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Houston, TX Inspection 1185.70 Pensacola, FL NAPSR 1289.88 Bill Ward Oklahoma City, OK Training 694.60 Neill Wood Oklahoma City, OK Training 1152.84 Athens, AL Natural Gas 1064.37 Oklahoma City, OK Training 538.20 __________ TOTAL $ 82,920.28
** Refunds on expenses for Commissioner Brandon Presley $ 1675.00
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PUBLIC UTILITIES STAFF
COMPOSITION AND FUNCTIONS 1
ORGANIZATIONAL CHART 3
EXECUTIVE DIRECTOR 4
DIVISIONS OF THE STAFF 5
ADMINISTRATIVE SERVICES 5
ELECTRIC, GAS AND COMMUNICATIONS 6
WATER AND SEWER 7
ECONOMICS AND PLANNING 8
LEGAL 9
ACTIONS OF THE STAFF 10
UTILITY CASE LOAD 10
ELECTRIC 11
GAS 24
TELECOMMUNICATIONS 29
WATER AND SEWER 34
UTILITIES SUMMARIES 37
ELECTRIC 38
GAS 39
TELEPHONE 40
AGENCY FINANCIAL REPORTS 41
RECEIPTS AND DISBURSEMENTS 41 OUT OF STATE TRAVEL 42
TABLE OF CONTENTS
GENERAL:
ORGANIZATIONAL CHART 3
ELECTRIC UTILITIES:
INVESTOR-OWNED SUMMARY 38
GAS UTILITIES:
SUMMARY 39
TELEPHONE UTILITIES:
SUMMARY 40
AGENCY FINANCIAL REPORTS:
RECEIPTS AND DISBURSEMENTS 41
OUT OF STATE TRAVEL 42
INDEX TO CHARTS/TABLES
1
The Public Utilities Staff was established by the Legislature in 1990. It is an
agency completely separate and independent from the Public Service Commission.
The Staff's organization consists of the Executive Director, appointed by the
Governor from a list of qualified candidates submitted by the Public Service
Commission and confirmed by the Senate, and five divisions: Legal; Administrative
Services; Water and Sewer; Electric, Gas and Communications; and Economics and
Planning. Each division is headed by a division director. The organizational chart
in this report gives the complete staffing structure.
The Staff, by law, represents the broad interests of the State of Mississippi by
balancing the respective concerns of residential, commercial and industrial
ratepayers; the state, its agencies and departments; and the public utilities.
The primary functions of the Staff are investigative and advisory in nature to the
Public Service Commission by and through the Executive Director. This includes,
but is not limited to:
A. Reviewing, investigating and making recommendations with respect to the
reasonableness of rates charged or proposed to be charged by any public utility.
B. Reviewing, investigating and making recommendations with respect to
proposed investments and to services furnished or proposed to be furnished by
jurisdictional utilities.
COMPOSITION AND FUNCTIONS
2
C. Making recommendations regarding all Commission proceedings affecting
the rates, service or area of any public utility when deemed necessary and in the
broad public interest.
The composition of and services provided by the Staff, along with information
related to each division, can be found on the Internet at http://www.psc.state.ms.us.
The Organizational Chart on the following page depicts the Public Utilities Staff for
the 2012 fiscal year.
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4
The Executive Director is the head of the Public Utilities Staff with general
responsibility and charge over the technical and administrative operations of the
agency. He coordinates the activities of the divisions and is responsible for the
formulation and implementation of policies and procedures.
Virden Jones was appointed Executive Director of the Public Utilities Staff on
August 1, 2011, by Governor Haley Barbour. Jones is a certified public accountant
and a member of the Mississippi Society of Certified Public Accountants. He
received an undergraduate degree from Vanderbilt University in Nashville,
Tennessee and a Master’s degree in Business Administration from Emory
University in Atlanta, Georgia.
Jones joined the Staff as a Financial Modeling Manager in 1998 and served in
the capacity of Director of the Electric, Gas & Communications Division since 1999.
Prior to joining the Staff, Jones worked in the private sector as an entrepreneur,
investment advisor and professional accountant. Jones is a native of Greenville,
Mississippi and has lived in the state most of his life. He is married to Dr. Libby
Spence and currently resides in Madison.
EXECUTIVE DIRECTOR
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Technical and administrative support services are provided to the Staff and the
Commission through the Director of Administrative Services and from the direction
of the Executive Director. These services include issuing annual reports as required
by state statute.
Financial data from all jurisdictional utilities are collected and reviewed. The
division serves as a liaison between the Staff and federal and other state agencies,
and provides information to the public involving interpretation of agency policy on
various utility subject matters.
The Division provides utility mapping
services and support utilizing an
automated Geographic Information
System. A complete and current record of
utilities’ rates and tariffs is maintained.
In addition, a library of utility reference
material on current subjects and
innovative trends in the utility industry is maintained. The Staff's central filing is
kept in accordance with a computer case tracking system. Administrative support
services are provided to all Staff divisions, the consuming public and public
utilities.
DIVISIONS OF THE STAFF
ADMINISTRATIVE SERVICES
L to R: Randy Tew, Janie Keyes, Jacqueline
Leverette, Wayne Wilkinson
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The Electric, Gas & Communications Division provides investigative, audit and
advisory services to the Public Service Commission. It also interfaces directly with
the regulated utilities subject to the Commission’s jurisdiction to facilitate their
interaction with the Commission. Applicants seeking certificates of public
convenience and necessity for additional service areas or facilities, as well as other
interested parties, are informed about procedural and other regulatory
requirements. General rate cases, special rate requests, service rule revisions and
other miscellaneous filings are also reviewed and investigated to determine if
proposed changes are necessary and
in the public interest. Typically, the
Staff issues data requests, analyzes
the information provided and makes
recommendations to the
Commission. When necessary,
testimony is prepared and
presented to the Commission in
contested matters.
The Staff periodically examines financial records of the utilities to ensure that
only allowable, necessary and prudently incurred expenses are included in rates.
Furthermore, the Staff monitors the earnings of the regulated companies to verify
that these earnings fall within a reasonable range as determined by formulary rate
plans approved by the Commission. The purpose of these plans is to provide
performance incentives and a mechanism to annually evaluate the rates of each
utility in relation to their cost of service and authorized earnings. Use of the plans
ELECTRIC, GAS & COMMUNICATIONS
(Front Row) Michael Douglas, Joyce Upton, Donna Chandler,
Brandi Myrick, David Kennedy (Back Row) Tera Agee, Wendy
Collins, Ginger Lynn, Jennifer Boen, (Not Pictured) Ruth Nelson
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has reduced the frequency of traditional rate cases and enabled the Staff to have an
ongoing familiarity with the operations of the companies.
The Staff is also engaged in ongoing year-round audits of the fuel and energy
purchases of investor-owned electric utilities and natural gas local distribution
companies. Under state law, fuel and energy purchases are a direct pass-through to
ratepayers, and utilities are not permitted to profit from their sales. Fuel and
energy purchases are reviewed to ensure that only allowable, prudently incurred
costs are recovered from ratepayers. Energy prices are market driven and
unregulated. However, the Commission, upon the Staff’s recommendation, has
approved and encouraged the use of hedging programs to help reduce the volatility
of fuel and energy prices.
The Water and Sewer Division
investigates all water and sewer filings
before the Public Service Commission
and makes recommendations thereon.
Filings reviewed include applications for
construction of facilities, applications to
serve customers, and notices to revise the
rates and charges authorized by the Commission. The Division presents testimony
in selected cases at hearings before the Commission. In addition, the Division
reviews and makes utility viability determinations for Mississippi Development
Authority block grant water improvement projects; the Mississippi State
Department of Health, regarding new public water systems; and the Mississippi
State Department of Environmental Quality, regarding new public sewer systems.
WATER & SEWER
L to R: Maurita Nesmith, David Boackle, Mike
McCool, Ron Brewer, Menton Matthews, Hugh
Green
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A variety of activities are performed to ensure that utilities comply with all
applicable laws and rules. These include auditing water and sewer companies,
making cost studies of construction projects, monitoring construction of new
facilities, reviewing operation and maintenance procedures, and examining
customer service practices of water and sewer utilities. Construction of new electric
generators, transmission systems and substations are also monitored. To aid
utilities in compliance, the Division reviews accounting, engineering, and
operational matters. Technical assistance is also given to Commission staff in their
enforcement duties.
Dr. Christopher Garbacz is Director of the Economics and Planning Division.
Dr. Garbacz coordinates strategy for rate hearings with other divisions in order to
develop comprehensive technical analyses of issues and to prepare appropriate oral
and written testimony. This includes analyzing rate of return on investments,
financing and rate structures. The Director testifies in Commission hearings
regarding the Staff's findings and also makes economic and financial presentations
in other venues. Routine filings and issues currently before the Commission are
examined for the long-term impact on Mississippi
ratepayers and utilities. Chief among these issues are the
activities of the interstate holding companies and federal
regulators.
