City backs utility expansion legislation|[02/28/08]
Published 12:00 am Thursday, February 28, 2008
City officials showed their support Wednesday for an energy bill that could change state law to allow “pay-as-you-go” financing on public utility expansion costs, Mayor Laurence Leyens said this morning.
“We are really trying to rally and are calling on our representatives to get this into law,” he said.
If passed, the law could be a factor in how Entergy, a chief proponent of the plan, will collect if the company decides to build a second reactor at the Grand Gulf Nuclear Station with the NuStart consortium.
Entergy is currently applying for licensing to build the reactor at the site, pending approval by the U.S. Nuclear Regulatory Commission, a process expected to take several years. Entergy and most other utilities have long-term deals with the state where base rates are approved by the panel, but fluctuations in costs can be adjusted by the companies without regulatory permission.
The Senate version of the bill has passed and was expected to be considered by the House as early as today. If passed in the Legislature, the bill would change state law to authorize state utility regulators to allow energy companies to charge customers for construction costs as facilities are built.
Under current law, utilities can’t collect construction costs from ratepayers until a new facility begins operating. The Public Service Commission, then, approves a fee.
The proposed bill, however, would allow the commission to permit the pass-through as an ongoing expense and allow utilities to avoid finance charges that would be incurred and passed to consumers.
Sen. Briggs Hopson III, R-Vicksburg, said he had voted for an amendment to the bill that would force public utility companies to repay ratepayers in case the plant shuts down. Although the amendment didn’t pass, Hopson said he was pleased with the bill overall.
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.
Rep. George Flaggs, a Democrat, said he would also vote in favor of the energy bill.
“I plan to vote on anything that will help the utility companies out,” he said. “Energy is so necessary this day and time.”
Rep. Alex Monsour could not be reached this morning.
The Vicksburg-Warren County Chamber of Commerce on Wednesday drafted a resolution stating its support for the legislation, which centered on the proposed law’s ability to promote economic development and allow a competitive, affordable and reliable utility system.
Leyens said, if the law passes and Entergy moves forward on its second reactor, 3,500 jobs could move into the area. It could also save money in the end, he added.
“We want to charge customers as they build,” he said. “That could save $1 billion in interest, which allows (us) to justify the investment.”