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PSC: Tough questions on rate hike

By By Sheila Blackmon/The Meridian Star
Nov. 8, 2001
JACKSON If Public Service commissioners' remarks in a public hearing that began Wednesday are any indication, Mississippi Power's battle to increase profit margins could be as difficult as its fight to raise rates.
Mississippi Power filed a petition for a 9.5 percent rate increase with the Mississippi Public Service Commission in August. Commissioners will approve or deny the rate increase proposal after reviewing information from public hearings scheduled through Friday.
Another major component of the request is that the company be allowed to increase its profit margin called a rate of return from the 11.74 percent earned in 2000 to 13.25 percent.
But under current PSC regulations, Mississippi Power would then have the authority to increase that profit margin another percent by meeting certain performance standards.
Defending the increase
When Ed Blakeslee, vice president of Customer Service and Retail Marketing for Mississippi Power, confirmed the request for 13.25 percent in testimony, Southern District Commissioner Michael Callahan's response was, "And you can sleep at night saying that number?"
Central District Commissioner Nielsen Cochran commented on Blakeslee's ability to "keep a straight face." Blakeslee said if Mississippi Power doesn't have access to capital, it won't be able to provide the same services.
Attorneys representing organizations opposing the increase spent Wednesday questioning Blakeslee and two other Mississippi Power witnesses.
Bad news for manufacturers
Wilson Montjoy, an attorney representing the Mississippi Manufacturers Association, said MMA members are concerned about the financial impact of a 9.5 percent power rate increase on operations.
Since January 2000, he said, 82 Mississippi plants have closed for a total loss of about 11,000 jobs. He said prices are stable or declining while operating costs are rising, and manufacturers, unlike utility companies, can't pass their rising costs down to customers without the risk of losing them.
Sheila Blackmon is a staff writer for The Meridian Star. Call her at 693-1551, ext. 3275, or e-mail her at sblackmon@themeridianstar.com.
Witnesses:
Expected to take the stand today and Friday in the rate case hearing:
Mississippi Power Company
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