Research activities on issues not currently before the
Commission are performed. New forms of regulation, the
changing competitive structure of the utility industry, energy markets,
environmental regulation, and similar issues on the national agenda are examined
for their potential impact on Mississippi.
ECONOMICS AND PLANNING
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The Legal Division provides advisory services to all Staff divisions, the Staff
Executive Director, and the Commission. The Legal Division represents the Staff in
hearings held before the Commission, where the Staff may participate in contested
matters as either a party litigant, which may be in a public advocacy or
prosecutorial capacity, or as an advisor to the Commission. If the Staff operates as
a party in a matter set for hearing, the open communication between the
Commission and Staff regarding the contested issue ceases to exist and, for the
limited purpose of the contested matter, all participants must act as
adversaries to protect the fairness of the proceedings.
On a routine basis, the Legal Division performs legal research for all Staff
divisions and for the Commission; prepares cases for hearings, which includes
issuing data requests and conducting
pre-hearing conferences for negotiation
and potential settlement; works with
expert consultants pursuant to Staff
investigations; develops the Commission
hearing record by conducting direct and
cross-examination; participates in the
preparation and recommendation of the
rules and regulations of the Commission;
prepares proposed state legislation;
interfaces with counsel for utilities, which includes informing utilities of
Commission expectations, entering into stipulated agreements with the utilities
regarding their regulated activities, and assistance with the preparation of
proposed orders; prepares Staff’s proposed orders and other legal documents for the
consideration of the Commission; alerts the Staff and the Commission of statutory
LEGAL
(Front Row) Missy Zebert, Cassandra Lowe,
(Back Row) Patricia Trantham, Chad
Reynolds, Paige Wilkins
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deadlines for which action must be taken; keeps the Staff and the Commission
apprised of new laws and recent developments in all areas of public utility matters;
and serves as the Commission’s counsel in matters before various federal agencies,
including the Federal Energy Regulatory Commission (“FERC”) and the Federal
Communications Commission (“FCC”).
An important role of the Legal Division is its continuous involvement with FERC
and the dockets heard before that agency. The Legal Division acts as Counsel to the
Commission in these dockets. Since FERC regulates wholesale rates of Entergy and
the Southern Company, its opinions directly impact the ratepayers of Mississippi.
The Legal Division’s dual role as advisor and adversary provides a unique
opportunity to work closely with the Commission and its staff, while providing
balance to the legal interpretations of questions affecting the broad interests of the
State of Mississippi.
During FY 2012, the Public Utilities Staff participated in 471 utility filings
before the Public Service Commission. Staff action involved reviewing and
investigating contested and uncontested matters and included making
recommendations to the Commission with respect to the reasonableness of rates
charged, or proposed to be charged, by the utility. In addition, the Staff continually
reviewed, investigated and made recommendations with respect to services
furnished, or proposed to be furnished, by jurisdictional utilities. There are 1,430
certificated utilities of record.
ACTIONS OF THE STAFF
UTILITY CASE LOAD
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Overall, the Staff conducts studies and makes recommendations regarding all
Commission proceedings affecting rates, service and area of regulated public
utilities in this state.
FUEL AUDITS - Based on the AG’s Opinion No. 2010-00554, the Staff has
maintained its continuous monitoring activities and other statutory duties related
to the fuel adjustment clauses, and has continued many of its audit procedures
during the course of its monitoring activities.
The Commission continued to fulfill its mandatory duty to conduct or obtain
the fuel audits through its “Contract for Fuel Audit Services” with Nicholson &
Company, PLLC (“Nicholson”) and McFadden Consulting Group, Inc.
(“McFadden”) executed on November 2, 2010, to perform the 2010 and 2011 fuel
audit and management reviews for Mississippi Power Company (“MPCo”). Entergy
Mississippi, Inc. (“EMI”) executed the renewal option included in the “Contract for
Fuel Audit Services” with Carr, Riggs & Ingram, LLC (“CRI”) and Liberty
Consulting Group (“Liberty”) to perform its 2011 fuel audit and management
review.
The end product of the management review and financial audit for MPCo was one
report divided into three segments:
1) “A Report on the Management of the Costs Recovered Through Mississippi
Power Company’s Fuel Cost Recovery Mechanism” prepared by McFadden;
2) The “Mississippi Power Company Fuel Adjustment Audit for the Year
Ended September 30, 2011;” and
3) The “Communication with Those Charged with Governance At or Near the
Conclusion of the Audit” prepared by Nicholson.
The end product of the management review and financial audit for EMI was one
combined report divided into three segments:
ELECTRIC
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1) Executive Summary
2) The “Report on Entergy Mississippi, Inc.’s Management of the Costs
Recovered by Its Energy Cost Recovery Mechanism” submitted by The
Liberty Consulting Group;
3) the “Entergy Mississippi, Inc. Fuel Adjustment Audit for the Period from
October 1, 2010, through September 30, 2011, submitted by Carr, Riggs &
Ingram, LLC.
In addition, the Staff filed on January 10, 2012, its Summary and Comments of
the Staff’s Certified Public Accountant which addressed all of the filed reports. The
financial audits of the independent auditors confirmed that there were no material
misstatements of allowable fuel and purchased energy expenditures during the
audit period. The management review reports for both companies were generally
very favorable, but they also included some recommendations for improvement. On
January 11, 2012, the Commission certified all of the reports to the Legislature.
FORMULARY PLANS – The non-fuel portions of rates of both EMI and MPCo are
regulated primarily through formulary rate plans which are Commission-approved
tariffs. These tariffs provide a formula approach to determining rates based on
each company’s operating results and allowed return on investment. Generally
rates of return on equity (“ROE”) are calculated using pre-established financial
formulas. Performance adjustments to the ROEs are made for scores received on
customer satisfaction, price and reliability to calculate the performance-adjusted
ROE. This adjusted ROE is then included in the company’s weighted average cost
of capital to determine its benchmark return. Once the benchmark is determined,
the expected return based on present rates is calculated to determine if such rates
reasonably provide the company the opportunity to earn a return at or near the
benchmark. A range of no change is established above and below the benchmark. If
the company’s expected return is above or below the range of no change, rates are
adjusted accordingly. If the expected return is within the range, no adjustment is
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made. Both companies make evaluation filings annually. The Staff reviews these
filings to ensure compliance with Commission rules, the underlying tariffs,
generally accepted accounting principles, and accepted ratemaking practices.
On March 15, 2012, EMI filed its annual Formula Rate Plan Evaluation under
Rider FRP-5 (Revised) for the twelve months ended December 31, 2011. The
company reported a benchmark rate of return on rate base of 8.38% and an
expected earned return of 8.29% based on the rates currently in effect. Since the
expected return was within the range of no change, no revenue adjustment was
necessary. Pursuant to the provisions of the Rider FRP-5 (Revised), the Staff
reviewed the 2011 Evaluation Report, its supporting work papers and additional
information obtained through data requests. On April 25, 2012, in accordance with
the provisions of Rider FRP-5 (Revised), the Staff sent a letter notifying the
company that it disputed certain balances included in the rate plan. This 2011
Evaluation Report is still under review.
On March 15, 2011, MPCo filed its 2010 Look-Back evaluation under Rate
Schedule PEP-5 with the Commission. The purpose of the Look-Back filing is to
examine the Company’s actual results to determine if a surcharge or refund is
indicated. The company reported an Actual Retail Return on Investment (“ARRI”)
of 8.026% which was within the range of no change (7.571% to 8.571%), indicating
no need for a surcharge or refund. The filing is still under review.
On November 15, 2011, MPCo filed the data and information for the annual
Performance Evaluation under Rate Schedule PEP-5 for the twelve months ending
December 31, 2012. The company reported a Projected Retail Return on
Investment (“PRRI”) of 6.533% which fell below the range of no change, indicating
the need for a revenue adjustment of $17,432,820. This filing is still under review.
In an order dated May 8, 2012, the Commission cancelled the company’s
requirement to file the 2011 Look Back of Actual Results due to the unresolved
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issues between Staff and the company in the 2010 Look Back filing and the 2012
Projected PEP Filing.
KEMPER COUNTY PROJECT - Sierra Club Appeal of the Commission’s Decision:
On February 28, 2011, the Chancery Court of the First Judicial District of Harrison
County issued a Judgment affirming the May 26, 2010, Supplemental Order of the
Commission and the June 23, 2010, Final Certificate Order. On March 1, 2011, the
Sierra Club appealed the Chancery Court’s Judgment to the Mississippi Supreme
Court. On March 15, 2012, the Mississippi Supreme Court reversed the chancery
court’s judgment and the Commission’s order and remanded to the Commission for
further proceedings. The Court found that the Commission’s order provided
“insufficient detail to enable [this] court on appeal to determine the controverted
questions presented, and the basis of the commission’s conclusion.”
