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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
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