Proposals could change process of Miss. utility rate increases

Published 5:02 pm Friday, February 22, 2008

The Mississippi Public Service Commission could approve utility rate increases while companies are building power-generating plants, under a bill that cleared the state Senate Thursday.

The bill passed 38-11 and was held for the possibility of more debate. It eventually must move to the House, where a similar proposal is pending.

Under current state law, a utility company that wants to recover some of its construction costs must wait until a plant is operating before asking the three-member PSC to approve a rate increase.

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The bill that passed the Senate would let the PSC approve a rate increase sooner.

Opponents said utility customers could end up paying higher rates for projects that are never completed.

“I cannot, in good conscience, vote for this bill because it takes away protection for the rate payers on something that may not even be built,” said Sen. John Horhn, D-Jackson. “We’re going to have some mad rate payers out there who happen to be voters.”

Senate Public Utilities Committee Chairman Nolan Mettetal, R-Sardis, is the chief sponsor of the bill. He said companies need greater flexibility in paying for large projects.

Mettetal also said increases would not be automatic because utility companies would have to persuade the PSC to give approval.

The bill is being discussed as two utility companies are considering building power-generating plants in Mississippi.

Entergy Nuclear officials plan to apply for permits to build a new nuclear reactor at its Grand Gulf plant in southwest Mississippi. Approval by the U.S. Nuclear Regulatory Commission of the Combined License Application would be one of the final steps before construction could begin. However, Entergy has not decided if the company plans to build the reactor yet and the final application process will take years.

Mississippi Power announced in December 2006 that it was considering building a $1.8 billion plant in central Mississippi’s Kemper County. The plant would convert locally mined lignite, or “brown coal,” into a gas to generate lower-emission electricity.

The bills are Senate Bill 2793 and House Bill 1274.