Friday, April 21, 2023

Bigger Pie Forum: Should Entergy Customers Pay More for Less?

 Entergy Mississippi is an electric utility.  It has a legal monopoly in 45 counties with almost 400,000 residential customers (households).  It is regulated by the Mississippi Public Service Commission (PSC).  The PSC has allowed Entergy to increase rates for these customers 32% over the last three years.  Why?  Should customers pay even more for less?

Entergy has some old and inefficient generating plants.  They are expensive to operate and maintain.  So, their electricity is expensive.  The PSC’s main job is to see that utilities provide affordable reliable electricity.  It hasn’t done its job.  It should have encouraged Entergy to replace the old plants years ago.  It didn’t.  That may explain the 32% rate increase.

The PSC was busy encouraging Mississippi Power’s Kemper County Lignite plant experiment.  It took seven years and $7.5 billion for the PSC to admit the experiment was a failure.  Then the PSC approved $986 million to salvage pieces of the failure for a hybrid natural gas plant, $114 million to transmit its power to Mississippi Power’s monopoly service area, and another $78 million for “regulatory assets.”

Oops.  Now the PSC says Mississippi Power has too much power.  It must shut down some other plants to make room for the hybrid’s power.  So, customers will pay $1.2 billion for the unneeded face-saving salvage job, plus costs to shut down operating plants.  Seems there’s no end to customer pain from the PSC’s Kemper experiment.  To be fair, it had help from a Governor, Department of Energy bureaucrats, contractors, consultants, out of state workers, and other pilot fish.

Now it’s doing it again.  Different experiment. Different commissioners.  Different promoters.  Different Governor.  Some of the same lobbyists, bureaucrats, and pilot fish.  Similar predictably bad results for customers.  Are we slow learners or what?

The experiment this time is solar power.  The PSC is the enabler.  Entergy is the experimenter.  Customers are the guinea pigs – again.  Entergy already has one solar plant.  It plans more.  Estimated total cost is $1.2 billion.  Kemper deja vu all over again.

Entergy’s solar dreams are also built on exaggeration, wishful thinking, and some outright lies.  Here are some examples.  Sunshine is free, therefore solar electricity is cheap. Government subsidies and tax breaks pay most of a solar plant’s cost, therefore solar plants are almost free.  Solar plants don’t emit carbon dioxide, therefore there will be fewer climate change disasters.

Solar proponents ignore solar’s intermittency (plants don’t work 70- 80% of the time) and its resulting blackouts.  They fantasize about batteries that will store enough power to deliver (dispatch) electricity when solar doesn’t work.  Until fantasy becomes reality, utilities that build solar plants must also build natural gas plants to dispatch power when solar can’t.

So, customers pay twice – for solar plants and for natural gas backups.  That’s the real appeal of solar for utilities.  They get to build more plants.  Thanks to the PSC, they break even on their higher cost electricity.  They make money financing the plants.  They get a guaranteed 10%+ return on capital invested.  The more plants the PSC approves, the more utility shareholders make.  And the higher customers’ rates – for dirtier (less reliable) electricity.  That’s paying more for less.

Utilities take advantage of laws the legislature passes.  They help the legislature pass more laws that favor them.  Their executives do their jobs.  They’re good at it.  They make millions.  Last year, the CEOs of Entergy Mississippi and its parent company made $14.8 million.  The companies spent millions more on lobbyists, public relations, and lawyers.

Last year, the three PSC commissioners made $234,000.  Total.  The PSC’s budget was $4.4 million.  The PSC is over matched.  It’s high school vs. the Kansas City Chiefs.  Rules, referees, talent, and compensation favor the pros.  The game is rigged.

Small customers suffer.  Big customers don’t.  They have their own highly paid CEOs, lawyers, lobbyists, and flacks.  They get special deals.  They get help from the Mississippi Development Authority and other state agencies.  Or they don’t build plants here.  That create jobs here.  That politicians here can brag about.

What about importing clean electricity from other states to keep rates lower here?  Good luck with that.  The legislature just gave Mississippi’s utilities a monopoly to transmit imported electricity too.

So why don’t entrepreneurs in Mississippi use natural gas from pipelines that cross the state (transporting gas from Texas, Louisiana, and offshore to the Northeast) to generate and export electricity to growing markets in the Southeast?  Well, that’s been tried.  Mississippi’s monopoly utilities wouldn’t take or transmit the upstart’s electricity.  The PSC couldn’t be bothered.  The upstarts went bankrupt.  The monopolies then bought their plants for pennies on the dollar.