Commission’s Order on Remand: On April 24, 2012, the Commission issued a Final
Order on Remand Granting a Certificate of Public Convenience and Necessity,
Authorizing Application of Baseload Act, and Approving Prudent Pre-Construction
Costs. The Final Order on Remand was a one-hundred thirty-two (132) page order
detailing the Commission’s findings and conclusions after full re-examination and
re-consideration of the record.
Sierra Club Appeal of Commission’s Final Order on Remand: On April 26, 2012, the
Sierra Club appealed the Commission’s Final Order on Remand to the Chancery
Court of Harrison County. Oral argument took place on September 14, 2012, and
the matter remains pending on appeal before the chancery court.
Certified New Plant Rate Schedule (“CNP-A”): On April 27, 2011, MPCo filed the
CNP-A rate mechanism designed to provide recovery of the Kemper Project’s
construction financing costs during the construction period, beginning in 2012. The
Staff, along with its IM, reviewed and investigated the filing including numerous
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sets of responses to data requests propounded by the Staff. On June 1, 2012, the
Staff and MPCo entered into an Amended and Restated Stipulation in which both
parties reached an agreement to all but three CNP-A issues. The Stipulation left
the unresolved issues to be decided by the Commission. On June 22, 2012, the
Commission conducted an evidentiary hearing concerning CNP-A. At the end of the
hearing, the Commission voted to deny the CNP-A rate schedule. The Commission
found that it would not be prudent to allow MPCo to recover costs associated with
the Kemper Project during the pendency of the appeal before the Mississippi
Supreme Court or other appellate tribunal. On July 12, 2012, MPCo appealed the
Commission’s order to the Mississippi Supreme Court.
INSTALLATION OF SCRUBBERS ON PLANT DANIEL - On July 2, 2010, MPCo
filed a Petition for a Certificate of Public Convenience and Necessity to install flue
gas desulfurization equipment (“scrubbers”) at Plant Daniel Units 1 & 2 in
anticipation of new regulations barring sulfur emissions and controlling ash by the
Environmental Protection Agency (“EPA”). According to MPCo, impending EPA
regulations of hazardous air pollutants (“HAPS MACT rule”) will require the
installation of Maximum Achievable Control Technology by the end of 2014 in order
for MPCo’s existing pulverized coal units to remain in operation. The total cost of
the Scrubber Project is estimated to be $625 million. However, because Gulf Power
Company owns 50% of both Plant Daniel Units 1 and 2, half (i.e. approximately
$313 million) of the total cost of the Scrubber Project will be paid by Gulf Power.
MPCo included in its Petition production cost analysis which indicated that
continued operation of Plant Daniel Units 1 & 2 was the best overall option for
customers.
The Staff retained expert consultants, Economic Insight, Inc., to review MPCo’s
production cost analysis. Economic Insight filed testimony, including a report, with
the Commission and participated at the Commission’s first evidentiary hearing of
the matter which took place on January 25, 2011.
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Following the hearing, the Commission’s attorney requested additional information
on several issues concerning the Company’s request, including: (a) any update in
the anticipated Electric Generation Unit (“EGU”) HAPs MACT compliance
requirements; (b) whether the Company’s proposed in-service date could still be
met; (c) any contingency plans if the Scrubber Project approval was delayed; and (d)
any update on whether long-term fixed gas contracts were more viable than at the
time of the Kemper County IGCC Project proceedings. The Company provided
written responses to the information requests on March 18, 2011, and March 22,
2011. Based on those submissions, the Commission authorized the Company in its
2011 ECO filing to continue to spend the minimum amount required to keep the
Scrubber project viable until the EPA issued its final rule.
On December 21, 2011, the EPA released the final Mercury and Air Toxic
Standards (“MATS”) rule. On January 11, 2012, the Commission granted the
Sierra Club’s Motion to Re-Open the Record for Additional Evidence. Pursuant to
the order, the Staff, MPCo and Sierra Club all submitted supplemental evidence
into the record and a second evidentiary hearing was held on March 14, 2012. On
April 3, 2012, the Commission issued an order granting MPCo a Certificate of
Public Convenience and Necessity to build the Scrubber.
On May 3, 2012, the Sierra Club appealed the Commission’s Order to the
Chancery Court of Harrison County; the matter remains on appeal before the
chancery court.
PURCHASE PLANT DANIEL UNITS 3 AND 4 - In January 1998, the Commission
entered an order granting MPCo a Certificate of Public Convenience and Necessity
authorizing MPCo to construct, acquire, and operate approximately 1000
megawatts of natural gas fired combined cycle generating facilities at MPCo’s Plant
Daniel.
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In February 1999, the Commission amended MPCo’s certificate pursuant to a
joint application made by MPCo and Escatawpa Funding, Limited Partnership
(“Escatawpa”) to authorize Escatawpa (a special purpose entity) to “construct,
acquire and own the [Facilities] by lease to MPCo.” The Commission authorized
MPCo to “acquire the [Facilities] by entering into a lease with Escatawpa, with an
option to purchase the [Facilities]; to operate and maintain the [Facilities]; and to
own the [Facilities] upon the exercise of [MPCo’s] option to purchase the
[Facilities].” Thereafter, MPCo entered into an off-balance sheet synthetic lease
transaction with Escatawpa (the “Original Lease”) to finance the construction and
acquisition of the Project.
In June 2003, due to certain changes in accounting rules regarding variable
purpose entities, the Commission approved the transfer of the Project from
Escatawpa to Juniper Capital, L.P. Juniper assumed the debt obligations of
Escatawpa and entered into an Amended and Restated Lease Agreement with
MPCo (“Amended Lease”). The terms of the Amended Lease were substantially
similar to the terms of the Original Lease.
The Amended Lease contemplates two lease terms: an Initial Term, which
expires on October 20, 2011, and an Extended Term, which, if renewed by MPCo,
would expire in October 2021. MPCo had three options prior to the expiration of the
Initial Term: (1) renew the lease for the Extended Term, (2) purchase the Project
from Juniper on the terms prescribed in the lease documents; or (3) surrender the
Project to Juniper (which would have required notice of surrender in April 2011 and
would have reduced MPCo’s available generating capacity by 1,064 MW).
On July 20, 2011, MPCo exercised its purchase option under the Amended Lease.
On July 25, 2011, MPCo filed an Application for an Accounting Order regarding the
appropriate accounting treatment of the purchase. MPCo sought an Accounting
Order that would allow it to defer the difference between the revenue requirement
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of the purchase option and the revenue requirement of the extended lease option,
for the purpose of spreading out the front-loaded costs of the purchase option in
order to minimize the impact on ratepayers. The Staff retained an expert
consultant, Herb Thompson, to assist the Staff in its investigation. Mr. Thompson
filed a report with the Commission which explored the options that were available
to MPCo at the time it exercised its purchase option, evaluated the pros and cons of
MPCo’s decision to purchase the Daniel units and rendered an opinion on MPCo’s
decision. Based on Staff’s investigation and Mr. Thompson’s report, Staff
recommended approval of the requested Accounting Order. On January 11, 2012,
the Commission issued and Order finding that MPCo’s decision to exercise the
purchase option on the Daniel facilities was prudent and in the best interest of
customers. The Commission also approved MPCo’s proposed accounting treatment
finding.
PROPOSAL TO JOIN MISO - On May 12, 2011, the Commission and Staff were
informed by EMI that it and the other Entergy Operating Companies have
concluded that joining the Midwest Independent System Operator company
(“MISO”) will provide meaningful long-term benefits for their customers. EMI
provided Commission and Staff a copy of An Evaluation of the Alternative
Transmission Arrangements Available to the Entergy Operating Companies and
Support for Proposal to Join MISO (“Evaluation Report”), which contained
information regarding the basis for the Companies’ conclusion.
MISO is an independent, nonprofit regional transmission organization (“RTO”)
that supports the reliable delivery of electricity in 13 U.S. states. MISO has an
already-established “Day 2” energy market, a term that refers to a centralized
market-driven generation dispatch process that optimizes the use of the
transmission system and generation assets. According to EMI, this process,
coupled with MISO’s scale, creates a large wholesale market for the buying and
selling of electricity, creating a substantial opportunity for production cost savings
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and other benefits for customers.
