Conway Corp’s electric rate increase went into effect Oct. 1, and the company will now charge residential electric customers $16 monthly, a dollar raise. Over the next two years, the rates will increase by an additional dollar per year.

Conway Corp CEO Bret Carroll said the average residential customer using 1,000 kilowatt-hours of electricity per month will see about a three to four dollar increase on their bill.

He said factors such as supply chain issues, increased unit costs and cost of living for employees led to the rate increase.

“The last time we brought a rate increase to the city council was 2017. It was right before the pandemic,” he said. “As you might imagine, the costs have went up in just about everything we have to buy.”

Carroll said a pad mount transformer, which supplies electricity to residential subdivisions, used to cost $4,000. It now costs $28,000.

“We’re trying to retain our talent, and so the labor costs went up as well,” he said. “Last year, we had a 6% cost-of-living increase for our employees.”

Carroll said Conway Corp departments have “minimal cash reserves to account for or plan for a tornado or a catastrophic loss.”

“We would have depleted cash reserves pretty significantly had we not had a rate increase,” he said.

Carroll said there are programs such as Low Income Home Energy Assistance, Community Action Program for Central Arkansas and United Way for customers struggling to afford their electricity bills.

He said Conway Corp also provides extensions on bills to customers “two to three times a year.”

“Let’s say you’re having a tough month,” he said. “Things have happened … They’ll allow you to kind of work through that process until you can get some help.”

Carroll said students can reduce energy consumption by setting their thermostats to about 70 to 75 in the summer and 68 in the winter.

“If you can stand the rent, I would look for a place that’s well-insulated in a place that has an energy-efficient superheating and air system,” he said. “That way in the summer your electric bills are lower, and in the winter your electric bills are lower.”

Carroll said Conway Corp uses automated metering infrastructure, which remotely measures energy usage, to minimize future rate increases.

Conway Corp recently built a solar facility in Happy, Arkansas, which will have a ribbon-cutting Oct. 19.

“That solar project is really going to be some low-cost energy for us,” he said. “That’s really going to help keep our power supply costs low, which translates to lower electricity bills for our customers.”

UCA associate professor of economics Jeremy Horpedahl said Conway Corp’s electric rates are lower than regional and national utilities.

“We’re about half the national average and even lower than most of the rest of Arkansas,” Horpedahl said.

He said while Conway Corp now charges 7 cents per kilowatt-hour, the average in Arkansas is about 10 cents, and the national average is 15 cents.

Horpedahl said that most cities “either have a city-run electric company, or they’re part of a regional group that’s not under the control of the city.”

“Conway Corp is kind of unique in that it’s this independent agency that only services Conway electricity and other utilities,” he said.

He said Entergy serves nearby cities, which is a utility company that powers millions of customers in other southern states like Louisiana, Mississippi and Texas, according to Entergy.com. 

“If Conway Corp went away, if they went bankrupt, then we would just have to join that energy pool, and they have higher prices than Conway Corp does,” Horpedahl said.

He said that renters and homeowners should know if they have a gas or electric furnace.

“So if you have an electric furnace, you might be paying more this winter to heat your home,” he said. “Because that’s the Conway Corp rate that’s going up. The natural gas prices are not set by Conway Corp; they’re through Summit Utilities.”

Horpedahl said heat pumps are an alternative to furnaces.

“For low-income households, in some cases, the federal government will just pay for you just to get one for free,” he said.

Households can receive a 30% tax credit for the costs of buying and installing a heat pump, and starting in 2023, state programs offer low-income households rebates for heat pumps, cutting costs up to $8,000, according to whitehouse.gov/cleanenergy/.

Horpedahl said since UCA housing costs incorporate utilities, UCA could have a competition between the halls for whoever lowers its energy usage the most. 

“There’s no real incentive for anyone on campus to actually use less energy,” he said.

He said although prices are increasing, they are still “well below” what someone who lives in Little Rock or Vilonia pays.

“People don’t like to have to pay more — I don’t, no one does,” Horpedahl said. “But Conway Corp says that this is necessary for them to continue operating as an independent utility.”

Associate Vice President for Facilities Kevin Carter said UCA has several projects in progress to update heating, ventilation and conditioning controls.

“Our plan is to continue upgrading these controls over the next several years as well as replacing older HVAC units with more energy-efficient equipment,” he said.

Visit energystar.gov/products/air_source_heat_pumps for more information about heat pumps.

Visit conwaycorp.com/energysmart or call 501-329-1712 for more information on how to lower your electricity bill.