Some slow learners still play in rigged games.  Why?  There’s an apocryphal story about a cowboy who said: “Yeah, I know the game at the saloon is crooked.  But it’s the only game in town.”  Smart money doesn’t play in crooked games.  It looks for level playing fields – those without Certificates of Need that create healthcare monopolies, without occupational licensing barriers that protect incumbents, without captured regulators, swinging door regulators, home-cooked crony capitalists, etc.  So, there’s not much smart money that’s investing here.  It’s going to states more open for business.

If you have drunk the “climate change is destructive” Kool-Aid, don’t despair.  Earth’s average sea level air temperature is a Goldilocks 59º F.  It’s warming gradually due to natural causes, not carbon dioxide.  Warm is better.  More arable land.  Longer growing seasons.  More food.  Carbon dioxide in the atmosphere is 410 parts per million – just above life sustaining minimums.  It’s increasing gradually too.  More CO2 means a greener lusher planet.  The earth is about halfway through a 12,000-year interglacial warm cycle.  Enjoy it for another 6,000 years.  Mankind didn’t create it.  Mankind isn’t destroying it.  (For more good news, see Bill Penky’s A Tale of Two Climates: One Real, One Imaginary.)

Solar panels won’t stop natural climate change.  (Neither will windmills.)

 

This post was authored by Kelly Williams of Bigger Pie Forum.  BPF sponsored the post. 


31 comments:

Anonymous said...

electric consumers getting shafted in MS
Solar is an expensive feel good pipe dream shoved down the throat of the man on the street

Anonymous said...

The PSC is in bed with the utility companies they regulate.
It’s a government entity. Since when has a government entity been any more than an empty suit for the tax payer?

Anonymous said...

The only energy investments this nation needs to be making is in nuclear power and ore refining. We used to lead the world until crooks in Washington basically handed our refining capacity to Russia in exchange for cash payments to the crooks kids and relatives.

Anonymous said...

Meanwhile China is building their fifth dual Peoples Liberation Army SIGINT base in Antarctica.
Meanwhile Voyager 1 and Voyager 2 are still transmitting using the nuclear RTG reactors built in the 1970s
Meanwhile America is having a cow over a dude pretending to be a girl endorsing fermented rice water pretending to be a beer.

Anonymous said...

OK KF spill the beans. There were votes by only 3 PSC commissioners. Who voted for and against the increases?

Anonymous said...

PAC campaign contributions MAN!

Anonymous said...

It's a big game. Entergy lobbies the PSC commissioners. The PSC commissioners allow the big rates so that Entergy can pay big salaries, etc. Then sometimes (by plan) Entergy will ask for something they shouldn't get in order to allow the PSC to slap it down and claim they championed for the customer. That is how it works. I've seen it myself. You scratch my back, and I will scratch yours.

Anonymous said...

The PSC and the Transportation Commission are designed to take the heat off the legislature and obfuscate responsibility.

Each commission could be eliminated and replaced with a cabinet-level appointment by the governor. #smallgovernment

Anonymous said...

The only practical application for solar energy (photovoltaic), and it's a stretch, is to help with peak loading times. For example, in the sunny South on a cloudless day when the ambient temperature is blistering, the humidity is at saturation, and our AC units are on constantly.

Anonymous said...

Solar power = virtue signalling for the power industry and the industry groupies at the PSC.

Anonymous said...

Why don't you compare rates/KW of Entergy and other electric utilities in other states ? You will see that their rates are 10, 20, 30, and 40 % less per KW. Facts matter.
Also, the PSC is approving the projects that Entergy in proposing. So don't blame Entergy for trying to upgrade the grid, build new projects, and increase reliability while trying to make a buck as a they do. If you have any issue, take it up with the PSC at their public hearings on all projects, rate cases, etc.
The PSC does this for all utilities BTW, and not just Entergy.

Anonymous said...

"The rube REA GM's can crawl out from under their desks now, if they're not already on the golf course.."

Anonymous said...

For all those that believe Bigger Pie is an outside arbitor and doesn't have its own interests in their bloviating, let me sell you a natural gas field - might be one that is depleted, but still you can think of yourself as a magnate.

