As Entergy customers open their bills for July, they’ll find that the pump isn’t the only place higher gas prices are crimping their wallets.
The power company has levied a 28 percent fuel cost-adjustment for the quarter from July through September to make up for higher prices for the natural gas needed to generate some 60 percent of its power supply.
That’s what brought Mississippi Southern District Public Service Commissioner Leonard Bentz to McComb on Wednesday night to hold the first in a series of public meetings in his 27-county district to hear customers’ concerns.
The public meetings follow hearings in Jackson to look into the increase that Entergy officials said will amount to an additional $29 for every 1,000 kilowatt-hours used.
The state signed a contract with an independent auditor on Wednesday, and Bentz said hearings into Entergy’s hike will continue in Jackson next month. Bentz said the goal of those hearings will be to determine if power providers are buying fuel and using it to generate power efficiently.
While the public service commissioner regulates utilities’ rates, the office has no say over fuel-adjustment costs, Bentz said.
“It’s in the law that the fuel costs are passed on to the customers,” he said, adding that if they weren’t, then utilities could simply raise their rates beyond the added fuel costs, which could add even more to bills. “If there’s not a problem in the numbers, then the fuel costs go into effect.”
D.G. Seago, owner of Seago Lumber Co., said his 65 employees, who make an average $11 an hour, are feeling the pinch of overall rising prices.
“They’re really having a terrible time. … Do they (Entergy) have to pass it on as fast as they do?” Seago said.
“You’re going to have to pay it now or pay it later,” Bentz said. “Petroleum’s going up astronomically; people’s consumption isn’t going down.”
Neither are expenses for consumers, noted the Rev. Frank Lee.
“There is no more money coming in these people’s homes,” Lee said. “Some of these people just don’t have the money.”
Bentz’s assistants on hand for the meeting noted that some agencies, including Southwest Mississippi Opportunity and the Salvation Army, assist low-income customers with paying their bills.
Summit resident Brandon Frazier questioned why Entergy couldn’t absorb some of the costs of the fuel increases by using profits it makes from selling unregulated power it generates to other utilities in other states as a cushion.
“Entergy sells a ton of unregulated power from their nuclear power plants. … Why can’t we just tell Entergy, ‘Look we want to use nuclear fuel rather than the gas fuel,’ ” Frazier said.
He also noted that since Mississippi’s power market is regulated, that means Entergy essentially has no competition.
“I’m forced to buy it from them, and I’m forced to pay for their fuel costs for a gas plant they’re operating wherever,” he said.
Frazier also questioned why Entergy couldn’t be more charitable with the fuel adjustment, citing a Standard & Poor’s report that said the power company had “an impressive growth rate,” and that Entergy top executives were buying back stock in the company.
As for the increases, “I think they should be tapered down,” Frazier said.
Entergy customer Wayne Frazier noted that with the recent belt-tightening most consumers have been forced to do, Entergy should do some of its own.
“Everybody bites the bullet. They’re a monopoly. They don’t bite no bullet,” he said.
Bentz was quick to point out that Entergy isn’t technically a monopoly because its rates are regulated by the state, unlike in unregulated states, where customers can choose their power company — with the catch that the company is free to set its own rates.
Bentz also noted that power companies are guaranteed a reasonable rate of return, which is about 7 percent.
“Would you guarantee my business make a 7 percent profit?” Brandon Frazier asked.
“Why not lower their rate of return?” Wayne Frazier added.
Bentz replied that if Entergy’s rate of return was lowered, then the company would likely have to cut its job force or suspend services such as trimming problematic trees dangling over power lines.
“Maybe they’ll stop buying so much of their stock back,” Brandon Frazier said.
“There’s got to be a better way to have competition in this stuff,” said Gene Jones. “I don’t know why we can’t have a main source out here and get it from whoever we can get the best deal from.”
“You can. It’s called deregulation,” Bentz said.
