JACKSON — Regulators will review the books of Mississippi’s 25 electric power associations to try to determine whether they are holding money that should instead flow back to customers.
The Mississippi Public Service Commission voted 3-0 yesterday for its own legal staff and the freestanding Public Utilities Staff to conduct a joint review, with an eye toward issuing a report in October.
The move came after Northern District Commissioner Brandon Presley, a Democrat, questioned whether the electric cooperatives were doing enough to send money back, either through rate reductions or through rebates. By Presley’s count, only seven or eight cooperatives gave back funds.
“It’s clear from figures that have been filed with the commission that at least half of the cooperatives have not been issuing capital credits to their customers,” Presley said yesterday.
Mississippi state law requires the cooperative entities to give back unneeded cash, stating “revenues and receipts not needed for these purposes shall be returned to the members, by the reimbursement of membership fees, or by way of general rate reductions, as the board may decide.”
Michael Callahan, CEO of the Electric Power Associations of Mississippi, has pledged to work with the commission to examine the issue.
Jointly, the cooperatives serve 762,000 customers statewide. That’s more than Entergy Mississippi and Mississippi Power Co. combined.
The associations reported to the commission that they had accumulated funds of $161.8 million in the latest years for which they had filed financial reports. Seven said they gave back funds, totaling about $47 million.
None of the cooperatives that gave back money buy power from the federally-owned Tennessee Valley Authority. TVA cooperatives are only allowed to make rate reductions, and can’t give membership refunds.
“Because TVA contracts don’t allow local power companies to give back refunds, those distributors including 4-County, re-invest excess revenue, or member equity, back into our electric systems while doing our best to hold down rates,” Joe Cade, CEO of Columbus-based 4-County Electric Power Association, said in a statement. “We carefully invest our member’s equity on system improvement — upgrading and improving substations, lines, poles, transformers and other equipment, improving right-of-way work and other projects that improve system reliability and bring power to our members at the lowest possible cost.”
Presley, though, noted that TVA cooperatives could still grant rate reductions as required under state law, saying he’d like to know if any have done so.