Georgia’s PSC is in the game. Mississippi’s been benched.

The Public Service Commission’s (PSC’s) job is to protect small customers from big monopolies.  Entergy Mississippi is part of Entergy Corporation.  It’s a big electricity monopoly with utility subs in four states. It’s a government granted and government protected monopoly.

Home owners and renters and small business are small customers.  PSC’s are regulators empowered by state legislatures.  In Mississippi, the PSC is supposed to assure small customers reliable, affordable electricity.  The current PSC is trying.  Some past PSC’s, not so much.

The PSC has three commissioners who represent different parts of the state and are elected to serve four-year terms.  The current commissioners are independent and are trying to protect small customers.  That’s probably why they’ve been benched.

Who benched them?  The Governor encouraged the Legislature to neuter the PSC to get Amazon to invest $10 billion in Mississippi and build two data centers here.  What did the Governor and the Legislature do?  Here are some of the concessions they made to Amazon.

• The PSC cannot change what Entergy MS and Amazon agree to – even if it harms other customers.
• Entergy MS’s costs to build plants, generate, and transmit power are exempt from competitive bidding.
• Current 4% annual cost increase cap in Entergy’s Formula Rate Plan is removed. So there are no limits on Entergy’s annual rate increases related to the Amazon project.
• Entergy may begin construction prior to government permits and approvals.
• Costs incurred prior to approvals are deemed “used and useful” regardless of subsequent reviews. The PSC’s historic used and useful test to determine if costs are prudent and can be included in the rate base is moot.

Rates for small customers have risen in other states with data centers.  They are likely to rise more in Mississippi because these concessions make the “data center effect” worse. What is the data center effect?  It’s making small customers pay for part of the huge investments utilities make to provide power to data centers even though small customers don’t need or use the power.  “That’s not fair,” you say.  You are right, but it’s profitable for utilities like Entergy.  And it’s a sweetheart deal for Amazon because those customers pick up part of the tab for its power.

Mississippi may be the poster child for the worst data center effect in the country.  Why?  Because the Governor and the Legislature have given Entergy MS a blank check that the PSC can only audit and that small customers must cash.

The way utilities make money is to spend money on power plants, transmission lines, substations, and other infrastructure.  The more they spend, the more they make because they get a government-guaranteed 10.5%+ return (profit) on their approved investments.

Entergy Corporation borrows some of the cost of its investments at lower rates to leverage its return on equity (shareholders’ capital).  It was 11.6% in 2024.  Pension funds like to invest in utilities .  They have predictable high returns, safe dividends, and no competition.

Entergy MS is a government-juiced monopoly – thanks to the Governor and the Legislature.  Its returns related to investments for Amazon’s data centers are likely to be higher than Entergy Corp’s other subs.  They may be the highest of any utility in the country.  (Some record for the poorest state.)  Let’s see why.

In a nutshell, the why is: Entergy MS  gets a guaranteed return on all its investments related to Amazon – whether they are approved or not.  The PSC has been benched.  So with no officials in the game, will Entergy MS cheat?  Mississippi utilities have cheated before.

Remember Mississippi Power’s Kemper County Lignite boondoggle?  It was supposed to turn low-grade coal into synthetic natural gas to generate electricity. It too was championed by a Mississippi Governor.  It was supposed to cost $1.6 billion.  The PSC, beholden to the Governor, threw no penalty flags while the company lied and its cost ballooned to $7 billion.

Mississippi Power finally gave up on turning lignite into synthetic natural gas and paid for most of the plant cost.  But the PSC stuck residential customers with a 17% rate increase anyway to modify the plant’s turbines to run on natural gas and generate electricity that wasn’t needed in the first place.

So yes, with Mississippi’s PSC benched and prohibited from approving costs, Entergy MS might be tempted to cheat – because the more it spends, the more it makes.  How might it cheat?

• It has blanket immunity for whatever it does under its agreement with Amazon, even if it harms other customers.
• Its construction cost for plants, transmission lines, substations, etc., are exempt from competitive bidding. No competition to keep contractors honest.
• Current 4% annual cost increase cap is removed. No limits on rate increases related to Amazon for small customers.
• It can begin construction without waiting for permits and approvals. (That may make sense to save time because state and local permits can take forever.)
• But the PSC can only review those costs. They are deemed prudent and go into the rate base.  So haste can make waste that’s profitable for Entergy.

In contrast to Mississippi, Georgia’s PSC has moved to protect residential customers from Georgia’s data center boom. Early this year, it approved new rules requiring data centers to pay for generation, transmission, and distribution costs incurred to serve them.  It will freeze rate increases for three years.  Georgia’s Legislature has moved to plug loopholes in PSC rules that could permit Georgia Power to pass data centers’ expenses onto residential and small business customers.  Their rates have increased 37% in the past two years.

Hello Mississippi Legislators.  The voters who elected you include homeowners, renters, small business owners and employees.  They are facing Tsunamis of rate increases. You are the cause.

When the rate increases hit, your constituents may look at Georgia’s 37% and think: “Hold my beer – while I replace my legislator with one who cares about me.”