The city of Clinton issued the following statement.
In an action that could impact other municipalities, the City of Clinton has filed a Formal Billing and Services Complaint against Entergy Mississippi, LLC (“Entergy”). In the filing, City officials are asking the Public Service Commission (PSC) to investigate and determine if Entergy’s charges in regards to street lighting are contrary to Mississippi Code §77-3-41.
Entergy is the provider of street lighting services to over 25,000 residents of the City of Clinton via billings to the City of Clinton. City officials are asking the Public Service Commissioners to investigate several areas of concern in billing documentation acquired by the City.
· Paying monthly fees for lighting poles that are decades old and far exceed any known depreciation schedule;
· Paying monthly fees for obsolete mercury vapor lights that should have long since been replaced by more energy efficient fixtures, and;
· Paying monthly fees for underground supply lines installed as far back as 1946.
It is the City’s position that Entergy’s charges for street lighting are contrary to Mississippi Code §77-3-41 as the rates are unjust, unreasonable, and materially excessive, particularly given that the amounts charged by Entergy are never reduced.
The City pays for this equipment in perpetuity, long past any reasonable useful life or statutory depreciation schedule.
One particular example involves 331 concrete poles installed in 1979 as best as the City can determine, for which the City is still paying a monthly fee. By the City's calculations the cost of these poles at the time of installation would have been approximately $104,642 yet the City has paid to date approximately $1,100,000 and is still paying every month. If installed at today's prices, the cost of the poles would be approximately $397,000.
It is the City of Clinton’s contention that street light assets fall within the residual asset class to which applies a 7-year depreciation period.
The City has found case law that indicates these assets should be on a 7-year depreciation schedule. The United States Tax Court has held that street light assets owned and depreciated by an electric utility do not constitute assets used in the distribution of electricity for sale and do not fall in asset classes subject to 15 or 20 year depreciation periods.
Additional examples of unjust, unreasonable, and excessive practices also exist. Billing documentation acquired by City leadership, indicates the City is still being charged for “Underground supply line (per foot installed after 1-1-1946)” and “30 ft. Class 7 Wood Creo Pole (installed prior to 1-1-1979)”.
“It is incomprehensible that Clinton is being charged for these items that have benchmark dates from 74 and 41 years ago, respectively. No specific installation data is provided for the vast majority of street lighting assets for which Clinton is paying,” stated Mayor Phil Fisher.
Prior to filing the formal complaint, the City sought clarifying information from Entergy, but thus far Entergy has not provided documentation or explanations that prove unequivocally why these charges are not unjust, unreasonable, and not materially excessive.
Mayor Phil Fisher believes that “these findings are unconscionable on its face, particularly given the City's position as a guardian of taxpayer dollars. We appreciate the Public Service Commission’s willingness to take a fresh look at this matter and bring clarity for the City and other cities across the Entergy service area.”
24 comments:
If you have internet service with Comcast and pay a monthly fee for your cable modem you are a fool.
and clinton fixes sewer lines also...
this is what city leadership looks like.
Sounds to me like that for the past several decades no one at Clinton City Hall has seen the need to question this.
If the City prevails, it will be Entergy consumers who foot the bill.
There goes the incentive for Entergy to quickly install lights on electricity poles to help deter crime. What's the over/under on how soon the Bold New City follows in Clinton's footsteps?
Good for Clinton! However, this means my home power bill will be going up again soon to offset Entergy’s loss of revenue from municipalities.
The PSC must approve any proposed rate schedules and rate increases for utilities. At this point, no elected official would allow Entergy to pass their losses from a City on to the residential ratepayer. That would amount to political suicide.
This is a major cash cow for Entergy. They have no leg to stand on and have been fleecing local municipalities for years. Go ask Jackson Councilman Stamps as he's been fighting with them for years.
BTW, all utilities do this....especially MS Power.
Energy cannot raise residential rates without a vote from the Public Service Commissioners. The Commissioners are elected and will not raise residential rates unless they want to get kicked out of office.
The amount in question is "smaller" than small potatoes to a multi-billion dollar company.
If the City is successful, look for an avalanche of similar claims by other municipalities.
Good for Clinton! Paying for decades old light poles and outdated light fixtures and underground lines is outrageous. Entergy should be required to immediately remove all light poles, rip up the outdated underground lines, and allow the City of Clinton to replace and maintain the light poles, service the light fixtures, and install modern underground supply lines. I'm sure Clinton having to provide the necessary personnel, trucks, equipment, and lighting inventory to service the city's lights would be cheaper. Right? Of course right.
