Tuesday, May 14, 2013

TOP STORY >> Voters decide in Sherwood to keep NLR

Leader staff writer

Sherwood residents, by more than a 2-1 margin, voted Tuesday to uphold an ordinance that renewed the city’s contract with North Little Rock Electric through 2035.

The uncertified results showed that 1,921 voted for the ordinance and 858 were against it.

The utility services 7,500 customers in Sherwood.

Early voting led the way with a lead of 3-1 for the ordinance. There were 773 early and absentee voters, with 593 voting for the ordinance and 180 voting against.

The renewal of the contract means the city will continue to receive $470,000 annually in shared revenues from the utility.

Spokeswoman Beverly Williams of Facts About Customers’ Electric Services (FACES) — a grassroots organization formed to campaign for the ordinance — was thrilled.

She added that a goal of North Little Rock Mayor Joe Smith is to form a commission to look at decisions affecting utility customers, and Sherwood may have representation on that commission.

Williams said, “We’re obviously excited to continue this contract with North Little Rock Electric since we’ve had it for over 65 years. I’d like to acknowledge all the Sherwood citizens who worked to help us pass this ordinance. One of the things that is important to acknowledge those citizens who had First Electric and Entergy because many of them voted to support us and let us keep the provider we wanted.”

She continued, “Our entire campaign was to support our city council. We feel they did their due diligence. The process was right and the process worked. We’re excited to be on the front lines.”

Mayor Virginia Hillman said after the election, “We are very pleased. Now we can concentrate on some other issues we need to be attending to.”

Citizens of Sherwood Together (COST), another grassroots group, petitioned for the special election and hoped that the ordinance would be repealed.

The group’s spokesman, Don Berry, said, “Forcing the election was a win for us. The win is the fact that we found an issue, we were concerned about an issue and we used the process. (The aldermen) know the citizens can always do this.” He was also pleased with the voter turnout.

The city council passed the ordinance in November by a vote of 5-3.

NLR Electric has provided electricity to the area for more than 60 years and to public buildings since Sherwood was incorporated in 1948.

The utility transfers its profits to the general funds of the cities it services because it is municipally owned. The $470,000 tariff is Sherwood’s share of that.

The city’s contract with NLR Electric states, “North Little Rock shall not collect the tariff component of the franchise fee from its customers in addition to rates and charges for service.”

That tariff is set at $0.003206 multiplied by the number of kilowatt hours of electricity NLR Electric sells in Sherwood.

The fee can be adjusted up to four times by the utility or the city on or after the fifth anniversary of the contract and every fifth anniversary after that, according to the contract.

The adjustment would be effective when written notice is provided to the entity that didn’t initiate the change, the contract states. If a dispute arises over the adjustment, a certified public accountant or other expert must be hired to calculate it.

The franchise fee has two parts, the contract states. The other part is the “traditional fee” of 4.25 percent of annual gross electric revenues collected from the utility’s customers in Sherwood.

Central Arkansas Water and CenterPoint Entergy also pay 4.25 percent for the right to do business in Sherwood.

If the city had chosen to switch, a new provider would have had to purchase North Little Rock Electric’s infrastructure in Sherwood. The highest estimate has been $28 million, which include an $8 million substation, Williams’ group claimed.

She said the Public Service Commission told her that debt could be spread among all of another provider’s customers, but not equitably, meaning Sherwood customers could end up paying more on their bills for the switch to another provider.

Berry said the former contract specified a process by which that price would be determined. The former contract states that Sherwood and another provider would have to pay what it would cost for NLR Electric to rebuild its system at a depreciated rate. His group was concerned that the council didn’t hire an expert or gather enough public input.

Another main point Berry has made is that Entergy’s and First Electric’s rates are 15 to 20 percent lower than those of NLR Electric.

Williams has said the difference is a “nominal” $6 to $8 because of extra fees Entergy adds to its bills. NLR Electric charges 9 cents per kilowatt hour, while Entergy charges 6 cents.

She and other members of FACES have argued that they don’t mind paying a little more because NLR Electric has fewer outages and restores power more quickly than Entergy and First Electric.