Vote no on SB 23

The Arkansas Forest and Paper Council is opposed to SB 23 and its companion bill HB 1055. The bill as amended is lacking in overall sensitivity to the needs of industrial customers for transparent and cost-based pricing needed to provide stability for Arkansas operations.

In the matter of economic stability, the ability of a local electric cooperative to move in and out of oversight by the Arkansas Public Service Commission creates a much more volatile economic set of circumstances that will inhibit the ability of rural communities to attract investment that provide much needed jobs and dollars for education.

This bill does not prohibit the cross subsidization of services by the local electric cooperatives using electric rate revenues to pay for additional services that cooperatives may or may not choose to provide to their members.

In the area of ratemaking the bill provides no transparency to the justification used by the local cooperative to determine the member rates established for rate class. The electric rural cooperatives along with their generation-transmission wholesale supplier already enjoy an abbreviated rate making process with reduced obligations to demonstrate cost of service. The new bill will further erode transparency, leaving minority large industrial members, at a long-term disadvantage, and without a recourse to demand cost-based, transparent, rates from their monopoly electric suppliers

This bill removes the local electric cooperative from oversight from the Arkansas Public Service Commission in all matters except those five areas listed in the bill. Additionally, this bill is established as the supreme ruling statute for all matters that may conflict with any current or future statue of the State of Arkansas.

The exemptions conveyed on the local rural cooperative will be a signal to the investment owned regulated electric monopolies to seek the same type of treatment using the economic disadvantage that is created as a sound reason to remain competitive with the local cooperatives.

In the matter of dispute resolution there is no appeals process identified for customers to follow. The five areas listed as still under the jurisdiction of the APSC would allow the APSC to be the adjudicating body. There is none for any other area of dispute.

Notwithstanding the complexity of the decision making required to address the current COVID 19 crisis in every jurisdiction, in our nation. It is imperative that we not lose sight of the essentials required for our country to navigate and rebound from the current grips of the virus. The forest products industry in Arkansas is an essential partner in the fight to mitigate and eradicate the effects of the COVID 19 virus by producing products essential to the safety of the public and the operations of the medical community, providing remedies to the virus. The production of bath tissue, paper towels, food packaging, medical packaging all essential to the sanitized health of our citizens requires that these products production not be interrupted as the ripple effects can be devastating and long lasting.

The member companies of the Arkansas Forest and Paper Council are key producers and shippers of vital products needed for our country to weather this storm and want to ask that if you are confronted with the need to declare a “shelter in place” policy or any quarantine policy for our state that our industry be defined to be “essential business” operations and exempt from the restrictions included in such a declaration.

The products produced by our industry are essential for housing, hygiene, and health. Wood and chemical by-products are utilized, to the extent that there is no waste in our supply chains, by 95% of all businesses in our country.

The Arkansas forest products industry considers the health and safety of our over 28,000 employees and their families of upmost importance. Arkansas Forest and Paper Council member companies have reported to us that they have implemented COVID-19 health, safety and operational plans to support their employees, visitors and customers during this unprecedented time. Our members are manufacturing products that we all rely upon and they are adequately managing product supplies to support customers throughout the nation.

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