On December 2, 2011, EMI and MISO submitted a Joint Application to the
Commission requesting transfer of functional control of EMI’s transmission
facilities to MISO. On January 11, 2012, the Commission entered and order finding
that the issues raised in this proceeding were unique as they related to EMI’s
efforts to join an RTO. Due to the uniqueness of this issue and the potential long-
term impact on EMI’s customers, the Commission found that it and the Staff must
develop additional expertise in this area in order to properly balance the interests of
EMI and its customers. For these reasons, the Commission found it was in the
public interest for the Commission and Staff to obtain consulting services to assist
in the evaluation of the Joint Application.
The Staff retained expert consultants, Economic Insight, Inc., to review the Joint
Application. Economic Insight filed testimony, including a report, with the
Commission and participated at the Commission’s first technical conference on
February 22, 2012, and at a second technical conference on July 16, 2012. Both
Staff and Commission consultants’ findings indicated substantial benefits from
joining MISO.
On September 17, 2012, the Staff and EMI entered a Joint Stipulation
agreeing that the Joint Application is in the public interest, subject to the eleven
(11) conditions contained in the Joint Stipulation. On November 15, 2012, the
Commission issued an order approving the transfer of functional control of EMI’s
transmission facilities to MISO.
THE PURCHASE OF THE HINDS ELECTRIC GENERATING FACILITY -
On July 15, 2011, EMI filed a Petition for Certificate of Public Convenience and
Necessity with the Commission to acquire the Hinds Generating Facility from KGen
Power Corporation. The Hinds facility is a 450 MW combined cycle gas turbine
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located in Jackson, Mississippi. The acquisition price of the facility is $206 million
as opposed to approximately $578 million to building a new facility comparable to
Hinds. The Staff has retained Economic Insight, Inc. to assist in review of EMI’s
needs analysis methodology, and results. Based on Staff’s and Economic Insight’s
review of EMI’s Petition, the Staff entered into a Stipulation with EMI finding that
Hinds Facility meets EMI’s long-term resource needs and is a prudent long-term
acquisition that can reduce EMI’s fuel costs. On February 28, 2012, the
Commission held a hearing and granted a Facilities Certificate to EMI to acquire
the Hinds Facility.
ACCOUNTING TREATMENT OF GRAND GULF III EVALUATION COSTS - On
October 29, 2010, EMI filed an Application for Approval of Accounting Treatment
(“Application”) requesting approval by the Commission of the accounting treatment
for costs incurred and to be incurred in connection with generation resource
planning, evaluation, monitoring, and development activities related to a new
generating unit (“Grand Gulf 3”) at the site of the existing Grand Gulf Nuclear
Station located in Claiborne County, Mississippi.
EMI is not seeking authority to proceed with constructing a new nuclear
generating unit or even with engaging in the full development activities; any
increase in rates or any change in its present rate schedules now on file with the
Commission; or a prudence review or determination of the prudence of costs
incurred to date. EMI has asserted that continuing the development of a nuclear
unit project option at Grand Gulf at a measured pace is appropriate in order to
preserve that option and that such development is a part of and consistent with the
objectives for base load generation described in the System’s Strategic Resource
Plan and in the Mississippi Baseload Act. EMI’s proposal is to defer and
accumulate the costs incurred to date and future costs to be incurred in connection
with planning, evaluation, monitoring, and other development activities for Grand
Gulf 3.
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On October 31, 2011, the Staff and EMI entered into to a Joint Stipulation
wherein the parties agreed that there should be a deferral of costs incurred in
connection with planning, evaluation, monitoring, and other related development
activities for Grand Gulf 3 in the amount of $56,776,306.66, which costs shall be
treated as a regulatory asset, until such time as the docket is resolved. The Staff
and EMI also agreed that the Commission should conduct a hearing on the matter
during 2012, no later than the October Docket Call, at which time the Commission
shall consider evidence regarding whether Grand Gulf 3 costs were prudently
incurred or otherwise allowable. The Staff and EMI further agreed that such
prudently incurred costs shall be recoverable in a manner to be determined by the
Commission. On November 10, 2011, the Commission issued an Order adopting the
Joint Stipulation. This matter is still pending before the Commission.
FEDERAL ENERGY REGULATORY COMMISSION – There have been several
proceedings commenced at FERC that are “spin offs” of the full production cost
equalization case. The following proceedings have either been heard or will be set
for hearing :
Docket ER08-1056-000 (2008) is the second annual Bandwidth filing
required under Opinion No. 480. This proceeding was heard before an ALJ in
June 2009. An Initial Decision was issued on September 10, 2009, upholding
$20M of rough production cost equalization payments for EMI ratepayers. On
October 7, 2011, the Commission issued a decision upholding the ALJ’s initial
Decision in regards to the $20M of rough production cost equalization payments
for EMI ratepayers.
Docket ER09-1224-000 (2009) is the third annual Bandwidth filing under
Opinion No. 480. This proceeding was heard before an ALJ in April 2010. An
Initial Decision was issued on September 10, 2009, upholding $24M of rough
production cost equalization payments for EMI ratepayers. On May 7, 2012,
22
the Commission issued a decision upholding the ALJ’s Initial Decision in
regard to the $24M of rough production cost equalization payments for EMI
customers.
Docket ER10-1350 (2010) is the fourth annual Bandwidth Filing required
under Order No. 480. This proceeding was set to be heard before an ALJ in
March 2011. However, on March 3, 2011, the ALJ ordered that the proceeding
be held in abeyance until the Commission rules on issues pending before it in
other proceedings (ER08-1056 and ER09-1224) that were also raised in this
proceeding.
Docket ER11-3658 (2011) is the fifth annual Bandwidth Filing required under
Opinion No. 480. In this filing, EMI ratepayers received $40M in rough
production cost equalization payments. The Commission has established
hearing procedures. However, in order to prevent re-litigation of issues that are
subject to other procedures pending before the Commission, the hearing
procedures have been held in abeyance pending a future Commission order.
Docket ER12-1920 (2012) is the sixth annual Bandwidth Filing required
under Opinion No. 480. In this filing, EMI ratepayers received no rough
production cost equalization payments. The Commission has established
hearing procedures. However, in order to prevent re-litigation of issues that
are subject to other procedures pending before the Commission, the hearing
procedures have been held in abeyance pending a further Commission order.
Other FERC Proceedings:
Docket ER09-61 (2009) is a Complaint filed by the LPSC at the FERC
alleging that EAI had violated the Entergy System Agreement by selling excess
energy to third party power marketers rather than selling it to the MSS-3 pool.
23
This proceeding was heard before an ALJ in August 2010. Due to EMI’s
ratepayers being harmed by the actions of EAI, the MPSC filed an Initial Joint
Post-Hearing Brief with the LPSC. An Initial Decision was issued on December
9, 2010, finding that EAI’s wholesale opportunity sales, associate energy, and
cost allocations did violate the System Agreement and that damages, in the
form of refunds, shall be paid by EAI shareholders to the Operating Companies
that were harmed. The Initial Decision has been appealed to the full
Commission. On June 21, 2012, the Commission issued an order Affirming in
Part the Initial Decision and Establishing Further Hearing Procedures. The
FERC reversed the ALJ’s ruling that the EAI wholesale opportunity sales
violated the System Agreement. However, the FERC affirmed the ALJ’s ruling
that the opportunity sales were not properly allocated under the System
Agreement and that damages are warranted. The FERC also agreed with the
ALJ that re-running the Intra-System Bill is the appropriate basis for
determining damages but ordered that further hearing procedures are
necessary to determine the amount of damages due to be refunded.
Docket ER09-639 (2009) is a Notice of Cancellation of EMI and EAI to
Terminate Participation in the System Agreement. The FERC accepted the
Notice of Cancellation stating that EAI and EMI met its obligation to exit the
System Agreement by filing its 96-month notice. Thus, EMI’s withdrawal is
effective November 7, 2015. The LPSC and City of New Orleans have appealed
the FERC Order to the US Court of Appeals for the D.C. Circuit. The MSPC
has intervened in the Court of Appeals proceeding. On August 14, 2012, the
D.C. Circuit upheld the FERC’s Order allowing for EMI to exit the Entergy
System Agreement without any continuing obligations to Entergy’s other
Operating Companies.
24
FORMULARY PLANS — The three largest natural gas local distribution companies
(“LDCs”) in the state all operate under formulary plans similar to those of the
investor-owned electric utilities. However, only the plan of Atmos Energy
Corporation (“Atmos”) provides for performance adjustments to the Company’s
allowed return on equity. Each LDC files an evaluation report annually which is
reviewed by the Staff. Investments, revenues, and expenses not properly includable
in rates are disallowed and removed from the calculation of each company’s revenue
requirement. Typically, the Staff and the LDCs agree to certain adjustments in a
joint stipulation which is then submitted to the Commission for approval. If some
issues remain in dispute at the end of the Staff’s review, they are argued in
memorandum briefs filed with the Commission for resolution.
