A Sherwood citywide special election will be held on May 14 to determine the fate of an ordinance passed last November by the Sherwood City Council that chose North Little Rock Electric to provide electric service for 7,000 city households over the next 22 years.
On Monday night, the Sherwood City Council voted 5-2 to approve a resolution allowing a public referendum to go forward. If approved by voters, the council will start over in the process picking a utility to provide electric service to the 7,000 city households. If rejected, the households would continue being serviced by North Little Rock Electric.
Council members Ken Keplinger, Mary Jo Heye, Toni Butler, Mike Sanders, and Kevin Lilly supported the resolution, while Charles Harmon and Tim McMinn opposed it. Alderwoman Marina Brooks abstained from the vote.
“The city council has determined that the number of signatures provided on the petitions exceeded 15 percent of the votes cast for mayor in the last general election,” reads the resolution. “The City Council of the city of Sherwood hereby calls a special election May 14, 2013, and refers to the voters the question and adoption of Ordinance 1953.”
Sherwood Ordinance 1953 was passed by the council on Nov. 26 that approved a 22-year franchise agreement with North Little Rock Electric. The vote for North Little Rock Electric resulted in a petition drive where North Little Rock Electric opponents wanted to see result in a referendum election.
The standing-room only crowd that observed the special council meeting Monday was filled with mostly supporters of a public referendum. Many times when a positive word was spoken publicly rejecting North Little Rock Electric and Ordinance 1953, rounds of applause could be heard throughout the council chambers.
At the heart of the debate for supporters of North Little Rock Electric is the $470,000 the utility has paid to Sherwood’s general fund since 2009, a payment no other utility has offered. In addition, opponents of North Little Rock Electric expressed frustration that they are paying rates between 15-20 percent higher than those imposed by Energy of Arkansas. In addition, the third competitor of the contract, First Electric Cooperative of Jacksonville, is owned by its membership and if there is money left over at the end of the year, First Electric Coop disburses those funds to its members/customers.
Aldermen acknowledged that if voters overturned Ordinance 1953 that the issue would go back to the council and the entire process would start over.
“Whether you are for or against it (Ordinance 1953), it will go back to us,” Keplinger said.
Heye said she believes if the majority of people oppose the North Little Rock Electric ordinance it will result in a lot of political pressure on individual aldermen to choose a utility other than North Little Rock.
“Hopefully we would take that into consideration what the will of the people is because that is who we are representing,” Heye said. “People could say we do not want North Little Rock Electric. We need to take that into consideration.”
Harmon said he believes the petitions presented to the council do not meet criteria set forth for referendum elections. He said when petition signature gathers went door to door, they had a copy of Ordinance 1953 but its lettering was too small to ready.
McMinn echoed Harmon’s arguments.
Harmon said if voters overturn the North Little Rock Electric ordinance, he feels people want what they see as a less flawed selection process. He said as one city resident spoke, Kim Ferguson, that the process next time around would possess more financial analysis with the hiring of an utility/financial expert.
“It would come back to us and we would start the process over again, but the process would be done more slowly and do it differently,” Harmon said. “And maybe after the different analysis, we may get a different answer.”
Harmon added, “But it is possible an expert could come back with the same answer and we might be back to North Little Rock Electric again.”
Harmon said North Little Rock Electric opponents are interested in getting an expert in the field of energy.
Keplinger said he feels the city of Sherwood has spent a considerable amount of time looking at facts, figures.
“For 7-8 months we have worked on this issue,” Keplinger said. “I did put a lot of time and effort and I did pole my constituents to see how they would feel about it.”
Keplinger said politics is playing a role in the support or opposition of the ordinance.
“In politics, half of the people are for you and half are against you,” Keplinger said. “We do our best with what we got to work with. I looked at the companies. There is really no best. They are all equal. The bottom line is people want electricity when they turn the switch on.”
Heye said she wants experts brought in to analyze the issue who don’t have any financial interest.
McMinn said he has trouble supporting the referendum because it is giving residents outside of the North Little Rock Electric service area more say-so than the 7,000 households who will be affected by the ordinance’s passage or failure.
McMinn said the 10,000 households outside of the North Little Rock service region should not have more say-so in the matter than the 7,000 impacted houses.
“If the shoe were on the other foot, and North Little Rock was going to dictate to Energy or First Electric Coop who their energy provider was going to be, I believe those people would be up at this podium screaming about that.”
McMinn said there are other issues that should be included, such as Energy’s impending electric rate increase set to be argued before the Arkansas Public Utilities Commission in the spring. In addition, McMinn said Entergy is the only company that is asking the state to pass onto all its customers the cost of the 2012 Christmas snow/ice storm.
McMinn also brought up other factors, including Entergy and other electric providers becoming a part of the Midwest Independent Transmission System Operator (MISO) network, which could have an impact on future utility rates. Entergy also has two coal-fire plants that will need to be modernized in the coming years. “That project alone will be in the millions of dollars,” McMinn said.
McMinn said he knows what he gets with North Little Rock Electric.
“It may be 10-20 percent higher but no one knows what rates will be two years from now,” McMinn said. “Nobody has a crystal ball.”