Power losses from Ike 2nd only to ice storms

By Bill W. Hornaday (Contact)

LITTLE ROCK — For Entergy Arkansas Inc. and Southwestern Electric Power Co., only the ice storms of December 2000 left more customers without electricity than the remnants of Hurricane Ike.

About 400,000 Arkansans lost electricity during the ice storms, compared with revised estimates of about 327,000 from Ike.

When numbers from Hurricane Gustav are added, service interruptions for the two utilities total about 440,000 customers - though most of SWEPCO’s numbers are out-of-state customers.

Entergy Arkansas is the state's largest electric provider with more than 684,000 customers. SWEPCO serves about 473,000 customers, including 113,000 in western Arkansas.

Repair costs that Entergy Arkansas and SWEPCO try to recover from ratepayers - an issue put before state regulators in June - could prove substantial as well. And that’s in a year that has already had four rounds of tornadoes.

Yet Entergy Arkansas’ top executive said Monday that Ike would not approach the $195 million in cleanup costs caused by ice storms on Dec. 13 and Dec. 25, 2000, that affected 230,000 customers.

“There was a lot more physical damage during the ice storms and far more vegetation involved,” Entergy Arkansas Chief Executive Officer Hugh McDonald said. “That makes them far more costly than this.”

An official with the Arkansas Electric Cooperatives Corp. elaborated on why Ike-related damage pales in comparison to that of an ice storm.

On a one-to-10 scale with the ice storms a 10, Ike rates a four, said Doug White, the corporation’s vice president of system services. The corporation serves about 460,000 customers through 17 member utilities.

“With an ice storm you had ice-laden limbs and trees taking down poles and snapping several segments of line at a time,” White said.

“With this, you have the wind blowing a branch or tree onto one part of a three-phase line. Plus there’s a lot of difference doing repairs when it’s sunny and 75 degrees and when it’s freezing.”

At the peak of Ike’s push through the state, Entergy lost up to 179,500 customers and SWEPCO lost 37,500. On Monday, White revised the corporation’s power failures from 60,000 customers statewide to about 110,000.

SWEPCO officials say Ike wasthe second-biggest storm in its 96-year history. Power failures in its Arkansas-Louisiana-Texas service territory peaked at 187,000 customers compared with 234,000 from the Dec. 13, 2000, ice storm.

But the Dec. 13 storm affected only 2,500 Arkansas customers, SWEPCO spokesman Peter Main said. The Dec. 25 ice storm affected 94,000 systemwide and 34,000 in Arkansas, Main said.

While it’s too early to determine precise damage costs from Ike or Gustav, recovering such expenses is a growing concern for utilities.

In June, Entergy, SWEPCO and other electric providers asked the Arkansas Public Service Commission to create “rainy day” funds at least twice the size storm-cost recoveries currently allowed.

Such funds would raise monthly bills for residential and business customers. But the increases would be temporary - over the 20 to 24 months needed to build the fund - and would recur only when large-scale damage depletes such reserves, Entergy officials have said.

The corporation’s members can qualify for federal relief if their service areas are declared disaster zones, White said.

State Attorney General Dustin McDaniel said his office - along with commission staff - will try to ensure that no utility tries to “overegg the pudding” by using the proposal to generate extra profit.

For more than a year, Entergy has been vocal about the need for adequate storm-cost relief.

In June 2007, the commission rejected Entergy’s request for $46.6 million in storm costs since 2002. In turn, it allowed only $14.5 million a year as part of a rate ruling now under review by the Arkansas Court of Appeals. Any additional recoveries must be sought separately before the commission.

That amount represented an average of annual storm costs that Entergy faced over the past five years. But Entergy officials say that approach is inadequate for events such as the ice storms of 2000 and 2001.

On Monday, McDonald emphasized that Entergy’s biggest priorities are the safety of its repair crews and speedy service restoration.

“In times like these, we’re doing everything we can to get the lights back on ... because it’s the right thing to do,” he said. “We’re working on good faith that, at the end of the day, the commission will be prudent in determining what it finds to be the right thing to do.”

Front Section, Pages 4 on 09/16/2008