PURCHASED GAS ADJUSTMENTS-
The Staff continued monitoring the purchased gas adjustments of the three major
LDCs in the state. Atmos and CenterPoint Energy Inc. (“CenterPoint”) were
reviewed monthly, and Willmut Gas & Oil Company (“Willmut”) was reviewed on a
bi-monthly schedule. All natural gas purchases were verified against pipeline
invoices and other supporting documentation to determine that they were in
conformity with underlying procurement contracts and price indices reflecting
current market prices. Atmos and CenterPoint both employed Commission-
approved hedging programs to help reduce the volatility of natural gas purchase
prices.
ATMOS ENERGY CORPORATION - On September 2, 2011, Atmos filed its annual
Stable Rate Adjustment (“SRA”) Evaluation for the twelve month period ended June
30, 2011. In its filing, the Company reported an expected return on equity of 7.42%,
which fell below the Company’s performance based benchmark return of 10.00%
and outside the range of no change (9.00% to 11.00%), indicating a revenue increase
GAS
25
of $5,302,520. Pursuant to the provisions of the SRA Rider, the Staff reviewed the
2011 Evaluation Report, its supporting work papers, and additional information
obtained through data requests. On October 11, 2011, the Staff sent a letter
notifying the Company that it disputed certain items. On January 9, 2012, the
Staff and Atmos agreed in a stipulation to decrease rate base by $454,249; reduce
operation and maintenance expense by $1.3 million; reduce depreciation expense by
$619,035; decrease amortization of debt expense by $705; decrease interest on long
term debt by $14,363; and increase income available for equity by $1.2 million. As a
result of the stipulated adjustments, Atmos’ expected rate of return increased to
8.32%, which changed the increase in revenue to $3,248.837. By order dated
January 11, 2012, the Commission adopted the joint stipulation.
In a June 2010 filing, Atmos submitted a depreciation study for the depreciable
assets in its natural gas operations for the Mississippi Division and Shared Services
Unit as of fiscal year end September 30, 2010. The Company proposed to use the
rates developed effective November 1, 2011, for any matter in which depreciation is
a component, including Atmos’ next SRA filing. The study proposed a transition
from Depreciation Accounting to Vintage Group Amortization Accounting for
certain of its General Plant Accounts. The filing recommended an annualized
depreciation expense for its Mississippi division of approximately $11.5 million,
representing an increase in annual depreciation expense of approximately $716,000
per year. The Staff employed a consultant to assist in the review of the filing, and
on January 9, 2012, Atmos and the Staff agreed in a joint stipulation to forego the
implementation of vintage accounting for the time being and continue to use
existing depreciation rates for most general plant amortized accounts, and to reduce
the rate on Account 399 (Other Tangible Property) assets from 28.3% to 23%. The
net effect of all stipulated changes reduced filed depreciation expense by $619,035.
On February 28, 2012, the Commission issued an order approving the joint
stipulation and the depreciation study as amended.
26
On June 15, 2009, Atmos filed a Notice of Intent to modify certain provisions of
its Stable Rate Adjustment (“SRA”) Rider related to the customer survey provisions
in Appendix “E” of the tariff. Analysis of the customer survey data creates the
Customer Satisfaction Indicator, which ultimately factors into the Performance
Based Benchmark Return (the Company’s appropriate return on equity). The
changes proposed included surveying only customers who have actually been served
within the previous three months, replacing and expanding the existing survey with
questions focused on specific customer encounters with the Company, and
conducting the survey in the first quarter rather than the third quarter so that
customers from on-peak periods would be sampled. Modifications to the analysis of
the survey responses included changing the data analysis approach to weight the
overall experience rating and the composite performance factor rating equally, and
developing a new regression formula based on the revised questions and index
performance range. The Staff and Atmos participated in extensive negotiations
which resulted in an agreement that the modifications requested be approved and
included a Request for Proposal (“RFP”) process to select the vendor to conduct the
customer survey. On May 8, 2012, the Commission issued an Order approving the
modifications to the SRA rider schedule.
On December 12, 2011, Atmos filed an application for approval of a Performance
Based Rate (“PBR”) mechanism related to the purchase of its natural gas supply.
As shale gas production has significantly increased, gas supply has risen and driven
prices to record lows. Subsequently pipeline flows have changed, and long haul
pipeline companies have applied for rate increases which have caused Atmos’
demand and transportation costs to rise. The PBR was designed to provide
incentives for the Company to seek savings in its transportation costs by using non-
traditional paths and pipeline bypass strategies. Under the proposed PBR, the
Company would be responsible for all related costs incurred to implement and
maintain the plan, giving Mississippi ratepayers a risk-free opportunity for savings.
Any savings generated as a result of the PBR would be shared with customers on an
27
equal basis through the Purchased Gas Adjustment (“PGA”). Following multiple
discussions with the Company and review of information obtained through data
requests, the Staff recommended approval of the PBR for specific projects over a five
year period requiring monthly and annual reporting. On May 8, 2012, the
Commission approved the Company’s PBR application.
Also in December of 2011, Atmos filed seeking permanent approval of its Asset
Management Plan (“AMP”) using a Request for Proposal (“RFP”) process to choose a
suitable asset manager. Prior to this filing, Atmos had contracted with its affiliate,
Trans Louisiana Gas Pipeline, to manage a portion of its gas supply. The Staff
thoroughly investigated the AMP filing utilizing data requests, analysis of prior
filing history, and numerous interviews with Company personnel and subsequently
recommended approval of the AMP for five years using an RFP for asset manager
selection. The Commission approved the filing on February 28, 2012. On April 20,
2012, Atmos submitted a contract with its affiliate, Trans Louisiana Gas Pipeline,
for approval pursuant to the authorized RFP. The Commission approved the three-
year contract on May 8, 2012.
CENTERPOINT ENERGY INC. - On April 17, 2012, CenterPoint filed a notice of
routine changes in its Rate Regulation Adjustment (“RRA”) Rider and the initial
filing of a Weather Normalization Adjustment (“WNA”) Rider. Significant revisions
were proposed, and following lengthy and detailed investigations and negotiations,
the Staff and the Company agreed to a joint stipulation on May 7, 2012. The
modifications to the RRA included, among other things, changing the test year to a
calendar year; changing the annual filing date to May 1 (June 15 the first year),
with a rate adjustment effective date of July 1 (August 15 the first year);
simplifying the sharing mechanisms when earned returns fall outside the range of
no change; applying rate adjustments to both fixed and volumetric rates; limiting
the adjustments to per book revenues, expenses, and rate base items and making
those adjustments specific to the tariff; removing the Capital Asset Pricing Model
28
from the calculation of allowed ROE; instituting a shared arrangement of Asset
Management Agreement revenues with customers through the Purchased Gas
Adjustment; and establishing a WNA to allow recovery and refund of under and
over collections of revenue resulting from abnormal weather. The commission
subsequently adopted the joint stipulation on May 8, 2012.
Following approval of the RRA and WNA tariffs, on June 15, 2012, CenterPoint
filed its annual RRA Evaluation with an earned return of 4.25% and an allowed
return of 9.09%, indicating the need for a revenue increase of $2,200,188. Staff’s
review of the filing resulted in a stipulation and order for an allowed return on
equity of 9.106% and a revenue increase of $1,743,551. These were approved by the
Commission on September 11, 2012.
WILLMUT GAS AND OIL COMPANY- On September 15, 2011, Willmut made its
annual Rate Stabilization Adjustment (RSA) filing for the twelve months ended
June 30, 2011. The filing reflected an earned return on equity of 4.11% and an
allowed return of 9.05%, which fell outside the range of no change (8.05% to 10.05%)
and indicated the need for a revenue increase of $604,355. The staff determined
that certain adjustments were appropriate resulting in an allowed return of 9.12%,
an adjusted earned return on equity of 7.46%, and a revenue requirement of
$168,395. The adjustments included a slight decrease in weather adjusted
revenues, a decrease in operation and maintenance expense of $393,111, a reduction
in the common equity percentage from 67.89% to 57.04%, and a corresponding
increase in interest expense of $50,800. On November 9, 2011, the Staff and the
Company stipulated to the proposed adjustments and the Commission approved the
joint stipulation by order dated December 6, 2011.
On February 7, 2012, Willmut and EnergySouth, Inc (“EnergySouth”), a division
of Sempra Energy, Inc., filed a joint petition requesting approval of the sale and
transfer of 100% of Willmut stock to EnergySouth. The Staff thoroughly
29
investigated the stock purchase agreement and its potential effects on Mississippi
ratepayers. Satisfied that the proposed transaction would treat Willmut employees
fairly and afford its customers greater rate stability protection through access to a
much larger company’s resources, Staff recommended approval, and on April 24,
2012, the Commission ordered the change of control.
