Entergy Mississippi petitioning PSC for rate increase
Published: March 2,2011
The Clarion-Ledger reports that the company has asked the state Public Service Commission to increase the level of monthly accruals to its storm damage rider from $750,000 to $1.75 million and boost its storm reserve cap from $15 million to $25 million.
If those increases are approved, the bill of an average residential customer — one that uses 1,000 kilowatt hours per month — would increase by $1.44 per month.
Entergy officials say the charges would stop once the cap amount is reached and wouldn’t be reinstated until the cap amount drops below its current maximum of $15 million.
The PSC said Tuesday that the proposal is under review.
Entergy’s storm damage rider and cap have remained unchanged since 2001.
Entergy spokeswoman Mara Hartmann said Tuesday that the utility has spent hundreds of millions in storm repairs in just the last six years from damage caused by hurricanes as well as tornadoes that devastated parts of central Mississippi. She said that boosted the company’s storm damage reserve deficit to more than $9 million.
“We had been operating in the red for the past two years,” she said. “It wasn’t always this way. We don’t want bills to spike up or down (after a storm).”
The proposed increase, she said, will help ensure rate changes driven by storm reparation costs aren’t too dramatic too quickly.
Public Service Commissioners Brandon Presley said electric utilities typically maintain a storm damage reserve fund since so much of their equipment is above ground and vulnerable to severe weather.
“The key is, what are the actual needs, because it’s important for a customer to be restored in a timely manner,” he said.
Entergy charges average residential customers 65 cents per month toward its storm reserve.
The PSC earlier this year approved Houston-based CenterPoint Energy, whose service territory includes parts of Mississippi, creating a property damage rider to cover costs of restoring natural gas service after severe weather.
Residential customers will be charged a flat rate of 25 cents per month and nonresidential customers 75 cents per month, CenterPoint spokeswoman Alicia Dixon said.
The charges disappear once the company’s $500,000 cap is reached.
Mississippi Power, whose primary service area is in southern and eastern Mississippi, hasn’t sought a similar increase recently.
Company spokesman Verdell Hawkins says the utility was able to boost its storm reserve by $60 million after Hurricane Katrina through state bonds designed specifically to aid in storm-related power restoration.
“Over the years, these funds have allowed us to minimize impacts to customer rates associated with infrastructure repair and power restoration following storm events,” he said.
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