BPF has been pushing their natural gas interests for decades now, after getting formed with a few state incentive grants they don't want to acknowledge.

Their suggestion that electric utilities shouldn't be regulated or that they shouldn't be planning ahead several decades never address what where we in Mississippi, as well as folks across the country, would be under their no regulation concept. Texas, and their rolling blackouts last year might be a good example to look at if you want recent accounts, but the entire picture would go back to the first days of generated and distributed electricity.

True, the grid system we have today is becoming outdated and much needs replacing - but imagine how the system would work if there were no monopolied areas. Power lines for Entergy going to some homes, and I'm sure Bigger Pie would have their distribution lines running alongside on their own power poles serving other customers. Along with, of course, dozens or hundreds of other generators and/or distributors.

Do I like regulated monolopies? No. But do I realize that it is the best alternative? Absolutely. Notice, Bigger Pie doesn't come forward with their solution, because what it actually includes is letting them in and sharing the pie with the regulated entities they bemoan.

Anonymous said...

“They fantasize about batteries that will store enough power to deliver (dispatch) electricity when solar doesn’t work. Until fantasy becomes reality, utilities that build solar plants must also build natural gas plants to dispatch power when solar can’t.”

We don’t have to fantasize, these batteries already exist and are being used nationwide. How does this group that is trying to paint themselves as experts in the field not know this? Seems pretty dishonest.

https://www.tesla.com/en_eu/megapack

Anonymous said...

@1:27 - I’ve found that powering my entire house with no electric bill is a practical use.

Anonymous said...

“ Carbon dioxide in the atmosphere is 410 parts per million – just above life sustaining minimums.”

The author doesn’t seem too bright. CO2 levels have risen 50% since the Industrial Revolution. If we are just above the minimum threshold for human survival, how were human surviving when the levels were much, much lower?

Anonymous said...

One of those rubber-stamped rate increases is on appeal to the Mississippi Supreme Court.

Anonymous said...

@ April 21, 2023 at 2:27 PM

24/7 year round? What are you using for storage and conversion? What is the efficiency rate?

Anonymous said...

Solar? How big of a battery would we need to power a town of 3000 for 24 hours?

Anonymous said...

@3:04 - If memory serves correctly, I have an 8.8 kW system that generates between 800 and 1300 kWh a month depending on the time of year. It’s the traditional panels that Tesla sells, not their tile product. It’s hooked up to 2 of their power wall batteries which have a capacity around 13 kWh each.

Anonymous said...

Solar is not the fix all. Solar panels have a 12-15 life then they have to be replaced and disposed of. The elements that make up an industrial panel are not good to release in to the environment.

Anonymous said...

Quite coincidentally as a Commissioner is running for governor, this pops out of the woodwork. Is the Pie Forum in Tater's back pocket or vice versa?

Anonymous said...

1:58, taking up for ratepayers is the job for the Attorney General. Please share the rates of the other utilities.

Anonymous said...

Did the PSC commissioners get a trip to Paris also?

Anonymous said...

Little Elvis (I am related to Elvis/Presley ain't I special) plays the age old game of look at my right hand while I Bitch slap you in the face with my left. Bought and paid for by the renewable crowd and doesn't care what you and I pay for rates to help his friends. Corrupt as HELL!

Anonymous said...

As they say, "Follow the money"..................

Anonymous said...

MPCo isn’t the only waster of money. If you’re ever cruising through Smith County, don’t miss Southern Pine Electric’s unnecessarily huge HQ building on 37 west of Taylorsville.

Anonymous said...

Have to laugh at 5:52pm's comment "Quite coincidentally as a Commissioner is running for governor, this pops out of the woodwork. Is the Pie Forum in Tater's back pocket or vice versa?" an outright admission that Big Boy Brandon has pooped his britches with all he has done to increase rates for Mississippians...............

Anonymous said...

8:27 - Don't laugh too loudly. The post at 5:52 simply reminds us that Bigger Pie is shooting pocket-pool with republican incumbents.

Lemme guess...You're an apple-pie-republican.

Anonymous said...

This article gives no solution to the problem, which Commissioners voted for the rate increase? How can the people make a change if this info isn’t provided?

someone said...

The solution to our clean energy problem is a working Small Modular Fusion Reactor.


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