Published: October 08, 2008 03:58 pm         

Presley opens second inquiry into power companies fuel adjustments

Northern District Public Service Commissioner Brandon Presley along with other members of the Mississippi Public Service Commission has opened a second inquiry into the fuel adjustment rates charged by Entergy Mississippi and Mississippi Power Company.

Presley cited that Entergy Mississippi currently charges 12.83 percent on all under collections while MPC charges 13.25 percent. He also cited that current prime lending rate is only five percent, which is much less than the charges allowed by the companies under the current procedure.

“This is just one more example where we find that the current system of collecting for fuel charges is badly broken and in serious need of reform,” Presley said. “During a time when ratepayers are being hit by high prices at every turn, how can we allow utility companies to charge ratepayers almost three times the amount they would be charged by the bank?”

Presley also added that while interest is paid back to the ratepayers for any overcharges, that payback sometimes several months, therefore still hurting the ratepayer most of all.

“This whole idea of having to calculate interest on undercharges and overcharges, once again, proves that the system of projecting fuel charge costs needs major overhauling,” he said. “We could save the utility company’s accounting departments a whole lot of work figuring all this interest, if we just stop projecting and speculating and just simply charge ratepayers that actual costs of fuel and not guess when it come to Mississippians power bills.”

Presley cited data from the New York Mercantile Exchange that consistently showed natural gas prices have been below the prices projected.

Natural gas is currently trading at less than $7 while the company projected costs to be $8.