COMPETITION - The impact of competition and migration to different technologies
in the local Mississippi telecommunications market is continuing its unabated
advance. At the end of 2011, competitive alternatives to traditional landline local
service gained even more access lines.
Mississippi’s largest Incumbent Local Exchange Carrier (“ILEC”), AT&T
Mississippi, experienced the largest decrease in access lines. BellSouth
Telecommunication’s d/b/a AT&T Mississippi experienced an access line decrease
over the previous year of over 79,000 lines. AT&T Mississippi’s total line decrease
has approached 620,000 since the inception of competition in the local market.
Mississippi’s Independent Rural ILECs likewise continued to experience
competition’s impact. Rural ILECs witnessed a decrease of over 3,300 in lines
across the state. Intermodal competition from wireless, cable and satellite
represents a major portion of the telecommunications competition faced by
Mississippi’s rural companies.
Wireless telephone companies and cable companies, utilizing Voice over Internet
Protocol (“VoIP”), are becoming increasingly formidable in their competition with
wireline companies. The Wireline Competition Bureau’s June 2012 Local
Telephone Competition Report (“Competition Report”) stated that the June 2011
TELECOMMUNICATIONS
30
statistics revealed that 33.9% of all residential wireline connections are
interconnected VoIP. The Cellular Telecommunications Industry Association’s
December 2011 data reflects that 31.6% of the households in the United States were
served by wireless only. Mississippi’s wireless only households’ percentage
continues to rank as one of the highest in the United States. The Competition
Report also indicates that Mississippi’s wireless subscribers increased from 2.3
million in June 2010 to 2.5 million in June 2011.
SUPPORT OF LIFELINE/LINK-UP PROGRAMS IN MISSISSIPPI- On February 6,
2012, the FCC released FCC 12-11 Report and Order (“Lifeline Order”) to
comprehensively reform and begin to modernize the Lifeline Program. The reforms
adopted in this Order substantially strengthen protections against waste, fraud,
and abuse; improve program administration and accountability; improve enrollment
and consumer disclosures; and initiate modernization of the program for broadband.
Lifeline provides discounts that make telephone service more affordable for
millions of Americans. The Lifeline Order eliminated Link Up support in non-
Tribal areas which reduces the one-time costs associated with initiating telephone
service and line extension to the consumer’s residence. Consumers apply for the
discounts through their telephone provider. These companies are then reimbursed
through the Low Income Program of the Universal Service Fund for the revenue
they forgo by providing discounted service to eligible consumers. In Mississippi,
consumers qualify for Lifeline if they are eligible for Temporary Assistance to Needy
Families, Supplemental Security Income, Supplemental Nutrition Assistance
Program, Medicaid, all Federal Public Housing Assistance, National School Lunch
Program’s Free Lunch Initiative, Low Income Home Energy Assistance Programs or
an income-based criterion. The income-based criterion allows a consumer to be
eligible for Lifeline if the consumer’s household income is at or below 135% of the
Federal Poverty Guidelines. Each consumer who participates in Lifeline must
recertify annually to their service provider of their continued eligibility in either the
31
program-based or the income-based criteria. Mississippi revised its Lifeline
guidelines in Docket 2007-AD-487 to reflect the FCC changes. Lifeline
disbursements for Mississippi increased from $12.0 million in 2010 to $33.1 million
in 2011.
AREA CODE EXHAUST PLANNING-
The 662 Numbering Plan Area (“NPA”) is facing the exhaust of numbers required
for assignment to central office codes. In September 2008, the Commission initiated
a mechanism to forestall the area code relief planning process by requesting the
Federal Communications Commission (“FCC”) to approve a Petition for Delegated
Authority to implement number conservation measures. Such delegated authority
would allow the Commission to mandate 1,000 block number pooling and
assignment. In May 2010, the FCC entered an Order granting the Commission’s
Petition. This FCC action will allow the Commission to forgo the need for current
relief planning and will defer 662 NPA exhaust, as well as the creation of a new
NPA in the 662 area. On May 5, 2011, the Commission approved the
implementation of number conservation measures order in NPA 662 in Docket No.
2011-AD-129. Meetings were held between the Pooling Administrator of the North
American Numbering Plan Administration (“NANPA”) and the affected carriers to
develop an implementation timetable for the mandatory pooling in order to defer
and mitigate the effects of the future exhaust of NPA 662. Mandatory pooling of
thousands-block in NPA 662 began in September 2011. NANPA’s April 2012
forecast estimates that exhaust of NPA 662 will occur in the first quarter of 2016.
FEDERAL UNIVERSAL SERVICE HIGH-COST SUPPORT- The Universal Service
Fund (USF) is one fund with four programs - High Cost, Low Income, Rural Health
Care and Schools & Libraries. The Commission has oversight responsibilities for
the High Cost program and the Low Income program. The High Cost program
ensures that consumers in all regions of the nation have access to and pay rates for
telecommunications services that are reasonably comparable to those in urban
32
areas. The Low Income program, commonly known as Lifeline, provides discounts
that make local telephone service affordable to millions of low-income consumers.
In order for a carrier to receive funds from either of these programs, they have to be
designated as an eligible telecommunications carrier (“ETC”). The Commission has
the primary responsibility for designating carriers as ETCs.
Certification for ETC’s is required for High cost support. The Commission has
the primary responsibility to provide this annual certification to the Federal
Communications Commission and the Universal Service Administrative Company.
Certifications are due annually on or before October 1. The certification must state
that all federal High Cost support provided to rural and/or non-rural carriers and
competitive ETC’s within the state has been and will be used only for the provision,
maintenance, and upgrading of facilities and services for which the support is
intended.
On November 18, 2011, the FCC released FCC 11-161 Report and Order (“CAF
Order”) which comprehensively reformed the Universal Service Fund and will
transition High Cost mechanisms to the Connect America Fund (“CAF”). This
reform developed different avenues of support for price-cap carriers, rate of return
carriers, competitive local exchange carriers, and mobility fund carriers. The CAF
Order accelerates broadband build-out and expands the benefits of high-speed
Internet to rural America. This 751 page order has provided many challenges and
opportunities to carriers receiving Universal Service Support. Numerous appeals
have been filed which were consolidated in the 10th Circuit of the United States
Court of Appeals. There have been four reconsideration orders released and as
many clarifications. Many of the rural local exchange companies have expressed
concern regarding the uncertainty and unpredictability of the CAF order.
Mississippi’s ETC Docket 2005-AD-662 has been revised to reflect the CAF Order so
ETCs can comply with the FCC guidelines and Mississippi requirements.
33
Mississippi remains one of the largest national beneficiaries of monies allocated
from the federal High-Cost support under the federal Universal Service Fund
Support program. In 2011, Mississippi received over $245.6 million in High-Cost
Universal Service funding. These monies were utilized by ETCs to improve the
wireless and wireline network infrastructure in high cost areas of our state.
Mississippi would be unable to maintain basic telephone rates in rural areas at
rates comparable to those in more urban areas of the state without federal
Universal Service Support. In addition, Universal Service funding ensures that
Mississippians in all areas of the state are provided services, functionalities and
features comparable to those offered in urban areas.
Currently, there are 36 ETCs designated in Mississippi and eight of those are
low income only. These are comprised of LECs, CLECs and wireless companies.
Also, there has been one conditional ETC designated to participate in the Mobility
Phase I Auction 901 in September, 2012. The CAF Order offers other opportunities
where providers may seek conditional designation to participate in competitive
bidding. The Public Utilities Staff works in conjunction with the Commission to
designate ETCs and also reviews and certifies ETC planned Universal Service
expenditures. These actions ensure that monies received from federal Universal
Service Fund are being used in accordance with the guidelines set forth in the
Telecommunications Act of 1996.
ALLOCATION OF 311 NUMBER- In CC Docket 92-105, the FCC assigned the 5-1-1
code for access to traveler information services and gave approval for its use on July
21, 2000. In 2005, the FCC amended use of 5-1-1 to reflect the Safe, Accountable,
Flexible and Efficient Transportation Equity Act to implement “a national,
interoperable 5-1-1 system, along with a national traffic-information system that
includes a user-friendly, comprehensive website…” On May 8, 2009, the Mississippi
Transportation Commission (“MTC”) filed with the Commission a petition in Docket
2009-AD-222 requesting allocation of the 5-1-1 dialing code as the traveler
34
information services number for the State of Mississippi. In 2012, MTC
supplemented its petition with an executed vendor agreement and the Commission
approved the 5-1-1 code for implementation.
