# D002 Thesis — Ironwood Is Eligible Without a Separate Designation Finding ## Claim Ironwood — Lake Catherine Unit 5, a net-446 MW natural-gas combustion turbine, CECPN application filed in [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|Docket 24-072-U]] on 2024-11-01 — is statutorily eligible for [[Generating Arkansas Jobs Act (GAJA) rider|GAJA Rider]] recovery in the 2026 Annual Update without a separate, free-standing Commission order intoning the words "Strategic Investment." The statute does the designation, the utility's election triggers recovery, and the Commission has already acted on the premise that Ironwood belongs in the rider. Demanding a discrete "Strategic Investment finding" as an additional procedural prerequisite reads a step into Act 373 that the General Assembly did not write, contradicts the statute's transition provision, and is incompatible with how the Commission has consistently treated analogous statutory categories — most directly the "major utility facility" category under the UFEEPA, where a utility's own determination that a facility meets the statutory definition is the operative act that opens the proceeding, not the proceeding's terminus. ## Argument **The statute itself does the designation work; Herring's reading inserts a step that is not there.** Act 373's definitional section is not a discretionary standard the Commission applies to particular plants on a case-by-case basis. Ark. Code Ann. § 23-4-1303(10)(B)(i) — quoted in full in [[Palmer Rebuttal on Ironwood]] at p. 5 — provides that "'Strategic investments' includes without limitation investments and associated operating expenses associated with: (i) A new electric generating facility ... designed for or capable of operation at a capacity of one hundred megawatts (100 MW) or more for a single facility." The word "includes" is operative; the phrase "without limitation" is dispositive. This is a per se inclusion clause: any new electric generating facility of 100 MW or more is, by the General Assembly's own categorical determination, a Strategic Investment. Ironwood is a 446 MW combustion turbine — more than four times the threshold — and that capacity is documented on the face of the [[Ironwood REDACTED Application]] retrieved from [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|Docket 24-072-U]]. Palmer states without equivocation, and Herring concedes: "**It is not in dispute that Ironwood meets the definition of a Strategic Investment. Mr. Herring agrees that all three of EAL's resources, including Ironwood, meet one of these approval criteria**" ([[Palmer Rebuttal on Ironwood]], p. 5). When the statute self-applies — when the General Assembly has said in advance that the entire class is in — a free-standing Commission designation order is duplicative; the only thing it could find is what the statute already declares. **Section 23-4-1304(w) — the pre-Act 373 transition provision — is the statutory accommodation that resolves any timing problem with Ironwood specifically.** Ironwood's CECPN application was filed on 2024-11-01, "well in advance of Act 373's consideration or passage by the General Assembly" ([[Palmer Rebuttal on Ironwood]], p. 5). Act 373 was engrossed 2025-03-11 and signed 2025-03-20. There was, at the time the [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|24-072-U]] proceeding was joined, no Strategic Investment framework to invoke; the legal category did not yet exist. The General Assembly knew this, and built into Act 373 a transition mechanism — § 23-4-1304(w) — that explicitly preserves rider eligibility for resources filed under the prior statutory regime. Palmer's testimony is unambiguous: "**a resource filed prior to Act 373 is eligible for recovery in the GAJA Rider pursuant to Ark. Code Ann. § 23-4-1304(w)**" ([[Palmer Rebuttal on Ironwood]], p. 5). Herring concedes the filing date. The transition provision exists precisely to prevent the absurdity Herring's reading would create: where a Commission order issued before the statute's enactment could not possibly have invoked statutory language that did not yet exist, and where the post-enactment proceeding (24-072-U Order No. 9, which granted the CECPN) had no occasion to make a Strategic Investment finding because the Application did not seek one. To withhold rider eligibility from every pre-Act resource until the Commission convenes a separate post-hoc designation proceeding is to give § 23-4-1304(w) no operative effect — a result that violates the most basic canon of statutory construction. **Section 23-4-1304(f)(1) makes utility election, not a Commission finding, the trigger.** The text could not be plainer: "At the election of the investor-owned electric utility or the investor-owned natural gas utility, **strategic investments shall be recovered through the rider**" ([[Palmer Rebuttal on Ironwood]], p. 7, Palmer's emphasis). "Shall." Not "may" upon a separate finding; not "if subsequently designated"; not "after Commission adjudication." The General Assembly has made the operative regulatory act a utility-side election — exactly as it does in countless other ratemaking contexts where the utility selects among permissible recovery mechanisms (formula rate plan participation, riders versus general rate filings, depreciation treatments). EAL elected. The election was filed in [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|24-072-U]] on 2025-09-23 as a Notice of Intent to Include Ironwood in the GAJA Rider — "**which is all that is statutorily required**" ([[Palmer Rebuttal on Ironwood]], p. 5). The Commission was on notice, the docket record was open, and no statutory provision conditions the operation of (f)(1) on a separate designation finding. If the General Assembly had wanted a Commission designation as the trigger, it would have said so — as it did in the parallel UFEEPA framework when it conditioned a CECPN on a Commission finding of public need. It did not say so here. **The "major utility facility" analogy under UFEEPA is on all fours and forecloses Herring's reading.