The Public Service Commission’s (PSC’s) job is to protect small customers from big monopolies. Entergy Mississippi is part of Entergy Corporation. It’s a big electricity monopoly with utility subs in four states. It’s a government granted and government protected monopoly.
Home owners and renters and small business are small customers. PSC’s are regulators empowered by state legislatures. In Mississippi, the PSC is supposed to assure small customers reliable, affordable electricity. The current PSC is trying. Some past PSC’s, not so much. The PSC has three commissioners who represent different parts of the state and are elected to serve four-year terms. The current commissioners are independent and are trying to protect small customers. That’s probably why they’ve been benched. Who benched them? The Governor encouraged the Legislature to neuter the PSC to get Amazon to invest $10 billion in Mississippi and build two data centers here. What did the Governor and the Legislature do? Here are some of the concessions they made to Amazon. The PSC cannot change what Entergy MS and Amazon agree to – even if it harms other customers. Entergy MS’s costs to build plants, generate, and transmit power are exempt from competitive bidding. Current 4% annual cost increase cap in Entergy’s Formula Rate Plan is removed. So there are no limits on Entergy’s annual rate increases related to the Amazon project. Entergy may begin construction prior to government permits and approvals. Costs incurred prior to approvals are deemed “used and useful” regardless of subsequent reviews. The PSC’s historic used and useful test to determine if costs are prudent and can be included in the rate base is moot. Rates for small customers have risen in other states with data centers. They are likely to rise more in Mississippi because these concessions make the “data center effect” worse. What is the data center effect? It’s making small customers pay for part of the huge investments utilities make to provide power to data centers even though small customers don’t need or use the power. “That’s not fair,” you say. You are right, but it’s profitable for utilities like Entergy. And it’s a sweetheart deal for Amazon because those customers pick up part of the tab for its power. Mississippi may be the poster child for the worst data center effect in the country. Why? Because the Governor and the Legislature have given Entergy MS a blank check that the PSC can only audit and that small customers must cash.
The way utilities make money is to spend money on power plants, transmission lines, substations, and other infrastructure. The more they spend, the more they make because they get a government-guaranteed 10.5%+ return (profit) on their approved investments.
Entergy Corporation borrows some of the cost of its investments at lower rates to leverage its return on equity (shareholders’ capital). It was 11.6% in 2024. Pension funds like to invest in utilities . They have predictable high returns, safe dividends, and no competition.
Entergy MS is a government-juiced monopoly – thanks to the Governor and the Legislature. Its returns related to investments for Amazon’s data centers are likely to be higher than Entergy Corp’s other subs. They may be the highest of any utility in the country. (Some record for the poorest state.) Let’s see why.
In a nutshell, the why is: Entergy MS gets a guaranteed return on all its investments related to Amazon – whether they are approved or not. The PSC has been benched. So with no officials in the game, will Entergy MS cheat? Mississippi utilities have cheated before.
Remember Mississippi Power’s Kemper County Lignite boondoggle? It was supposed to turn low-grade coal into synthetic natural gas to generate electricity. It too was championed by a Mississippi Governor. It was supposed to cost $1.6 billion. The PSC, beholden to the Governor, threw no penalty flags while the company lied and its cost ballooned to $7 billion.
Mississippi Power finally gave up on turning lignite into synthetic natural gas and paid for most of the plant cost. But the PSC stuck residential customers with a 17% rate increase anyway to modify the plant’s turbines to run on natural gas and generate electricity that wasn’t needed in the first place.
So yes, with Mississippi’s PSC benched and prohibited from approving costs, Entergy MS might be tempted to cheat – because the more it spends, the more it makes. How might it cheat?
It has blanket immunity for whatever it does under its agreement with Amazon, even if it harms other customers.
Its construction cost for plants, transmission lines, substations, etc., are exempt from competitive bidding. No competition to keep contractors honest.
Current 4% annual cost increase cap is removed. No limits on rate increases related to Amazon for small customers.
It can begin construction without waiting for permits and approvals. (That may make sense to save time because state and local permits can take forever.)
But the PSC can only review those costs. They are deemed prudent and go into the rate base. So haste can make waste that’s profitable for Entergy.
In contrast to Mississippi, Georgia’s PSC has moved to protect residential customers from Georgia’s data center boom. Early this year, it approved new rules requiring data centers to pay for generation, transmission, and distribution costs incurred to serve them. It will freeze rate increases for three years. Georgia’s Legislature has moved to plug loopholes in PSC rules that could permit Georgia Power to pass data centers’ expenses onto residential and small business customers. Their rates have increased 37% in the past two years.
Hello Mississippi Legislators. The voters who elected you include homeowners, renters, small business owners and employees. They are facing Tsunamis of rate increases. You are the cause.
When the rate increases hit, your constituents may look at Georgia’s 37% and think: “Hold my beer – while I replace my legislator with one who cares about me.”
Kelly Williams authored this column for Bigger Pie Forum. Bigger Pie Forum sponsored this post.
26 comments:
PSC was defanged by Pheel and neutered by Tate. It’s nothing w/o Neilson Cochran. Just a stepping stone
Feel's the grift that just keeps on grifting!
Now we know why Amazon came here. Cause again, we allow grifting and seldom if ever do anything to stop it. Steal $10 from the coffee fund, we will lock away the key, but grift on us.... just look the other way and move on.
No sure why Bigger Pie nor the PSC should be concerned about a private arrangement between two businesses. I thought Bigger Pie was all about free markets?
