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Arkansas (US-AR)

Market Type: Deregulated (Retail Choice)
SSS Relevance: ⭐⭐⭐ High
Grid Carbon Intensity: ~410 gCO₂/kWh

SSS Factors: significant nuclear capacity, hydroelectric resources, no mandatory RPS, regulated market structure

1. Overview​

Arkansas operates a regulated, vertically integrated electricity market without retail choice, meaning consumers are served by designated utilities based on geographic location rather than a competitive market 1. Oversight is provided by the Arkansas Public Service Commission (APSC), while utilities participate in regional transmission organizations (RTOs) for wholesale market operations 1.

The state maintains a diverse generation mix that remains heavily reliant on fossil fuels. As of 2024–2025, natural gas leads generation (34–38%), followed by coal (28%) and nuclear power from the Arkansas Nuclear One facility (24–25%) 1. Low-carbon sources, comprising nuclear and renewables, account for approximately 38% of the total energy mix. Renewable energy represents roughly 8.4% to 8.9% of total generation, driven primarily by hydropower (5–9%) and a rapidly expanding solar sector (~7.5%) 2 1.

Arkansas benefits from some of the lowest electricity rates in the United States, ranking in the top 10 nationally for affordability. As of March 2026, the average residential rate was approximately 13.32 ¢/kWh, roughly 22–26% below the national average, resulting in typical monthly bills of $132 to $138 3. However, rates face slight upward pressure due to grid reliability investments and rising demand from new AI data centers 3.

The state's carbon intensity reflects its fossil fuel dependence, recorded at approximately 410 gCO2eq/kWh in early 2026 4. This is an improvement compared to historical EPA eGRID data from 2020 (431 gCO2eq/kWh) 5. While Arkansas lacks a mandatory renewable portfolio standard, major utilities like Entergy Arkansas are pursuing strategic updates, such as the "Next Generation Arkansas" plan, to invest in solar and modern natural gas infrastructure to replace aging coal plants and improve grid resilience 6 7.

2. Market Structure​

Arkansas operates a fully regulated electricity market, meaning residential and commercial customers lack retail choice and must purchase power from their designated local utility 8. The state originally enacted a deregulation law in the late 1990s but repealed it in 2003 via Bill 1114 following the California energy crisis 8.

The state's transmission grid is uniquely split between two Regional Transmission Organizations (RTOs):

  • Midcontinent Independent System Operator (MISO): Manages the grid for the eastern two-thirds of the state, serving major utilities such as Entergy Arkansas 9.
  • Southwest Power Pool (SPP): Manages the western third of the state. SPP is headquartered in Little Rock and serves utilities including Southwestern Electric Power Company (SWEPCO) 9. The Arkansas Electric Cooperative Corporation (AECC) participates in both RTOs due to its service territory spanning both regions 9.

The utility landscape is comprised of three primary sectors:

  • Investor-Owned Utilities (IOUs): Private, for-profit corporations serving urban and suburban areas, including Entergy Arkansas, AEP SWEPCO, Empire District Electric (Liberty), and Oklahoma Gas & Electric (OG&E) 10.
  • Electric Cooperatives: Not-for-profit entities established for rural areas. The Arkansas Electric Cooperative Corporation (AECC) provides wholesale power to 17 distribution cooperatives 10.
  • Municipally-Owned Utilities: Approximately 15 publicly owned utilities operated by local city governments 10.

The Arkansas Public Service Commission (APSC) regulates IOUs and most cooperatives, while municipal utilities fall outside APSC jurisdiction 10. Recent legislative activity includes the Generating Arkansas Jobs Act of 2025 (Senate Bill 679), which aims to stimulate energy development and alter rate structures within the existing regulated framework 8.

3. Clean Energy Policy​

Arkansas does not have a state-mandated net-zero electricity goal or a mandatory Renewable Portfolio Standard (RPS). Instead, the state relies on utility-driven targets and specific legislative measures focused on grid reliability and cost-effectiveness.

Utility Climate Goals Major investor-owned utilities have established voluntary decarbonization targets:

  • Entergy Arkansas: Committed to achieving net-zero carbon emissions by 2050 4.
  • Southwestern Electric Power Company (SWEPCO): Targeting net-zero carbon emissions by 2045. This includes plans to retire approximately 1,900 megawatts of coal capacity by 2032 4.
  • Arkansas Electric Cooperative Corp (AECC): While lacking a formal net-zero date, AECC plans to retire 68% of its coal capacity by 2030 4.

Legal Framework and Incentives

  • Energy Efficiency Resource Standard (EERS): Investor-owned utilities are required to reduce electricity and natural gas sales by 1.2% and 0.5%, respectively, relative to 2018 levels. These standards are currently extended through 2026 11.
  • Net Metering: Legislation passed in 2023 reduces credits for surplus power for systems installed after September 2024. Systems installed prior to this date are grandfathered under current rates until 2040 12.
  • Federal Incentives: Residents can access a 30% federal solar tax credit. Additionally, the Inflation Reduction Act (IRA) provides funding for rural electric cooperatives to upgrade to clean energy 13.

