Election to determine power company franchise fee
Published 7:00 am Saturday, July 25, 2020
The cities of Picayune and Poplarville will hold a special election on August 4 to determine how much Mississippi Power Company will pay as part of each municipality’s franchise agreement.
The result of the special election will determine if Mississippi Power will pay a two or three percent franchise tax to the municipalities in the coming years and from which customers those percentages will be paid.
Mississippi Power currently pays franchise fees of three percent of electricity sales to both municipalities. Within Picayune, that means three percent of residential, commercial and industrial connections, though state law only requires it to pay two percent of those revenues. If the voters decide that Mississippi Power only pays two percent to the city of Picayune, it will be from only the residential and commercial connections, according to previous coverage.
The franchise agreement lasts 25 years, and at the end of the 25-year contract, the residents of the cities have to vote on renewing the contract for another 25 years.
“Basically, an election is required every 25 years in order for the city to negotiate a new agreement and continue to receive the revenue,” said Poplarville City Clerk Jane O’Neal in a written statement to the Item. “It is a win-win for the city.”
The franchise fee revenue helps fund operations such as police, fire, streets, drainage and general government, according to a post from the official City of Picayune Facebook page.
The post also states that voting no in the election will cause the city of Picayune to lose $175,000 in annual revenue and that voting yes will not increase rates.
“They do it every 25 years,” Mayor Rossie Creel, Poplarville, said. “Voting yes is adopting Mississippi Power as the power provider for the city of Poplarville and entering into that agreement. Mississippi Power, they go a little above and beyond some power companies. The state law requires they only pay a two percent fee for their franchise fee to the city and Mississippi Power voluntarily adds another percent to give three percent to the municipalities they service.”
“I would say that it would be a good decision of the citizens of Poplarville to remain with Mississippi Power as their power provider,” Creel said.
Attempts to reach Picayune City Clerk Amber Hinton and Picayune Mayor Ed Pinero for comment were not successful by press time.