** This is Palmer's structural argument and it is decisive: "This is no different than the Commission's observation of the fact that certain facilities are 'major utility facilities' under the Utility Facility Environmental and Economic Protection Act. A utility files for a CECPN because a facility meets the definition of a major utility; **a Commission order is not required first stating that the facility meets the definition before the utility files the CECPN application**" ([[Palmer Rebuttal on Ironwood]], p. 6). The UFEEPA's statutory category — "major utility facility" — is, like Strategic Investment, defined by reference to objective characteristics of the plant (capacity, type, function). The Commission has never required a separate pre-CECPN proceeding to certify that a plant meets the definition before the CECPN can be filed; the utility's own determination of statutory eligibility opens the proceeding, and the Commission's substantive findings come at the end, not the beginning. To require a separate Strategic Investment designation proceeding as a precondition to GAJA Rider inclusion would impose a procedural hurdle the Commission has never required for the closely analogous UFEEPA category, on no textual basis. Herring's reading is not a careful application of the statute; it is the invention of a procedural step from whole cloth. **The Commission has, in fact, already recognized EAL's Ironwood designation.** Even if every preceding argument failed — and they do not — the relief Staff seeks is foreclosed by what the Commission has already done. Palmer's testimony, citing 25-049-TF Order No. 4 Question 10 and the Supplemental Direct Testimony of [[Matthew S. Klucher]]: "**The Commission recognized EAL's designation in Docket No. 25-049-TF when it directed EAL on September 24, 2025, to provide bill impacts of the inclusion of Ironwood in the GAJA Rider**" ([[Palmer Rebuttal on Ironwood]], p. 7). A regulator does not direct a utility to calculate the bill impact of including a resource in a rider unless that regulator has already accepted, at minimum implicitly, that the resource is eligible to be included. Order No. 4 in 25-049-TF was issued exactly one day after EAL filed its 2025-09-23 Notice of Intent to Include — the timing is not coincidental. The Commission's directive treated Ironwood's place in the rider as an established premise of the bill-impact inquiry, not as an open question awaiting some future designation order. **Herring's reading produces a structural anomaly the statute cannot bear.** If a separate Commission "Strategic Investment finding" is a prerequisite for rider inclusion, then every pre-Act-373 resource — and on the logic of Herring's reading, arguably every post-Act-373 resource as well, since (f)(1) is not limited to a particular vintage — would require a free-standing designation proceeding parallel to the CECPN. The Commission would convene one docket to certify that a 446 MW combustion turbine is a Strategic Investment under § 23-4-1303(10)(B)(i) (which the statute already says it is), then a second docket to certify the CECPN, then a third (the TF docket) to set the rate. The CECPN record in [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|24-072-U]] already establishes the substantive criteria Herring would require relitigated — Palmer cites Order No. 9 at pp. 20, 25-26, 44, 53; the Cunningham Direct and Rebuttal, the Fielder Direct and Rebuttal, EAL Rebuttal Exhibit KF-2, and the Cullipher Direct Testimony all in the public 24-072-U record. The Commission, on a fully developed evidentiary record, granted the CECPN. To demand a redundant "designation" proceeding to revisit substantive findings the Commission has already made on the same plant is not statutory fidelity; it is procedural make-work. ## Evidence 1. **§ 23-4-1303(10)(B)(i) per se inclusion (100 MW threshold).** "'Strategic investments' includes without limitation investments and associated operating expenses associated with: (i) A new electric generating facility, an associated transportation and storage facility for fuel, and other facilities designed for or capable of operation at a capacity of one hundred megawatts (100 MW) or more for a single facility." Source: [[Palmer Rebuttal on Ironwood]], p. 5, quoting Ark. Code Ann. § 23-4-1303(10)(B)(i); reproduced in [[Strategic Investment]]. 2. **Conceded definitional satisfaction.** "It is not in dispute that Ironwood meets the definition of a Strategic Investment. Mr. Herring agrees that all three of EAL's resources, including Ironwood, meet one of these approval criteria." Source: [[Palmer Rebuttal on Ironwood]], p. 5. 3. **Ironwood capacity = 446 MW (more than four times the threshold).** "Capacity: net 446 MW — natural-gas combustion turbine, simple-cycle, EAL self-build." Source: [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|Docket 24-072-U Production Overview]], drawing on the [[Ironwood REDACTED Application]] (Doc. 21, filed 2024-11-01). 