It’s time for MS to follow the lead of states like Texas that have taken the power of monopoly control away from their energy providers and give the power of choice to their citizens. Entergy has become extremely difficult to deal with, as any professional that deals with them can tell you. Now cue Mara Hartmann to tell us in smug tones how Clinton is just lucky to have Entergy’s services.
"...can not raise RESIDENTIAL rates without..." Doesn't mean squat! They'll then add it to commercial accounts who will have to up prices to cover the increase. If you don't think utilities get what they want, you're mistaken.
Utilities "PAY WHAT I SAY"
Who pays for the poles if one is knocked down by a storm or unknown driver? Who replaces lights, services, etc. Does the City have to pay each time one is replaced or is this included in the monthly rent? I'm genuinely asking. I think its absurd to pay on them for this long, but all Entergy will do is rename and bill differently for a "utility line service fee" or something of the sort.
@11:34 AM says "The PSC must approve any proposed rate schedules and rate increases for utilities. At this point, no elected official would allow Entergy to pass their losses from a City on to the residential ratepayer. That would amount to political suicide."
Rate increases are handled through the PSC. Entergy knows how to handle Brandon Presley, who is basically running that show. Entergy will get what they want. Trust me on this.
Another big scam, Entergy gets paid a flat fee every month for all street lights. No matter how many actually work. They have no incentive to replace broken or non-working lights as they're getting their money regardless.
@1:17 Would think Entergy has insurance to cover their property in cases where specific person cannot be identified or held liable.
@1:33 Hopefully PSC will come through and do what is right on this one... then not allow Entergy to just slip in a rate increase somewhere else to cover for having this scheme exposed. Years of taking advantage shouldn't be rewarded with being allowed to shift burden somewhere else.
12:04, I don't think anyone has argued about whether the city should pay for infrastructure. The problem is with having to pay for the same infrastructure many times over, and in perpetuity.
12:22, if you think the power over energy was transferred to the people of Texas, you don't know anything about Texas.
I’m far, far from a left-wing environmentalist and view many of Obama’s eco initiatives as outright scams against the taxpayers (e.g. Solyndra), but I look forward to the time when solar and other sources can enable us to kindly tell Entergy and other utility monopolies to GFAD. The technology ain’t there yet, but it’s just a matter of time.
7:35, I wouldn’t get too excited or expect a reduction in your bill anytime soon. Entergy is building the largest solar farm in Mississippi right now. This way they can tell the public “you're already getting solar power so there’s no need to put up your own panels”. They gotta figure out a new scam to keep their failing business plan afloat.
https://markets.businessinsider.com/news/stocks/mississippi-public-service-commission-gives-green-light-to-1-000-acre-solar-farm-1029090821
Entergy has been doing this for years. It is a scam that is worse than a check cashing store.
City thinks they are getting a deal paying monthly fees and not having to front the whole amount.
The payments in perpetuity should be illegal.
Entergy is a licensed monopoly and can’t lose money.
Would be nice to see the PSC and courts throw all these contracts out.
But that is unlikely. Entergy has some stroke.
You can compare the practice of charging a monthly fee for the streetlight/streetlight pole with a scenario where you buy a car from someone and sign an agreement with that person to pay them a monthly fee. The monthly fee in this case thought includes not only the capital cost of the car but also the cost of the gasoline used in the car, the cost of any normal maintenance (oil changes, wiper blades, tires, etc.), and the cost of any abnormal maintenance (wreck repairs, replacement if stolen, etc.). The agreement also has provisions to replace the car when it gets old with a new one without a change in the monthly payment. This type monthly payment is much different than a simple 7 year depreciation payment schedule described by the City of Clinton.
What people are not taking into account is that those poles have more than likely been replaced over the years due to automobile accidents and natural disasters, the fact the the bulb has been replaced countless times over the years, the fact that they lights use energy and the city needs to pay for what they use. There is more than likely a contract that the city agreed to at the time of installation. I hope this helps readers understand just a few of the items they may not have thought of.
The document attained by the City, which Entergy should provide if requested, but doesn't, outlines the charges by pole, fixture, brackets, bulb and maintenance. The costs challenged by the City are only the poles, which were installed between 1971 - 1979 and are still in use (dates stamped on them). Brackets, fixtures and bulbs were separate line items in the detailed billing. Cities only get a two page bill of charges for all lights, not an itemized 700 page bill like the one that fell into the City's lap.
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