SUPPORT OF MISSISIPPI BROADBAND TASKFORCE - The Mississippi Public
Utilities Staff Director of Communications has served on Office of Governor
Mississippi Broadband Taskforce since mid-2009. In this position, this Staff has
supported the filing of two National Telecommunications and Information
Administration (“NTIA”) Broadband Mapping grants as well as the filing of both
Round 1 and Round 2 Broadband Technology Opportunities Program (“BTOP”)
applications. Mississippi has already received a $2 million two-year broadband
mapping grant and is currently vying for a five-year broadband mapping grant.
Mississippi had also been awarded a $70 million Round 2 BTOP award that will
provide enhanced public safety and emergency medical care through the broadband
utilization of Mississippi’s Wireless Information Network cellular towers.
CURRENT NUMBER OF WATER & SEWER UTILITIES - The Mississippi Public
Service Commission regulates 957 water and sewer utilities as follows:
Sewer Associations 37
Sewer Companies 142
Sewer Districts 34
Sewer Municipalities 34
Water Associations 497
Water Companies 44
Water Districts 44
Water Municipalities 125
WATER & SEWER
35
FILINGS – The Water and Sewer Division is responsible for the
investigation of all water and sewer related filings with the Commission for initial
certificates, supplemental certificates, facility certificates, sale and transfers, initial
rates and rate changes.
During this reporting period, there were 41 filings seeking initial,
supplemental, and facility certificates and sale and transfer filings. Of the 41 total
filings, the specific breakdown by type of utility was as follows:
Sewer Associations 1
Sewer Companies 10
Sewer Districts 3
Sewer Municipalities 0
Water Associations 15
Water Companies 4
Water Districts 1
Water Municipalities 7
There were 15 rate filings. The filings by type of utility were as follows:
Sewer Companies 2
Sewer Municipalities 3
Water Companies 1
Water Municipalities 8
Sewer Districts 1
The Water and Sewer Division actively investigated all aspects of the 56 total
filings made with the Commission. This investigation included: propounding data
requests, reviewing engineering plans and specifications, reviewing reports and
other documentation, conducting prehearing conferences, preparing pre-filed
testimony, presenting testimony before the Commission at formal hearings and
presenting recommendations to the Commission.
VIABILITY RECOMMENDATIONS - Pursuant to Miss. Code Ann., Section
43-35-504, the Water and Sewer Division reviewed and analyzed 40 water block
grant applications as well as made utility viability recommendations to the
36
Mississippi Development Authority. In addition, recommendations were made to
the Mississippi State Department of Health and to the Mississippi
Department of Environmental Quality.
AUDITS - Annual audits of certain regulated sewer companies that are connected
to regional utility authorities for wastewater treatment were performed by the
Division to ensure that these sewer companies were assessing the correct monthly
charges. The Division also determined the appropriate monthly charge to be
assessed for the upcoming year.
INSPECTIONS - The continued monitoring of utility systems and various
construction projects were performed by the Division throughout the reporting
period.
37
UTILITIES SUMMARIES
ELECTRIC, GAS & TELEPHONE UTILITY SUMMARIES 2011
38
E
LE
CT
RIC
UT
ILIT
IES
SU
MM
AR
Y 2
01
1
NU
MB
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AV
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AG
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367,4
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15,9
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0.0
838
$
490,0
87,9
28
$
C
OM
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RC
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62,8
83
4,9
85,4
10,0
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6,3
81
$
79,2
81
0.0
805
$
401,2
76,2
18
$
I
ND
US
TR
IAL
3,4
45
2,3
26,4
68,0
00
42,3
20
$
675,3
17
0.0
627
$
145,7
92,3
08
$
O
TH
ER
4,3
54
414,1
45,0
00
8,5
67
$
95,1
18
0.0
901
$
37,3
01,1
12
$
T
OT
AL
438,1
40
13,5
74,1
05,0
00
2,4
52
$
30,9
81
0.0
792
$
3,3
89,8
34,0
48
$
1,0
74,4
57,5
66
$
32%
MIS
SIS
SIP
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PO
WE
R C
OM
PA
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R
ES
IDE
NT
IAL
151,9
74
2,1
62,4
19,0
00
1,6
22
$
14,2
29
0.1
140
$
246,5
10,4
45
$
C
OM
ME
RC
IAL
33,1
89
2,8
70,7
14,0
00
7,9
32
$
86,4
96
0.0
917
$
263,2
55,6
62
$
I
ND
US
TR
IAL
498
4,5
86,3
56,0
00
553,7
18
$
9,2
09,5
50
0.0
601
$
275,7
51,7
41
$
O
TH
ER
107
38,6
83,0
00
64,9
12
$
361,5
23
0.1
796
$
6,9
45,5
73
$
T
OT
AL
185,7
68
9,6
58,1
72,0
00
4,2
66
$
51,9
91
0.0
821
$
3,8
33,2
11,3
64
$
792,4
63,4
21
$
21%
So
urc
e: F
ER
C F
OR
M 1
- Y
E 1
2/3
1/2
011
39
(S
OU
RC
E:
CO
MP
AN
Y A
NN
UA
L R
EP
OR
TS
)
As
of D
ecem
ber
31, 2011
Num
ber
of co
mpan
ies
report
ing:
6
Atm
os
Cente
rPoin
tM
S R
iver
Gas
Tum
linso
nW
alt
hall
Willm
ut
TOTALS
Pla
nt
(Intr
ast
ate
Only
)
Pla
nt in
Ser
vice
410,3
81,8
02
165,2
58,4
45
2,7
51,3
20
293,5
00
805,3
74
40,8
06,6
59
620,2
97,1
00
Cons
truc
tion
Work
in P
rogr
ess
3,6
23,6
41
1,8
39,4
65
00
00
5,4
63,1
06
Pla
nt A
cqui
sitio
n A
dju
stm
ent
7,9
77,9
71
00
00
07,9
77,9
71
Pla
nt H
eld for
Fut
ure
Use
6,9
55,6
72
00
00
06,9
55,6
72
Mat
eria
ls a
nd S
upplie
s674,8
00
175,3
78
37,2
91
00
500,1
75
1,3
87,6
44
Les
s:
D
epre
ciat
ion
and A
mort
izat
ion
Res
erve
s155,6
05,5
95
85,1
83,4
08
1,5
73,3
07
293,5
00
569,3
10
23,8
52,2
50
267,0
77,3
70
C
ont
ribut
ions
in A
id o
f C
ons
truc
tion
00
277,8
08
0204,7
97
0482,6
05
NE
T B
OO
K C
OS
TS
274,0
08,2
91
82,0
89,8
80
937,4
96
031,2
67
17,4
54,5
84
374,5
21,5
18
Revenues
and E
xpense
s (I
ntr
ast
ate
Only
)
Oper
atin
g R
even
ues
244,5
49,7
41
92,4
92,9
28
2,7
03,1
38
899,0
25
608,1
90
21,9
00,6
47
