Miss. officials hold hearing on utility charges

That testimony came Thursday before the Mississippi Public Service Commission, which is investigating what it claims are excessive interest rates being charged by Mississippi Power and Entergy Corp. as part of the state's fuel adjustment policy.

Entergy provides power to 45 of Mississippi's 82 counties and operates regulated power utilities in Louisiana, Arkansas and Texas.

Southern Power Co.'s holdings include Alabama Power, Georgia Power, Gulf Power and Mississippi Power, which serves 23 counties in southeast Mississippi.

Commissioners have said they discovered the high interest rates during a July review of the fuel adjustment policy, which allows utilities to predict the price of the fuel they'll need to make electricity before actually buying it.

The policy forced customers to pay nearly $40 million too much for their utilities last year, the commissioners said. Customers eventually get that money back, but the commission has argued that they never should have paid that much in the first place.

The commission said it found that Entergy Mississippi is currently charging a 12.83 percent interest rate in its fuel adjustment, while Mississippi Power is charging 13.25 percent.

The prime lending rate has been around 4 to 5 percent in recent months.

Entergy didn't oppose dropping the rate Thursday, but Frances Turnage, treasurer and chief financial officer of Mississippi Power, testified that her company has to pay for coal in a timely manner to make electricity. And the prime interest rate would not be high enough to cover the cost of making those coal purchases.

"The company has to finance the business with capital," Turnage said. "We cannot finance the business with debt."