Entergy proposes subtracting more of rate hike|[08/14/2008]
Published 12:00 am Thursday, August 14, 2008
Falling natural gas prices have resulted in Entergy Mississippi considering further reductions of increases first added to customer bills last month, company officials said Wednesday.
The decrease would remove about one-third of the increase Entergy imposed in its 28 percent fuel cost adjustment increase in July.
The utility serving most of Warren County says it will propose doubling to 9.6 percent the decrease already planned for September bills, subject to approval by the Mississippi Public Service Commission. If approved, the cut will trim the average ratepayer’s increase to about $17 per 1,000 kilowatt hours instead of the $30 per kilowatt hour increase that will remain in effect for power metered through Aug. 28.
In the interim, PSC guidelines will dictate a fourth-quarter fuel adjustment calculation by Friday, 45 days before the effective date of any change.
Last week, Entergy announced a 5 percent reduction in the next adjustment, with the savings coming from less expensive natural gas. The utility purchases the fossil fuel to fire boilers that spin generators to make about half the power the company sells.
Entergy acknowledged changing market conditions for natural gas, which is used to generate electricity at its plants such as the Baxter Wilson Plant in Vicksburg, might make mid-quarter rate adjustments more common, but may require continuing evaluation.
The company’s third-quarter fuel adjustment filed in mid-May projected natural gas prices to average $10 per 10,000 million British thermal units, or mmBtu, for the third quarter. In July, prices climbed to nearly $14 per mmBtu before falling to about $8 per mmBtu Wednesday, prompting the 5 percent decrease and Wednesday’s doubling of it to 9.6 percent.
Natural gas prices hovered at about $8.42 per mmBtu on the New York Mercantile Exchange this morning.
“Even with this recent drop in fuel prices, our nation and our state remain in the midst of an energy crisis,” said president and CEO Haley Fisackerly. “Entergy Mississippi will continue to work with our national and state leaders to explore responsible solutions to our nation’s energy problems that will benefit Mississippians.”
Entergy Mississippi, a subsidiary of New Orleans-based Entergy Corp., provides electricity for 433,000 customers in 45 Mississippi counties. Its customer base of 2.6 million includes Mississippi, Louisiana, Arkansas and Texas.