Chamber backs energy-construction bill|[02/27/08]

Published 12:00 am Wednesday, February 27, 2008

Changes in state law pending in the Legislature to authorize state utility regulators to allow energy companies to charge customers for construction costs as facilities are built gained a measure of local support this morning.

The Vicksburg Warren Chamber of Commerce stated its support for the legislation following a round of meetings. If passed, the law will enable a competitive, affordable and reliable utility system that will promote economic development, a release from the Chamber said.

“The bill needs to go through,” said Chamber president, Christi Kilroy. “Warren County, in particular, has a lot to gain with the possibility of another reactor being built in Claiborne County.”

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The Board of Mayor and Aldermen was also to draft a resolution in support of the bills in a special called meeting planned for this afternoon.

Promoted by supporters as a “pay-as-you-go” approach to financing public utility expansion costs, the Senate version of the bill has passed and will be considered by the House, which has also passed through committee and awaits consideration.

Currently, utilities cannot collect construction costs from ratepayers until after a new facility is operating. At that point, approval for such a fee must come from the Public Service Commission. If passed, the bill would let the PSC permit the pass-through as an ongoing expense and allow utilities to avoid any financing charges that would be incurred and also passed along, later, to consumers.

Entergy, a chief proponent of the plan, is applying for licensing to build a second reactor at the Grand Gulf Nuclear Station with the NuStart consortium. Approval by the U.S. Nuclear Regulatory Commission is needed, a process expected to take several years while Entergy mulls a decision on whether to build it. For the existing Grand Gulf Nuclear Station, interest charges incurred during the 12-year construction process were the largest single item in the $3 billion total.

A rate increase of 1 percent might be asked of the PSC to help defray the cost of construction if Entergy moves ahead with building it, CEO Carolyn Shanks said Monday.

The three-member PSC, elected in northern, central and southern districts of the state, has not indicated definitively how it would vote on the matter if granted the authority by the Legislature.

Entergy and most other utilities have long-term deals with the state under which base rates are approved by the panel, but fluctuations in costs of generating power due to fuel prices can be adjusted by the companies without regulatory permission being sought in advance.