363,1
53,6
69
Dep
reci
atio
n an
d A
mort
izat
ion
Exp
ense
s13,3
63,6
12
5,0
23,3
36
198,1
51
20,7
31
17,2
35
1,2
20,8
06
19,8
43,8
71
Inco
me
Tax
es(2
,681,0
39)
(3,0
56,2
38)
010,6
73
5,3
77
(686,0
92)
(6,4
07,3
19)
Oth
er T
axes
23,1
00,6
64
10,4
04,7
90
112,6
74
4,8
25
21,8
62
1,4
75,2
38
35,1
20,0
53
Oth
er O
per
atin
g E
xpen
ses
191,2
75,6
21
75,1
26,5
30
2,4
67,5
73
756,0
00
554,4
71
19,1
19,1
36
289,2
99,3
31
T
ota
l Oper
atin
g E
xpen
ses
225,0
58,8
58
87,4
98,4
18
2,7
78,3
98
792,2
29
598,9
45
21,1
29,0
88
337,8
55,9
36
Net
Oper
atin
g In
com
e19,4
90,8
83
4,9
94,5
10
(75,2
60)
106,7
96
9,2
45
771,5
59
25,2
97,7
33
Oth
er I
ncom
e1,9
66,5
52
268,3
89
25,4
80
020,9
44
(385,1
10)
1,8
96,2
55
Oth
er D
educ
tions
(10,9
55,5
63)
(2,2
18,1
41)
(33,5
28)
0(3
)(1
54,9
03)
(13,3
62,1
38)
NE
T I
NC
OM
E10,5
01,8
72
3,0
44,7
58
(83,3
08)
106,7
96
30,1
86
231,5
46
13,8
31,8
50
Cust
om
ers
(In
trast
ate
Only
)
Yea
r-E
nd A
vera
ge:
Res
iden
tial
231,7
72
108,9
15
2,9
52
153
436
16,5
92
360,8
20
Com
mer
cial
23,9
53
12,3
63
246
61
170
2,8
30
39,6
23
Indus
tria
l376
36
34
010
429
Oth
ers
2,8
12
087
00
22,9
01
Tota
l Num
ber
of C
usto
mer
s258,9
13
121,3
14
3,2
88
218
606
19,4
34
403,7
73
Oth
er
Sta
tist
ics
(Intr
ast
ate
Only
)
Ave
rage
Ann
ual R
esid
entia
l Use
(M
CF
)59.4
751.9
945.1
737.2
741.7
549.9
347.6
0
Ave
rage
Res
iden
tial C
ost
per
MC
F (
$)
9.4
78.9
611.3
710.3
513.2
79.4
310.4
8
Ave
rage
Res
iden
tial M
ont
hly
Bill
46.9
238.8
142.8
132.1
446.1
739.2
441.0
2
Gro
ss P
lant
Inv
estm
ent per
Cus
tom
er1,5
85.0
21,3
62.2
4836.7
81,3
46.3
31,3
29.0
02,0
99.7
61,4
26.5
2
GA
S U
TIL
ITIE
S S
UM
MA
RY
20
11
40
CO
MP
AN
Y
NU
MB
ER
OF
MS
EX
CH
AN
GE
S
AC
CE
SS
LIN
ES
20
11
AC
CE
SS
LIN
ES
20
10
AC
CE
SS
LIN
E
GR
OW
TH
FR
OM
PR
EV
. Y
EA
R
GR
OS
S
PL
AN
T
IN S
ER
VIC
E
OP
ER
AT
ING
RE
VE
NU
E
OP
ER
AT
ING
EX
PE
NS
ES
NE
T R
EV
EN
UE
BP
M (
NO
XA
PA
TE
R)
17
35
77
6(4
1)
$3
,83
1,7
76
$1
,66
9,6
22
$1
,87
4,0
43
($2
04
,42
1)
BA
Y S
PR
ING
S1
28
,51
29
,00
0(4
88
)$
63
,36
2,9
58
$1
4,0
11
,32
8$
11
,81
7,4
84
$2
,19
3,8
44
BE
LL
SO
UT
H1
72
68
0,4
71
75
9,4
93
(79
,02
2)
$4
,66
1,3
10
,00
0$
94
0,9
24
,00
0$
75
7,8
62
,00
0$
18
3,0
62
,00
0
BR
UC
E1
2,0
90
2,2
25
(13
5)
$1
6,1
34
,74
0$
3,4
15
,77
2$
2,5
52
,96
6$
86
2,8
06
CA
LH
OU
N C
ITY
(T
DS
)3
2,7
11
2,8
59
(14
8)
$1
3,5
49
,56
8$
1,9
16
,97
0$
1,6
13
,81
8$
30
3,1
52
CE
NT
UR
YT
EL
OF A
DA
MS
VIL
LE
11
11
11
8(7
)$
38
,68
1,9
18
$5
,57
1,1
59
$5
,33
4,9
00
$2
36
,25
9
CE
NT
UR
YT
EL
OF N
OR
TH
MS
31
6,8
73
17
,77
1(8
98
)$
98
,53
3,4
80
$1
8,1
14
,18
0$
13
,08
3,5
19
$5
,03
0,6
61
DE
CA
TU
R1
1,7
09
1,8
58
(14
9)
$8
,40
9,2
53
$1
,21
6,0
87
$1
,62
7,9
21
($4
11
,83
4)
DE
LT
A7
2,7
56
3,0
59
(30
3)
$2
3,4
81
,22
6$
4,1
41
,79
3$
3,8
53
,08
5$
28
8,7
08
FR
AN
KL
IN1
06
,91
57
,09
6(1
81
)$
65
,22
4,9
42
$1
2,2
45
,17
0$
9,9
02
,61
8$
2,3
42
,55
2
FR
ON
TIE
R4
4,3
44
4,6
40
(29
6)
$2
2,3
69
,35
6$
4,5
80
,55
9$
2,4
54
,57
7$
2,1
25
,98
2
FU
LT
ON
46
,76
86
,93
3(1
65
)$
34
,35
2,2
43
$5
,98
9,7
44
$5
,86
3,2
27
$1
26
,51
7
GE
OR
GE
TO
WN
12
45
27
6(3
1)
$4
,16
1,4
29
$1
,46
8,0
30
$1
,24
0,5
09
$2
27
,52
1
LA
KE
SID
E1
24
32
65
(22
)$
4,7
27
,56
0$
1,1
58
,45
4$
1,0
79
,11
4$
79
,34
0
MO
UN
D B
AY
OU
16
15
68
0(6
5)
$3
,83
4,2
84
$1
,00
1,6
48
$8
25
,19
0$
17
6,4
58
MY
RT
LE
(T
DS
)1
58
26
18
(36
)$
3,3
17
,63
0$
57
4,3
29
$5
26
,38
4$
47
,94
5
SL
ED
GE
13
11
34
8(3
7)
$6
,92
8,9
41
$1
,43
2,5
70
$1
,23
7,2
83
$1
95
,28
7
SM
ITH
VIL
LE
15
88
70
4(1
16
)$
2,9
14
,12
1$
56
7,6
44
$6
68
,42
2($
10
0,7
78
)
SO
UT
HE
AS
T M
S (
TD
S)
42
,93
63
,10
2(1
66
)$
21
,08
9,6
63
$4
,08
8,2
28
$2
,94
0,4
76
$1
,14
7,7
52
WIN
DS
TR
EA
M3
10
,12
31
0,2
25
(10
2)
$4
1,5
98
,22
7$
9,3
46
,26
2$
6,4
94
,38
5$
2,8
51
,87
7
41
MISSISSIPPI PUBLIC UTILITIES STAFF
COMBINED STATEMENTS OF RECEIPTS AND DISBURSEMENTS
JULY 1, 2011 – JUNE 30, 2012
DISBURSEMENTS:
Salaries & Fringe Benefits $1,779,148
Travel 60,557
Contractual Services 242,606
Commodities 11,614
Capital Outlay Equipment 0
Subsidies, Loans, Grants 0
TOTAL OPERATING EXPENSES $2,093,925
Transfers 0
TOTAL DISBURSEMENTS $2,093,925
RECEIPTS:
Utility Regulatory Tax $2,519,275
Miscellaneous Receipts 319
TOTAL RECEIPTS: $2,519,594
AGENCY FINANCIAL REPORTS
42
MISSISSIPPI PUBLIC UTILITIES STAFF
OUT OF STATE TRAVEL
FISCAL YEAR 2012
Employee's Name Destination Purpose Costs
Tera Agee Destin, FL TASE 1504.73
Jennifer Boen Albuquerque, NM Utility Rate School 1422.38
Ron Brewer Baton Rouge, LA Audit 368.24
Donna Chandler Washington, DC NARUC 2619.91
Wendy Collins Albuquerque, NM Utility Rate School 1534.81
New Orleans, LA SEARUC 953.01
Michael Douglas Destin, FL TASE 1552.92
Chris Garbacz Los Angeles, CA NARUC 1603.93
St. Louis, MO NARUC 1035.73
Washington, DC NARUC 1694.68
Little Rock, AR Southwest Power Pool 893.39
Birmingham, AL Southern Company
Services
448.92
Hugh Green New Orleans, LA SEARUC 905.33
43
MISSISSIPPI PUBLIC UTILITIES STAFF
OUT OF STATE TRAVEL
FISCAL YEAR 2012
Employee's Name Destination Purpose Costs
Virden Jones Silver Springs, MD Law Seminar 1105.86
Washington, DC NARUC 1515.54
New Orleans, LA SEARUC 931.55
Charlie Lavender Atlanta, GA Solar Conference 401.12
Ginger Lynn Albuquerque, NM Utility Rate School 1581.30
New Orleans, LA SEARUC 954.49
Mike McCool Baton Rouge, LA Audit 385.74
Brandi Myrick Baton Rouge, LA LPSC-MISO 161.58
Atlanta, GA Solar Conference 405.10
Silver Springs, MD NRRI 673.20
New Orleans, LA SEARUC 592.38
Chad Reynolds Baton Rouge, LA LPSC-MISO 365.03
Atlanta, GA Solar Conference 845.66
Little Rock, AR Southwest Power Pool 405.28
Silver Springs, MD NRRI 782.96
44
MISSISSIPPI PUBLIC UTILITIES STAFF
OUT OF STATE TRAVEL
FISCAL YEAR 2012
Employee's Name Destination Purpose Costs
Washington, DC FERC Trial 1042.64
New Orleans, LA FERC 456.93
Austin, TX FERC 630.67
New Orleans, LA SEARUC 1015.34
Randy Tew San Destin, FL TASE 1542.25
Paige Wilkins New Orleans, LA SEARUC 793.72
