Jackson Free Press

Mississippi Public Service Commissioner Brandon Presley is frustrated at conflicting reports from a sister agency about an audit of Entergy's rate increases in the state. The Public Service Commission refused Wednesday to sign off on an audit report prepared by the Public Utilities Staff--a group under the auspices of the governor--to present to the state Legislature. PSC claimed that the report did not answer all the questions that Mississippi ratepayers need answered.

"We might be perceived as a brick wall, but if the machine stops, the machine needs to stop because we owe our ratepayers more answers than we're getting," Mississippi Public Service Commissioner Brandon Presley said.

Commissioners Lynn Posey, Leonard Bentz and Presley claimed that the audit, submitted by the agency that handles accounting for the PSC, does not thoroughly depict whether or not Entergy bought the cheapest power available, which could have abnormally inflated ratepayers' electric bills.

"The key to all this is whether or not that $471 million fuel adjustment charge in the last year is the best price we got, but we can't conclude that because the procedure that's gone on here for years has not looked into that," Presley said, adding that he regretted the separation between the PSC and PUS.

"The commission is severely handicapped by the setup in which all the accountants are invested in the public utilities department, and we don't have any staff. We have eight staff members. They have about 30. There's no other state in America set up like we're set up, where the staff has all the resources and no accountability, and the commissioners have all the accountability and none of the resources," he said.

The Legislature established the Public Utilities Staff in 1990 after Public Service Commissioners David Snyder and Lynn Havens were convicted of extortion, bribery and conspiracy.

Snyder, in particular, orchestrated PSC approval of a power company's rate increases in return for that company's favorable treatment of businesses owned by Snyder and his friends. A jury also convicted Snyder in 1989 of taking monetary bribes, as well as not reporting the bribe money to the IRS as income.

The subsequent halving of the commission and its staff following the conviction put auditors and accountants, who had traditionally been under the PSC, under the auspices of people appointed by the governor. Only the states of Vermont and North Carolina join Mississippi in dividing the policing duties between a decisional administration and an investigative administration.

Public Utilities Staff Executive Director Bobby Waites said his staff thoroughly checked Entergy's numbers to make sure the fuel adjustment charges were accurate.

"My staff identifies all of the fuel costs and ties them back to the invoices and all of the purchased power costs and ties those back to the contracts, and we look at the internal controls of the company for purchase power procurement and make an assessment of the procurement practices. This is the historical audit of the fuel adjustment," Waites said, adding that reporters would have to "ask Presley" where he got his belief that his staff does not account for fuel adjustment charges.

Waites told the commission yesterday, however, that while the audit his staff submitted fulfilled the state's legal requirements, it did not determine if Entergy Mississippi's procurement were at the "rock-bottom lowest price."

"There's no way we can look at each one of those thousands of transactions to determine if each purchase made should have been made instead of the one that wasn't. In view of the allegations, we need to take that extra step, but it's going to take a lot of extra manpower to do that," he said.

Presley expressed frustration at two seemingly contradictory assessments from the same person.

"Now you can see the frustration that we're getting here," Presley told the Jackson Free Press. He recommended legislation—currently headed for the House Public Utilities Committee this year—that would authorize a more thorough audit that would actually compare Entergy's power purchases.

The audit, said Posey, would be financed by the power companies, if the legislation survives the House and Senate without extensive amendment changes. "This bill would give us the tools, under the law, to have these audits performed," Posey said. "That's the way they do it in some other states."

Entergy spokeswoman Mara Hartmann said that additional expenses Entergy incurs could ultimately be passed down to ratepayers, but made no predictions about the new audit's financial impact. "Whenever we add on services or do additional things, it's always a concern that it may impact ratepayers. I'm not sure if it would in this instance, but it would certainly be a consideration," Hartmann said, adding that the company would comply with PSC's wishes.

Presley pointed out that Mississippi already has the highest utility rates of any state in the south except for Florida.

"There's obviously room for adjustments for the rates to come down in the state with the poorest population in the country," Presley said. "Entergy has got some pretty good rates right now. Ratepayers are paying a pretty good bit."

The PSC's suspicion of Entergy practices began last July, when the company requested PSC's permission to raise customers' rates by almost 30 percent, citing the increased cost of natural gas.

The commission began an investigation on the power company's procurement practices, backed up by a second investigation by Attorney General Jim Hood. Hood cited the company's behavior in neighboring Louisiana, where state officials demanded the company pay back more than $70 million to customers after it bought more expensive power from affiliate companies in lieu of cheaper power from independent sources.

In December, Hood also accused Entergy of deceptive-trade practices, antitrust behavior, accounting manipulation and unlawful enrichment, among other charges. Additionally, he claims Entergy used Mississippi customers' energy bills to finance nuclear plants in the Northeast and accused the company of diverting $71 million in hurricane recovery funds to the northeast nuclear facilities, which do not provide power to the state.

This month, the company reversed itself on an earlier claim to the PSC that a contract found liable in Louisiana had no impact on Mississippi customers' fuel adjustment rates—a reversal that Presley described as "seismic," and Hood described as "proof" of misdeeds.

Entergy claims the reversal was merely the result of the company's continual fact-checking.

The above story is an expanded and updated version of breaking news posted Jan. 14 in the same space.

Previous Comments

ID

142908

Comment

Ladd, Great article! It looks like the AG and the new PSC Commissioners are working together to protect Mississippians from corporate "mavericks". Could you please explain your headline to me. Is it the Public Service Commission or Entergy refusing (refuting?) their own audit finding?

Author

FrankMickens

Date

2009-01-14T19:49:18-06:00

ID

142909

Comment

The headline made sense on the original blurb on this, but they've put a longer story up. In fact, I think they pasted in the wrong story above that's already up. I need to go research this.

Author

DonnaLadd

Date

2009-01-14T20:04:31-06:00

ID

142910

Comment

OK, Casual, I figured it out and corrected the above piece. You had commented above on this story, which had been pasted into this space above by mistake. Sorry.

Author

DonnaLadd

Date

2009-01-14T20:21:16-06:00

ID

142930

Comment

A much more detailed piece just posted above, by the way. Good for Presley for standing up for ratepayers. Where are you, Haley Barbour?

Author

DonnaLadd

Date

2009-01-15T13:52:06-06:00

ID

142951

Comment

I've got some questions for a follow up article. Has the PSC ever rejected an audit from the Public Utilities Staff before? What did the consultant the PSC hired last year to audit Entergy report? What is the status of Attorney General Hood's suit against Entergy before Judge Dewayne Thomas?

Author

Curley

Date

2009-01-16T16:19:54-06:00