I can’t be bothered to read the article but it Amazon will invest in a dozen of those small modular reactors that hopefully aren’t vaporware, it should be a win-win for Amazon and the PSC/Entergy.
Intro to Small Modular Reactors - For the GreenTeeth no coin types who haven’t heard of SMR’s
3:59, Because the public will end up paying for it.
I'm convinced. Tater is just another MS grifter.
Deregulate energy and let the free market prevail. Wait, nevermind, all hail the PSC. This think tank needs to make up its mind.
“The more they spend, the more they make because they get a government-guaranteed 10.5%+ return (profit) on their approved investments.” This sounds like Bechtel and Grand Gulf.
3:59 PM, there isn’t a _______ thing free market about residential customers paying increased rates so Bezos can get more yachts. I’ve voted for Tate every time he’s run but there damned well better be more to this story or my votes for him are over in Republican primaries.
Tater is far above the lowly level of Grifter. If you haven't noticed, he now wears cargo pants. Why? Because his seer-sucker suit-pants will not near-'bout hold all the cash he collects. Haley Fisakerly is simply Tater's cash-pipeline from Entergy.
Meanwhile: Mississippi's Industrial recruitment incentives program has now taken a new turn - Exempting a business from consumer-protection policies.
Amazon made the single largest investment in MS history, and these guys, who’ve all made their money and aren’t impacted by anything, want to complain about anyone and everyone.
What grifting legislators introduced/shepherded the bill(s) to passage that allowed this to happen? I could never vote Democrat, but Republicans have handed the state over to Big Alcohol, gambling and lottery interests, "cannabis" drug pushers, and now a greedy energy monopoly while living it up in a Super Bowl luxury suite. What a venal bunch of low lifes who can't seem to craft a budget in three whole months.
I will say again. Grand Gulf already generates more energy than Mississippians need and sells it to other states. We do not get the benefits from that though at this point no Mississippian should owe no money to Entergy for anything. MPL promised that and simply changed their name to Entergy...it was a "buyout" on paper in name only. Some days it truly looks like we have an uncommonly high number of sociopaths and criminals whose primary criminal enterprise is government.
From what I hear, MS politicians are so cheaply bought that Tater and all the involved legislators cost Entergy and Amazon less than $100k. A small price to pay for billions in profits.
The guaranteed rate of return is not just for Entergy. I believe MS Power and the gas utilities get the same return. As long as the investments in facilities are considered necessary the cost gets added to their rate base.
It’s always bugged me to see Entergy running ads on television, as if they have competitors and a person had a choice of where to buy their electricity from.
Tater is in bed with big energy. Is big pharma next?
Lmao at all the poors who aren’t earning six figures + pension working for a public utility company
The PSC is worthless. All they do is rubber stamp what these utility providers want like Entergy and make them do nothing in return to earn that rubber stamp. My power in Fondren is the most unreliable energy of anywhere I've ever lived, and it's because the PSC won't make Entergy update its infrastructure and maintain its right of ways. And, I leave right around the bend from Haley.
The bumpkin REA's pay MS politicos through their ACRE PAC slush fund. They don't want the Mississippi legislature to ever open up the Electric Power Asso. of Mississippi Enabling Act legislation...They like it just as it is.....
PSC has a responsibility to protect me from unwarranted increases in my electricity bill. I thought the Governor would do the same. Evidently not!
He can’t run again for Governor!
All is clear now, I was wondering why Entergy management was so overpaid for not that capable of people. Why not, Entergy actually makes more profit by overpaying people. I got it now. That is a hell of a guaranteed return just by spending too much, the profit rises from it. It all makes sense now. So, ratepayers pay for generating facilities but Entergy can manupulate how they sell power to put the expense on Ratepayers but sell electricity on the marker-even to a subsidiary at a loss and their profits are guaranteed while they shuffle profits and expenses around. This is hard to believe and then they will sell power to Amazon cheaper than generating costs knowing the small time ratepayers will cover the difference. The amount of market manipulation must be staggering.
No, it called subsidization. Larger rate payers, and for that matter "member-owners" subsidize the rates/costs paid by the smaller electric energy users. Forensic accounting can show and prove this. Expressed another way, rate payer's electric rates charged, do not cover dollar for dollar the rates/energy consumed. Could be a big lawsuit for someone to tackle....
Haley Fisakerly (Entergy MS) is told what to do by Entergy corporate and is their pawn. He has never had the guts to stand up and defend people from Mississippi. If you don't think Haley Fisakerly and the MS PSC worked together to make this happen, you are not in the business. This is the worst PSC in MS history and has done nothing to help business or the people of MS. All 3 of the commissioners are uninformed and know absolutely nothing about the utility business. Nothing gets done at the PSC, nothing! If two of the commissioners weren't so busy running a contracting business and running an rv business, they might learn a thing or two. Not sure who is planning to run against these yahoos, but my guess is they get run out of office. How about someone like bigger pie looking into emails, texts and meetings that the MPSC had with Entergy when the legislation was being put together. Might want to look at the MPSC general counsel at the time. Communications between them and Entergy and Haley F, would be illuminating. Back to the basis of this article, the MPSC was not crippled by anyone, other than the MPSC attorneys and commissioners!
@11:01-Dont forget to include Pattern Energy and their Southern Spirit line. Had to be some serious palm greasing with a few legislators and PSC (past and present).
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