Governor Huckabee signed Act 204 into law on Monday, February 24, 2003. The passage of Act 204 essentially restores the electric utility industry in Arkansas to a regulated industry repealing most of the language addressing open retail electric competition contained in Act 1556 of 1999 and some additional language pursuant to Act 324 of 2001. Act 204 was passed in the public interest to continue regulating electric utility rates for the foreseeable future. All rules adopted by the Arkansas Public Service Commission in the interest of open retail electric competition were deemed unnecessary or superceded by Act 204. It is important to note that every electric utility in Arkansas, the Arkansas Public Service Commission, and the Arkansas Attorney General sanctioned the passage of Bill 1114 which would later become Act 204 of 2003.

The reasons for passing the legislation contained in Act 204 were simple. Problems with open retail competition in California surfaced which included escalating electric retail rates, perceived shortages of generation, and rotating blackouts. Serious financial problems, including accounting irregularities also surfaced with former energy giant ENRON. The firm played a major role in marketing and selling electric energy to several utility markets, including California.

The benefits of open retail electric competition, once extolled to bring about lower priced electricity to millions of consumers, did not materialize. In fact, the opposite occurred in the case of California. Real and perceived shortages of electrical generation drove up the price of electricity. Consumers in the state of Montana also suffered when the generation assets of Montana Power Company were sold to utilities outside the state. The generation output was sold to the highest bidder, often outside the state. The result: higher retail prices for Montana Power consumers. Similar experiences occurred in other states that elected to opt for open retail competition for electric consumers. We are not aware of any case of residential electric consumers benefiting from lower prices in a deregulated electric utility market absent legislated price caps or other legislated consumer incentives.

An interim study performed by an independent consultant hired by the Arkansas Public Service Commission revealed that electric rates for virtually all classes of Arkansas customers would likely increase in a deregulated electric utility market for at least the next 8 to 10 years. Results of the study were conveyed by the Arkansas Public Service Commission in a December 20, 2001 Report to the General Assembly Pursuant to Act 324 on the Development of a Competitive Electric Market and Possible Impact on Consumers. The Public Service Commission recommended the General Assembly consider a suspension of the current statute until 2010 or 2012, or complete repeal of the statute.

The Board of Directors of Mississippi County Electric Cooperative took action in January, 2002 when they learned of the strong possibility that open retail competition could increase electric rates and reduce system reliability for Mississippi County Electric members.

The Mississippi County Electric Board supported the recommendations contained in the report by the Arkansas Public Service Commission. Further, the Mississippi County Electric Board placed special emphasis on recommendations contained within the report with supporting rationale for the repeal of Act 1556 of 1999 (as modified by Act 324 of 2001). After successful lobbying efforts locally and with the state legislature, Act 204 of 2003 passed. The vision and persistence of the Mississippi County Electric Board of Directors prevailed. Electric utility deregulation would not happen in Arkansas. Therefore, there would be virtually no risk of generation shortages, spikes in electricity prices, and rotating blackouts. In return, the members of Mississippi County Electric and customers of other Arkansas electric utilities would retain a reliable source of electricity at a reasonable, regulated price. Arkansas returned to the stable electric utility environment that existed before the passage of Act 1556 of 1999.