JACKSON, Miss. (AP) — Entergy Mississippi just can’t cut electrical rates fast enough to keep up with falling natural gas prices, and Mississippi Power Co. isn’t far behind.
The unit of New Orleans-based Entergy Corp. will cut rates by $102 million in coming months on its 442,000 Mississippi customers. For residential customers who use 1,000 kilowatts of electricity per month, bills would fall from $93 now to $82 a month in April. Then in July, such monthly bills would fall again to $80.
An additional rate cut because of lower natural gas prices also appears likely by Mississippi Power Co. In a February filing, the unit of Atlanta-based Southern Co. said its fuel costs are projected to be $62 million over what the company earlier forecast.
State law calls for privately owned utilities to recover their fuel costs without making a profit, but natural gas prices have repeatedly fallen below predictions. That led to a $46 million Entergy rate cut in September and then a $75 million cut in February. But the Public Service Commission ordered an additional look at predictions for the rest of 2016, because gas prices dipped again after Entergy and Mississippi Power filed their 2016 forecasts in November.
“Fuel prices — particularly the price of natural gas — can be volatile and difficult to predict over long periods,” Entergy Regulatory Affairs Manager Dorman Davis said in February testimony.
Entergy in February filed notice that it needed to lower again, and commissioners approved the move Tuesday.
“This commission is committed to making sure that customers only pay what is absolutely necessary for electricity,” said Commission Chairman Brandon Presley, a Nettleton Democrat.
Of the Entergy decreases, $68 million are refunds for amounts the utility over-collected to buy natural gas to fuel its power plants in recent months. The remaining $34 million stems from lower projections for the rest of 2016.
After the refunds are over, bills are likely to snap back in October to $91 a month. Entergy could also seek a rate increase this summer separate from fuel-price fluctuations.
Davis testified that the greatest reductions were stacked in summer months, when air-conditioning use causes electricity demand to peak in Mississippi. Entergy generates more than 40 percent of the electricity it sells in Mississippi from plants that burn natural gas.
Mississippi Power lowered rates last month on its 186,000 customers from Meridian to the Gulf Coast, and will collect $119 million less this year because of the cut. Combined with a decrease in rates paying for part of the $6.5 billion Kemper County power plant, typical residential bills fell to $125 a month from $144. The company hasn’t released estimates of by how much the new rate cut would decrease typical bills.
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