Picture a cage match: The Publisher of the NorthSide Sun versus the CEO of Entergy Mississippi. No holds barred. Odds favor the CEO. My money’s on the underdog Publisher (think Charles Bronson in Hard Times). Last week’s NorthSide Sun reported the face-off in dueling editorials: “Tell it like it is and go for the gut” versus “spin it for the public and rope-a- dope.”
The question at the heart of the showdown: Who pays for the massive infrastructure to power Amazon’s new data centers in Mississippi—Amazon, or Entergy’s residential and small business customers? Entergy wins either way and gets a 10.5% return on its cost. Amazon wins if it pays less than its fair share. Small customers lose if they pay more than their fair share. Their rates go up dramatically. This is not just a Mississippi story. In other states, data centers have led to skyrocketing residential rates—up 27% in Georgia. Rates expected to double in Virginia. Why? Because if data centers don’t pay their proportionate share of infrastructure costs, small customers pick up the tab. This is known as the “data center effect.” Entergy’s infrastructure spending for Amazon is estimated at $3 billion. In comparison, the estimated cost to upgrade its existing system for small customers is $500 million—just 17% of the Amazon-related cost. On that basis, small customers should pay 17% and Amazon should pay 83%. But don’t bet on it. We don’t know the actual split of the cost. Amazon has a “trade secret” rate. It may be fixed regardless of infrastructure cost. Residential rates will be set by a 315-page bill sponsored by our political leaders. They brokered the deal with Amazon. Did Entergy’s lawyers draft the bill? It clearly favors Entergy at the expense of small customers. How? The bill strips the Public Service Commission (PSC) of its regulatory authority to review Entergy’s costs and approve those that are prudent to be passed on to customers. It also removes the annual 4% cap on rate increases and allows Entergy unlimited spending on infrastructure with no-bid contracts. The result: higher rates expected for small customers. In other states, data center effects have been tempered by strong Public Service Commissions and legislative checks on infrastructure spending. Not here. So small customers may see a record-high data center effect. The Publisher understands and articulates these points. The CEO likely understands them too, but spins a different narrative. He claims small customers’ rates were already set to rise due to needed infrastructure upgrades for grid reliability and new plant efficiencies. Entergy, he says, hesitated to upgrade its infrastructure and raise rates out of concern for small customers and a stagnant customer base. Then along came Amazon with its $10 billion investment (now $16 B), 1,000 jobs (now 2,700 direct and indirect), corporate philanthropy, etc. The CEO says Amazon’s arrival was perfect timing—irresistible for Mississippi’s economy. He says customers need not worry about the bill’s tweaks to the PSC’s authority. Nothing has really changed. Future bills will be lower than they otherwise would have been. The Governor and the Legislature are on board. Amazon will help retain Mississippi’s next generation (less brain drain) and transform the state. What’s not to like? Just trust Entergy.
But secret deals don’t inspire trust. The bill doesn’t either. It says Entergy’s infrastructure costs
will be deemed prudent if accurately recorded —no PSC review or “used and useful” test. All
costs recorded by Entergy’s accountants go into the rate base. (Simpler that way. And better for
Entergy.)
What if Entergy’s accounting is not accurate? In 2022, Entergy paid $300 million to settle
accounting and other issues at its Grand Gulf Nuclear Plant. The PSC said unjustified higher
costs were passed on to customers. It is the largest settlement in state history. (Is that why the
PSC’s been sidelined?)
The CEO and the bill say the Amazon project will help stabilize the grid (energy resilience). But
others say the opposite: that huge demand swings from data centers will actually destabilize the
grid. Meanwhile, Entergy’s aggressive push for solar projects—and their intermittent, unreliable
power—requires backup from natural gas plants. This duplication of capacity adds costs and
raises rates. That’s happened in other states. More solar capacity has led to higher rates.
These competing narratives are about the future. As Yogi Berra said: “It’s hard to make
predictions—especially about the future.” We’ll have to wait and see how this turns out.
Residential rate increases from Entergy’s infrastructure costs are likely to hit just as the
governor’s race kicks off. Large increases could influence the race.
History offers a lesson: Huey “Kingfish” Long, the former governor of Louisiana immortalized in
All the King’s Men, ran a populist campaign against utilities and big business—and won. He
became the scourge of Louisiana’s utility monopolies. He was assassinated.
Some recent Mississippi governors have allied with utilities. They are good bedfellows but bad
news for small customers who have no political clout or voice.
Who’s speaking up for small customers? Wyatt Emmerich: the Publisher—the Cage Fighter.
Thanks, Wyatt. Keep on truckin’.
