After recent columns questioning the need for what appears to be “dual regulation” of the state’s public utilities, Public Service Commissioners Brandon Presley and Lynn Posey both said that the current structure of public utility regulation in Mississippi  leaves the state’s elected commissioners in a difficult position.

Both Presley, who represents the state’s northern district, and Posey, who represents the central district, say that structural changes in state utility regulation in the late 1980s in the wake of a Public Service Commission (PSC) scandal has left modern-era commissioners with less staff than they need to conduct investigations like that being pursued by Attorney General Jim Hood against Entergy— in which Hood accuses the utility of buying fuel and power from other Entergy subsidiaries at a higher price than it could on the open market and then passing those costs along to customers.

In their standoff with Hood, Entergy has argued that the state PSC, not Hood, is charged with regulating public utilities in Mississippi and that the PSC has direct statutory authority to regulate Mississippi’s public utilities and to approve or deny rate hikes.

But both Presley and Posey say that it’s important that state rate payers understand that the PSC and the Public Service Commission staff — which is charged with auditing the financial records of public utilities and conducting “audits of electric and gas companies and purchased fuel and gas adjustments”— are two separate entities.

Presley and Posey are right in that the commissioners were much more powerful in terms of controlling the PSC staff before former seven-term Northern District Commissioner D. W. Snyder of Eupora was convicted of a total of ten counts of extortion, filing false tax returns, bribery, and conspiracy charges back in 1989.

Snyder was convicted of extorting money from two independent telephone companies and a trucking firm regulated by the Commission. Snyder contended that this money consisted of voluntary campaign contributions. He was also convicted in a complicated bribery scheme in which Snyder arranged for the PSC’s approval of a company’s rate increase if the company would agree to business transactions favorable to Snyder and his coconspirators.

Snyder was also convicted of accepting money directly in exchange for influencing the PSC’s official actions and of failing to report as income the money he received through extortion and bribery.

In reaction to that scandal, the Legislature in 1990 passed Senate Bill 2679, which mandated a reorganization of the Public Utilities Staff. The “old” Public Utilities Staff was abolished and the “new”” Public Utilities Staff was established as a completely separate and independent entity from the elected PSC and its now much smaller, weaker staff. 

Under the new law, the governor appoints the executive director of the Public Utilities Staff to a six-year term, not the commissioners, and that director hires all Public Utilities personnel.

In the wake of the Entergy probe by Hood, Posey said: ““We have no one on the staff capable of analyzing this information.”

While Presley and Posey were both careful not to say anything disparaging about the Public Utilities Staff, it was clear that both shared a certain level of frustration that while the PSC is charged with regulating public utilities in Mississippi, the investigative power rests with the Public Utilities Staff over which the commissioners don’t have authority.

But those frustrations aside, it seems strange that public utility rates would be approved by the commissioners on recommendation of the Public Utilities Staff — yet at the end of the day both entities would need Hood’s office to perform the heavy lifting of a substantial investigation into utility price gouging allegations.

(Contact Perspective Editor Sid Salter at (601) 961-7084 or e-mail ssalter@clarionledger.com. Visit his blog at clarionledger.com.)