comparison for rates charged in May 2012 showed Entergy Arkansas was the lowest among the three in residential average, small general service, and large general service average, according to its own calculations.
First Electric Cooperative Corp. President and CEO Don Crabbe provided Sherwood its proposal on May 24.
According to Crabbe, part of First Electric’s proposals are based on discussions it had recently with North Little Rock Electric, which owns a lot of electric utility infrastructure in Sherwood.
“First Electric has had brief and preliminary discussions with NLRED concerning the facilities, which NLRED owns in Sherwood and which First Electric will need in order to provide electric service within the area by the RFP (Requested Retained Facilities),” according to Crabbe. “NLRED has indicated that it desires to keep some of these facilities.”
According to First Electric’s letter, its willingness to be the exclusive provider of retail electric service under a franchise to begin July 1, 2015 within Sherwood, which is currently provided by North Little Rock Electric, would be done under certain conditions. The conditions are that either North Little Rock sells its assets in Sherwood to First Electric, or First Electric and North Little Rock reach an agreement for the use of North Little Rock’s infrastructure in Sherwood.
Jon Russ, North Little Rock Electric general manager, told the city of Sherwood in its proposal submitted May 25 that the utility wants to continue providing electricity to Sherwood.
“I appreciate the opportunity you have offered us to provide this information, as I hope that by reading it you will remain convinced that North Little Rock Electric Department is the best option you have for providing electric service to the section of Sherwood under review,” according to Russ.
He informed Sherwood officials it is moving its operations to 1400 W. Maryland Ave. in North Little Rock, which is very close to Sherwood, making it possible for the utility to more rapidly deploy crews to Sherwood should emergencies arise.
In its proposal, North Little Rock Electric projects its retail electric rates to be excellent in the future.
North Little Rock took action in 2009 to develop an Integrated Resource Plan (IRP) to help the utility provide competitive power and energy services for the next 20 years.
The plan called for:
• Diversifying power supply;
• Securing transmission access for delivery of the diversified power supplies;
• Building smart-grid communications infrastructure and deploying smart meters with all customers by the end of 2013;
• Developing and implementing demand management and conservation programs to utilize smart meters to provide customers with options for managing power costs;
• Obtaining professional skill sets to implement and maintain a smart grid.
“All portions of the 2009 version of the IRP have been implemented resulting in rate reductions in both 2009 and 2010 for all customer classes,” according to NLR’s proposal.
An IRP for 2013 and beyond will be presented for approval in late 2012, Russ said.