PSC may curb private jet costs
by Amy McCullough
Published: September 25,2011
The Mississippi Public Service Commission is considering amending a rule that would prohibit utilities from being allowed to charge customers for private jet expenses that are above costs of “coach” travel.
Commissioner Brandon Presley made a motion to open a docket to amend the rule in July after Mississippi Power Company asked the Commission’s permission to charge customers for $900,000 of corporate jet expenses.
The Commission recently held a public hearing on the docket, in which most stakeholders adopted their written comments. There were no comments from the public.
>> The Attorney General supports the amendment, saying in a letter to the Commission: “With the high number of commercial flights available, it would be hard to justify why a private aircraft would be necessary.”
>> Mississippi Power believes there is no need for an amended rule, saying in letter: “MPC includes only prudent and reasonable business-related aircraft expenditures in the company’s cost of service and rates.”
>> Entergy Mississippi said in a letter that the company’s shareholders pay for its employee corporate jet expenses. However, Entergy believes jet expenses should be allowed when incurred for economic development purposes.
>> CenterPoint Energy supports the concept of the rule amendment.
>> The Mississippi Public Utilities Staff, the advisory body to the Public Service Commission, does not object to an amended rule but believes a defined cost-benefit analysis process is needed.
The current Commission rule defines allowable utility operating expenses as those “necessary, prudent and reasonable expenses incurred or to be incurred in the rendition of a utility’s service.” Expressly disallowed are any expenses the Commission determines are not in the public interest, lobbying expenses, gifts and entertainment, and attorneys fees incurred in rate cases and other proceedings.
The proposed rule amendment would expressly forbid private jet expenses, “except that the reasonable cost of equivalent ‘coach class’ travel on a commercial air carrier may be considered an allowable operating expense when supported by appropriate documentation and justification.”
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