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PSC finds utilities' policies okay

JACKSON (AP) — Separate, independent audits presented to the Public Service Commission found no problems with how Entergy Mississippi and Mississippi Power Co. purchase fuel and will not recommend any changes to their policies.

Fuel adjustments became a heated discussion in recent years as the economy strained customers’ budgets.

Companies are allowed to pass the cost of buying fuel to customers in a fuel-rate adjustment, but the volatile pricing resulted in hefty monthly bills for customers at times.

Audits of the state’s utilities are done annually and forwarded to the Legislature for final approval.

This year, the commission chose to have the audits done independently, instead of by the Public Utilities Staff, another state agency.

“Whether it’s being done right or whether it’s being done wrong, we want to get to the bottom of it,” Commissioner Lynn Posey said of the fuel adjustment practices.

Each audit covered fuel-adjustment practices from October 2007 to September 2009.

“Whether it’s being done right or whether it’s being done wrong, we want to get to the bottom of it,” Commissioner Lynn Posey said of the fuel adjustment practices.

Each audit covered fuel-adjustment practices from October 2007 to September 2009.

However, the Entergy audit, conducted by Horne LLP, did question how $11 million in fuel-adjustment funds were used.

Entergy spokeswoman Mara Hartmann said the $11 million was used on costs for turning various energy sources into electricity, such as trucking coal from one site to another and controlling emissions.

Hartmann said it’s the company’s policy, but Entergy would make a change if it was ordered by the PSC. She said the company’s policies are in line with industry standards.

Ann Cleland of Horne LLP said she wasn’t suggesting the utility was wrong, but wondered whether those costs should have been charged to another part of Entergy’s operations. She said auditors were not able to review all the records.

“Entergy personnel indicated that it would take six to 20 months to produce the documents,” Cleland said. As such, Horne had to move on without that information to meet the PSC’s deadlines.

“You have hours and hours of phone conversations to find a particular conversation that Horne is looking for,” said Jeremy Vanderloo of Entergy in explaining the timetable given to auditors.

Posey said a clearer picture could be had of how utilities assess fuel-adjustment costs if audits were more uniform.

Auditors use various techniques to get information and may not always seek the same types of data, commissioners said.

The Mississippi Power audit, performed by Nicholson auditing firm, made recommendations only to clarify language in state statutes regarding utility audits and encourage independent, qualified firms to do such reviews.

“There were no recommendations made regarding our fuel-purchase practices,” company spokeswoman Cindy Duvall said. “We take a lot of pride in how we do our day-to-day business.”

The PSC has delved into utilities’ fuel-adjustment practices after Entergy Mississippi power bills soared greatly in the summer of 2008.

The company’s average residential bills have come down several times in three-month cycles since.

The PSC is expected to vote on accepting final versions of the audits sometime next week and forward them to lawmakers by Jan. 15.

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