Wednesday, August 8, 2012
JACKSON The Mississippi Public Service Commission has opened an inquiry into the state's largest providers of electric power. The commission voted unanimously to look into the financials of publicly owned utilities, Entergy and Mississippi Power Company.
Central District Commissioner Lynn Posey said the inquiry would investigate the power companies' return on equity, which measures a company's profitability as a portion of shareholder equity.
“My main priority is that the ratepayers are and remain protected. The Commission has ordered this study to ensure the proper calculations are being done for the best interest of the ratepayer," Posey said. “As of right now, electric utilities will be first to be evaluated with other investor-owned utilities to possibly follow suit.”
Northern District Commissioner Brandon Presley questioned whether lower borrowing costs in recent years should translate into lower rates.
"The cost for utilities to borrow money makes up a major portion of what they are allowed to charge customers. Now that interest rates are extremely low, it begs the question 'Shouldn’t rates come down, also?’ I say yes," Presley said in a statement.