Jackson Free Press

Correction appended.

Republicans in the Mississippi Senate could kill a House bill that would merge the Public Service Commission, which elected officials run, and the Public Utilities Staff, which is operated by governor-appointed staffers. The House of Representatives Public Utilities Committee passed a bill last week moving the Mississippi Public Utilities Staff back under the supervision of the Public Service Commission. As the Jackson Free Press recently reported, Commissioner Brandon Presley and others complain that the separation has inhibited the Commission's ability to correctly audit power company Entergy Mississippi and how it imposes rates on Mississippi consumers.

The Mississippi Public Service Commission refused Jan. 14 to sign off on an audit report referred by the Public Utilities Staff, claiming the report did not answer the question of whether Entergy Mississippi, which provides electricity to the majority of the state, bought the least expensive power possible in 2007.

Public Utilities Staff Executive Director Bobby Waites, whom Republican Gov. Kirk Fordice appointed, could not assure commissioners this month that the audit report determined if Entergy Mississippi's procurement was at the "rock-bottom lowest price."

A newly merged and more effective PSC would give Mississippi utility companies a serious headache, and the Republican-dominated Senate will likely kill the bill. Senate Republicans follow the whim of Gov. Haley Barbour, who receives income from the Washington lobbying firm that he co-founded, which lists Mississippi Power's parent company, Southern Company, as a client. Politico reported last August that Barbour, a former RNC chairman, co-hosted a party at the 2008 Republican convention along with Southern Company in Minneapolis.

The PSC, occupied by members who won elections as recently as last year, has been flexing its watchdog muscles ever since Entergy requested a 28-percent rate increase on customers last July. The request zipped past the Public Utilities Staff with record speed, only to outrage members of the PSC when it hit their desks—a situation that likely would have never happened were the two agencies under the same roof.

Attorney General Jim Hood, a Democrat acting as the PSC's attorney, accused the power company of buying more expensive fuel from its affiliates—which raised the company's stock—and charging customers for the higher prices instead of buying power from less expensive sources.

Since the Hood/PSC investigation of its practices, Entergy about-faced on an earlier claim to the PSC that a Louisiana contract for which the company rebated $72 million to customers there, had no impact on Mississippi customers' fuel adjustment rates. Entergy later admitted that the practices leading to the Louisiana case might have affected Mississippi ratepayers.

Commissioners found this correction to their previous statement so inflammatory that they demanded it in writing. Then, last week, the company revealed to the PSC that the problematic contract may have extended further back than when it had initially told commissioners. Entergy first claimed the contract had not impacted Mississippi ratepayers outside the window of the years 2005 to 2008.

Entergy spokeswoman Mara Hartmann said the two corrections resulted from nothing more than the power company's continued efforts to audit its numbers.

"We've got thousands of documents that must be reviewed. There are literally hundreds of fuel-purchasing transactions per day, thousands per week. That's why it's taking us so long to do such a thorough review," Hartmann said. "And as we go through this lengthy and complex analysis, we'll be keeping our customers informed of our findings."

House Bill 1090 reverses a 1990 move by legislators to divide the Public Service Commission after Public Service Commissioners David Snyder and Lynn Havens were convicted of extortion, bribery and conspiracy in 1989.

The separation resulted in PSC auditors and accountants moving to the Public Utilities Staff, which is under the authority of governor appointees, rather than commission employees. A few states, including Vermont and North Carolina, have instituted a similar separation of power.

Presley played down the importance of separating the Utilities Staff from the Commission.

"That separation was kind of a knee-jerk reaction to a bad situation," Presley said. "That was a long time (ago), and the current arrangement forces the commission to run inefficiently."

The merger bill already faced not-so-subtle opposition in the House committee. HB 1090 contained a section financing PSC audit reports with utility companies' funds, making the bill a "money bill." Money bills require a three-fifths committee vote in order to pass.

Seeing the bill was on its way to a speedy death, House Speaker Billy McCoy attended last Tuesday's committee meeting and, according to one lobbyist, "eyeballed committee members until they got the hint and passed it." Legislators removed the added Section 5 of the bill, which made it a money bill.

Editor's note: In an earlier version of this story, reporter Adam Lynch incorrectly stated that Southern Company is the parent company of Entergy. It is the parent company of Mississippi Power. The story above is corrected. We apologize for the error.