“This is just one baby step in an effort to reform how Mississippi ratepayers have been charged,” Northern District Public Service Commissioner Brandon Presley said Wednesday. “A lot more has to be done.”
Southern District Commissioner Leonard Bentz said it’s “unacceptable for utility companies to charge 13 percent back to their customers.”
The new measure will require utilities to use the Prime Lending Rate when calculating carrying charges.
Last October, when commissioners began asking about interest the utilities charged, they learned of the utilities’ “carrying charges” if they failed to collect enough money from customers to cover fuel costs.
Presley said Entergy was charging 12.83 percent interest on all “under” collections while Mississippi Power was charging 13.25 percent. At the time, he said, the prime rate was 5 percent.
“The law says that utility companies are allowed to recover what they spend on fuel when generating electricity,” Bentz said. “However, using the Prime Lending Rate, which fluctuates, is fair and balanced for both the utility company and the utility customer.”
Entergy spokeswoman Mara Hartmann said Entergy suggested tying the cost to the prime rate in hearings last fall.