Mississippi Power Asks for Electric Rate Hike
by Keith Burton - GCN 11/16/07
Local news media, specifically the Sun Herald newspaper and WLOX television have failed to tell the public that a proposed electric rate increase by Mississippi Power, filed November 15, before the Mississippi Public Service Commission (PSC), could be opposed by Mississippi Power customers. The Coast's major media reported the increases as almost a matter of certainty.
Mississippi Power has asked the commission for an average 4.2 percent increase to customers' bills next year because of rising coal prices and coal transportation rates. Residential customers would pay an average of 3.2 percent increase.
According to Bob Waites, the executive director of the PSC, interviewed Thursday by GCN, the public has 20 days starting from the date of Mississippi Power's filing, to register protest over the rate increase that could result in a public hearing.
"There is still time to file," Waites said. "They could write a letter informally to request a hearing, or file a formal request through our website."
Neither the Sun Herald, or WLOX made any mention of the public's ability to object to the increase. Both of those companies receive substantial advertising dollars from Mississippi Power.
Waites told GCN that such fuel adjustment increases are often just routinely "passed through" the agency for approval.
"I wouldn't call it an automatic thing that happens, but if someone makes a request, we could hold a hearing on this, but no one has requested a hearing," Waites told GCN.
Mississippi Power's rate increase comes at a tough time for many Coast residents still struggling with finances and paying bills. Local volunteer agencies have been seeing a growing number of Katrina survivors that are having trouble paying utility bills and are reeling from increase gasoline costs for their vehicles. Many of the people being moved out of FEMA trailers into homes and apartments are finding they face higher utility bills that they can barely afford as the larger permanent homes and apartments use more power.
Mississippi Power's rate increase follows a rate reduction for Entergy, which provides electricity for most of Mississippi north of the southern-most counties. Entergy announced in October they would be lowering rates.
Waites says the two companies estimate their fuel needs differently. Entergy, he said, estimates their costs quarterly, while Mississippi Power makes its estimate yearly. "I'm not sure which works best," Waites said.
Both methods require approval for use by the PSC.
Mississippi Power's stockholders came out of Hurricane Katrina in good shape. The company received nearly $276 million in federal relief funds to offset costs of repairing its lines and generating plants from damages from Katrina. The federal funds stopped Mississippi Power from passing the repair costs off to the public, but the company has done little to harden its system for future storms. Utility poles and lines damaged from the hurricane were replaced with the same type and the company has made no announcement of strengthening their service for such future storms, something the rest of the public is being forced to do.
According to the Sun Herald's report on the rate increase, Mississippi Power got a fuel rate adjustment of 3.2 percent last year. The company reports it anticipates a 6 to 8 percent increase in coal and rail transportation costs.
While such increases may occur and since the company can pass the increases off to the public, it has little incentive to find ways to lower its costs and become more efficient. The company uses barges to transport coal to its plants in Gulfport and in Jackson county. The barges in Biloxi, which are moored just east of the I-110 bridge, tie-up the busy Popps Ferry bridge traffic as many as ten times a day, according to Biloxi city officials.
A rail spur to the Gulfport plant, which could be used to supply coal to the plant, has not been used by the company for years.
Mississippi Power, a Southern Company subsidiary, serves 183,000 customers in 23 southeast counties.