Recent Legislation

  • Generating Arkansas Jobs Act of 2025: Streamlines the approval of new power plants to six months and allows utilities to recover costs incrementally to mitigate rate spikes during coal plant retirements 11.
  • State Energy Policy (SB596): Established in 2025, this policy prioritizes "dispatchable" generation and creates a strong presumption against retiring existing facilities unless replaced by equally reliable resources 14.
  • Wind Energy Development Act: Imposes strict setback requirements, such as a one-mile distance from public places, which critics argue effectively stalls new wind development 11.

4. Utility Landscape​

The Arkansas electricity market is served by a mix of investor-owned utilities (IOUs), electric cooperatives, and municipal utilities. The sector is primarily regulated by the Arkansas Public Service Commission (APSC), with the exception of municipal utilities.

Investor-Owned Utilities (IOUs) There are four electric IOUs operating in the state 15:

  • Entergy Arkansas: The largest utility in the state by revenue and customer base, serving approximately 738,000 customers as of late 2025 16.
  • Southwestern Electric Power Company (SWEPCO): A subsidiary of American Electric Power (AEP), serving northwest and western Arkansas 17.
  • Oklahoma Gas & Electric (OG&E): Serves customers primarily in the western part of the state 16.
  • Empire District Electric Company: A Liberty Utilities company serving a smaller portion of the state 17.

Electric Cooperatives The state includes 17 electric distribution cooperatives that are privately owned, not-for-profit entities owned by their customers 9. Key facts include:

  • Membership: Collectively serve more than 1.2 million members 9.
  • Wholesale Power: The Arkansas Electric Cooperative Corporation (AECC) acts as the wholesale provider for all 17 member cooperatives 9.
  • Coverage: Co-ops cover approximately 62% of Arkansas' land area, primarily serving rural and suburban regions 9.

Municipal Utilities Municipal utilities are city-owned and operated departments governed by local city councils or independent commissions. Unlike cooperatives and IOUs, municipal utilities are not regulated by the APSC 18.

5. SSS-Eligible Resources​

No specific SSS-eligible resources identified. See section notes.

6. EAC/REC Registry Infrastructure​

Arkansas does not operate a state-mandated Renewable Energy Certificate (REC) tracking system due to the absence of a formal Renewable Portfolio Standard (RPS) 1920. Instead, the state relies on regional and national registries to verify environmental attributes.

The primary tracking system used in Arkansas is the North American Renewables Registry (NAR), which facilitates the generation, tracking, and retirement of RECs for jurisdictions lacking dedicated infrastructure 2021. Additionally, the Midwest Renewable Energy Tracking System (M-RETS) is utilized, particularly for renewable energy projects connected to the Midcontinent Independent System Operator (MISO) grid, which covers parts of Arkansas 1920.

While the Western Renewable Energy Generation Information System (WREGIS) generally covers the Western Interconnection and is not typically used for Arkansas projects, it may be employed if RECs are specifically exported to western markets requiring WREGIS certification 19. Similarly, PJM-GATS is sometimes used if a project has contractual obligations to deliver RECs into the PJM Interconnection region, despite Arkansas not being a part of that grid 19.

Oversight of energy efficiency and sustainable strategies is managed by the Arkansas Energy Office (AEO) (a division of the Arkansas Department of Energy and Environment), though the AEO does not operate an independent registry 10. For voluntary market participation, RECs are often verified by third-party programs such as Green-e® Energy 20.

7. Grid Emissions​

Grid Carbon Intensity: 410 gCO₂eq/kWh (annual average)

Generation Mix​

Scope 2 Reporting​

  • SB 253 requires Scope 2 reporting for companies >$1B revenue

Source: EPA eGRID, EIA, state regulatory filings

References​

Sources & Last Updated​

Research Date: 2026-03-09
Data Sources: EIA, EPA eGRID, state regulatory filings, SerpAPI research aggregation

This page was generated using automated research and may contain inaccuracies. Verify critical data with primary sources.

Footnotes​

  1. U.S. Energy Information Administration (EIA) (.gov) ↩ ↩2 ↩3 ↩4

  2. America’s Health Rankings ↩

  3. Electric Choice ↩ ↩2

  4. State Climate Policy Dashboard ↩ ↩2 ↩3 ↩4

  5. Climatiq ↩

  6. The Motley Fool ↩

  7. Energy Star (.gov) ↩

  8. Quick Electricity ↩ ↩2 ↩3

  9. Arkansas Electric Cooperative Corporation ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7

  10. Arkansas.gov ↩ ↩2 ↩3 ↩4 ↩5

  11. Arkansas Democrat-Gazette ↩ ↩2 ↩3

  12. Justia Law ↩

  13. National Archives (.gov) ↩

  14. Arkansas Advocate ↩

  15. Arkansas Division of Environmental Quality ↩

  16. Arkansas Business ↩ ↩2

  17. Southeast Energy Efficiency Alliance ↩ ↩2

  18. American Public Power Association ↩

  19. Carbon Solutions Group ↩ ↩2 ↩3 ↩4

  20. Ecohz ↩ ↩2 ↩3 ↩4

  21. U.S. Environmental Protection Agency (.gov) ↩