4. **§ 23-4-1304(w) pre-Act-373 transition.** "A resource filed prior to Act 373 is eligible for recovery in the GAJA Rider pursuant to Ark. Code Ann. § 23-4-1304(w)." Source: [[Palmer Rebuttal on Ironwood]], p. 5. 5. **Ironwood's CECPN was filed before Act 373 existed.** CECPN application filed 2024-11-01 in [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|Docket 24-072-U]]; Act 373 engrossed 2025-03-11 and signed 2025-03-20. Source: [[Palmer Rebuttal on Ironwood]], p. 5 ("well in advance of Act 373's consideration or passage by the General Assembly"); [[psc/docket-24-072-u-ironwood-2026-05-22/_overview|Docket 24-072-U Production Overview]] (filing date); [[Generating Arkansas Jobs Act (GAJA) rider]] timeline (Act 373 signing date). 6. **§ 23-4-1304(f)(1) — utility election triggers recovery.** "At the election of the investor-owned electric utility or the investor-owned natural gas utility, **strategic investments shall be recovered through the rider**" (Palmer's emphasis). Source: [[Palmer Rebuttal on Ironwood]], p. 7, quoting Ark. Code Ann. § 23-4-1304(f)(1). 7. **EAL's election was filed.** "EAL designated Ironwood to be included in the GAJA Rider and provided notice to the Commission, which is all that is statutorily required" — citing "Docket No. 24-072-U, Notice of Intent to Include in GAJA Rider filed September 23, 2025." Source: [[Palmer Rebuttal on Ironwood]], p. 5. 8. **Prior Commission recognition in 25-049-TF.** "The Commission recognized EAL's designation in Docket No. 25-049-TF when it directed EAL on September 24, 2025, to provide bill impacts of the inclusion of Ironwood in the GAJA Rider." Source: [[Palmer Rebuttal on Ironwood]], p. 7, citing 25-049-TF Order No. 4, Question 10, and the Supplemental Direct Testimony of [[Matthew S. Klucher]]. 9. **The UFEEPA "major utility facility" analogy.** "This is no different than the Commission's observation of the fact that certain facilities are 'major utility facilities' under the Utility Facility Environmental and Economic Protection Act. A utility files for a CECPN because a facility meets the definition of a major utility; a Commission order is not required first stating that the facility meets the definition before the utility files the CECPN application." Source: [[Palmer Rebuttal on Ironwood]], p. 6. 10. **CECPN record establishes substantive Strategic Investment criteria.** Palmer cites "Cunningham Direct Testimony at 4, 22-25; Cunningham Rebuttal Testimony at 9, 12-14; Fielder Direct Testimony at 7-8; Fielder Rebuttal Testimony at 11-15; and EAL Rebuttal Exhibit KF-2" together with Order No. 9 findings at pp. 20, 25-26, 44, 53. Source: [[Palmer Rebuttal on Ironwood]], p. 6. 11. **GAJA Rider purpose statement (EAL's own framing).** "The purpose of the GAJA Rider is to recover from retail customers EAL's costs associated with strategic investments as defined under Arkansas law and as designated by the Commission ('Strategic Investment')." Source: [[GAJA Rider 2026 Annual Update]], p. 6. (Statement A reads "as defined under Arkansas law" — the definitional clause — as the operative prong; the "as designated by the Commission" parenthetical refers to the rider-inclusion designation EAL effected by election, recognized by the Commission's bill-impact directive in 25-049-TF.) 12. **Ironwood is in the 2026 Annual Update.** "This Annual Update includes generation and transmission strategic investments associated with the Ironwood combustion turbine, Jefferson Power Station, Arkansas Cypress Solar and battery." Source: [[GAJA Rider 2026 Annual Update]], p. 7. EAL has placed Ironwood in the rider on the strength of its statutory election; the burden is on Staff to identify a statutory provision that withdraws that eligibility, which Staff has not done. ## Anticipated counterarguments The strongest objections Statement A must absorb are these. **First**, the comparison case: the Commission did issue explicit Strategic Investment findings for [[Jefferson Power Station]] (CECPN 25-047-U) and [[Arkansas Cypress]] (CECPN 25-054-U), both filed after Act 373's enactment. A challenger will say the Commission's willingness to make those findings in the post-Act dockets shows that a finding is what the statute contemplates, and that the absence of a comparable finding for Ironwood is therefore meaningful, not procedurally inert. **Second**, EAL's own admission: the [[GAJA Rider 2026 Annual Update]] at p. 6 contains the words "strategic investments as defined under Arkansas law **and as designated by the Commission**." A challenger will say the conjunctive "and" makes Commission designation a co-equal requirement, not a redundant gloss, and that EAL has admitted as much against interest. **Third**, the structural distinction between (f)(1) and (w): a challenger will argue that § 23-4-1304(f)(1)'s "election" language describes how a designated Strategic Investment is recovered once already designated, not how the designation arises in the first place; and that § 23-4-1304(w)'s "eligibility" language for pre-Act resources is a permission to seek recovery, not an automatic conferral of recovery. On that reading, the statute provides Ironwood a path to designation but not an exemption from designation, and EAL was free to seek designation in this very 26-008-TF docket and chose not to. These objections will be engaged in the antithesis and weighed in the synthesis. They are flagged here for completeness and are not refuted in this thesis phase, in conformity with the dialectic's call-isolation discipline.