Kelly Williams authored this column. This post was sponsored by Bigger Pie Forum.
21 comments:
Wyatt and KF have been honing their chops for a long time for a showdown just such as this.
It will be a much fairer fight, on behalf of the public, that it was when Boss Ho . . . I mean Haley Barbour, was governor.
My money is on thje CEO - at the very least he has the facts on his side, all the publisher has is a barrel of ink and tin-foil hat opinions fed by someone who's financial interests are in natural gas and natural gas only.
Not even high school wrestling match much less a cage fight. CEO wins on truth, AND facts.
We all know where this is headed...
Think states 'win' large corporate investment through attractive site locations and qualified workforce? That may be part of the conversation but pales in comparison when considering the multi-year tax breaks and giving these companies everything but the family cow. These data centers are very expensive to operate and it'll be paid from the backs of every Mississippi taxpayer while Amazon gets all the breaks. Thanks Tater...made the home folks proud until the electric bill comes in.
I'm going with Kelly Williams, Bigger Pie Forum, Wyatt Emerich, and the Northside Sun. They seem to have done their homework. And Entergy seems to disagree, yet won't show actual facts and numbers to back up their position. If Entergy really believes that the publisher is wrong, then Entergy should show us where the publisher is wrong.
If this was 100% on the up and up, Amazon wouldn't have a mountain of NDA's and a "trade secret rate". Also, Haley Fisackerly would be out in front of this with the numbers. Entergy has us by the balls as they are the monopoly in the area. Amazon isn't helping saving us any money, I can assure you. They also aren't here because they are paying market value either.
I do want the PSC involved in this at every level, but I tend to agree with 1:53 regarding Emmerich and his tin foil hat. He loves to rant about things of his personal opinion before looking at issues from all sides and for the long term.
Put the spotlight on the PSC and the so-called experts on the staff at the PSC who rubber stamp every Entergy rate request that gets run through that place like goose $h!+ through a tin horn.
This bears repeating. Thank you 2:25.
"If this was 100% on the up and up, Amazon wouldn't have a mountain of NDA's and a "trade secret rate". Also, Haley Fisackerly would be out in front of this with the numbers. Entergy has us by the balls as they are the monopoly in the area. Amazon isn't helping saving us any money, I can assure you. They also aren't here because they are paying market value either."
This is the same Entergy that was buying electricity and then re-selling it to us, after adding its up charge. I agreed with the Jim Hood lawsuit that challenged, unsuccessfully, that business practice.
"Hi. I'm from the 'lectric company and I'm here to help you."
@1:43 - This has nothing to do with Kingfish. Please pay attention.
"We don’t know the actual split of the cost."
"What if..."
"rates are likely...."
It's clear these people are just making up numbers. The "publisher" himself admitted that he ran this analysis through AI and Googled some stuff and wrote "Nobody knows how much residential rates will go up." Looks like the publisher (and The Bigger Pie Forum) are just trying to get clicks and subscriptions. I can understand it from the online blog, but the newspaper publisher should know better. He is trying to scare the public into thinking there is a crisis...and maybe sell some ads while he's at it. Unsubstantiated sensationalized reporting from the media...who is surprised?
Two people to not trust as far as you can spit.
Roger Wicker and Haley Fisackerly.
to: 1:53 AND 2:32..."you don't know DICK," you also don't know Wyatt Emmerich, either; so, what graduate degrees do YOU possess to mack such statements? Wyatt studies the menu at lunch more than you have studied the "gift' or 'grift' provided by our star-struck Governor; yes, big-ass developments are good for the image of Mississippi, just not the ratepayers...
PS: look up 'ersatz' and think 39202...
well spoken, Macy...
fully agree... henry L...
Thanks for dropping by, Haley.
Some PSC oversight would be nice. However, remember that the PSC deals with utilities. The PSC central district commissioner is De'Keither Stamps. De'Keither was on the Jackson City Council when their city owned and operated utility (the water and sewer system) was managed and operated in a fashion that steered it toward collapse. So De'Keither has shown his ability to deal with utilities and it was a catastrophe.
Actually, he opposed moratoriums on cutoffs. Suggested having people pay a $50 minimum per month on stranded bills during Yarber admin. That idea went nowhere. His solution for Jackson water problems is to create a regional authority like in Detroit area.
Stamps was a better Councilman and far more independent than Pudgy Grizzell.
Haley Barbour would be fair to the little man? Are you being sarcastic?
I get tired of Emmerich constantly bemoaning the fate (death) of local news. They did it to themselves. No sympathy for him or his ilk!
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