David E. Dismukes is a professor at LSU and executive director of the university’s Center for Energy Studies. Last year he gave expert testimony to the Mississippi Public Utilities Staff comparing 2016 rates for Mississippi Power and other regional utilities. It included a chart that I’ve referenced several times to say Mississippi Power, which provides electricity in southeast Mississippi, costs more than 50 percent more than Entergy Mississippi, which sells power in the western half of the state.
Jeff Shepard, a spokesman for Mississippi Power, said those numbers aren’t accurate and requested a correction. Shepard pointed to a June 6 press release from Entergy that said a typical Entergy residential customer using 1,000 kWh would have a bill of $101.37 from July through September.
Shepard said the bill for Mississippi Power residential customer using 1,000 kWh in September would be $139.72. That’s only about 38 percent more, not as much as I’ve previously claimed. Wanting to get it right, I began researching the issue. What I found is that it’s very difficult to determine how a power bill is calculated.
The problem is you just don’t have a straight rate per unit of power you consume. There are all kinds of other credits and debits.
And the per-1,000-kWh calculations provided by light companies don’t disclose how they make that calculation.
So I emailed Dismukes, who sent me back an updated study based on 2017 figures pulled from annual reports filed with the Federal Energy Regulatory Commission. Although that doesn’t factor in price changes made this year, it’s the latest full year available.
Dismukes takes the amount of money electric companies received from residential customers and divides it by how much power they used. That gives you “residential base revenues per MWh.” In other words, how much everybody paid divided by how much everybody used. That makes sense to me.
Mississippi Power’s was at $85.43/MWh in 2017 and Entergy Mississippi at $49.57. That’s about 72 percent higher.
However, Mississippi Power disputes that methodology. It filed a lengthy rebuttal to the Mississippi Public Service Commission that included testimony from Cindy Shaw, its comptroller.
She said electric utilities have different costs because they have various customer mixes (residential versus industrial), service territory characteristics (terrain, population density) and stage of business cycle (whether they just built a power generating plant and are having to recoup their investment). Shaw said Mississippi Power has a relatively high proportion of wholesale and industrial customers, a relatively small and non-contiguous service area that is mainly centered around cities (for example, it provides service in Columbia but not rural parts of Marion County) and has “superior customer satisfaction and service reliability.” That last one made me chuckle: Mississippi Power’s customers must really love paying more than their neighbors in the western part of the state for the exact same thing.
More significantly, Shaw said Dismukes should have included wholesale electricity sales in determining how much people used because that’s a significant part of how much power the company generated.
In the end, I don’t know who is right or exactly how much more Mississippi Power costs than Entergy. But here’s the burning question that needs to be posed to conservative political leaders who say they support free markets: If I get tired of paying more, why can’t I switch?
Reach Editor/Publisher Charlie Smith at csmith@columbianprogress.com.
