Editorial: PSC should insist on repayment
Staff
Wednesday, May 7, 2008 3:37 PM CDT
The Mississippi Legislature this session, following intense lobbying by the state’s two largest utilities, agreed to a plan that could allow the utilities to pass on the costs of new power plants during their construction.
This would be a significant change for Mississippi, which until now had required, as a matter of public policy, that the utilities couldn’t up their rates to cover the costs of new generating capacity until these power plants were actually providing electricity.
Entergy and Mississippi Power Co., which teamed together on this legislative effort, argued that their “pay as you go” plan is in the best interests not only of the utilities, but also of the consumers. Without that financial help, the companies said they would be more reluctant to proceed with these multibillion-dollar investments that are going to be necessary to keep up with the increasing demand for power. Furthermore, earlier-than-normal help from ratepayers would reduce the costs of borrowing and, thus, the overall cost of the plants.
Although most of the arguments sounded reasonable, lawmakers failed to protect the interests of ratepayers on one major count. There is no provision in the law to get the ratepayers their money back if Entergy or Mississippi Power decides to pull the plug on a new plant before it is operational.
The Public Service Commission can correct this flaw, since at this point “pay as you go” is only a possibility. It doesn’t become reality for a specific project without the PSC’s approval.
The commissioners can still set some conditions. One certain one should be that the ratepayers are repaid their investment if a plant doesn’t wind up getting built.
- From the Greenwood Commonwealth
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