JACKSON, Miss. (AP) -- Entergy Corp. customers in Mississippi will pay $22.3 million more over the next nine months, as the company recoups more for expenses.
The increase was approved unanimously Tuesday by the Mississippi Public Service Commission.
The rate increase would mean an additional $2.71 a month for residential customers using 1,000 kilowatt hours, with a bill for that amount of power rising to $102.83. Federal Energy Information Administration figures show the average Entergy Mississippi customer uses about 1,300 kilowatt hours per month, though. At that level, the average customer will now pay $133.68 a month, Entergy said.
It's the third rate increase in a year for Entergy Mississippi. In December, the PSC approved one to cover higher natural gas costs and the purchase of a Jackson power plant. In January, commissioners approved an increase to buy part of the Grand Gulf nuclear plant from sister company Entergy Arkansas.
Combined, the three increases have budged Entergy's rates up from the ultra-low costs it was charging as recently as 2011, when electricity cost residential customers 8.38 cents per kilowatt-hour, according to EIA figures. After the current increase, that amount will have risen nearly 23 percent to 10.28 cents. Some of that increase is also attributable to a rise in natural gas costs.
The current rate increase was triggered because Entergy's return on equity, a measure of profit, fell to 8.96 percent in 2012. Under a rate formula, Entergy is allowed to earn a return on equity in a band between 9.76 percent and 11.83 percent. Inside that band, the company gets a boost for performance based on its prices compared to other regional utilities, electrical reliability and customer satisfaction, and Tuesday's action is supposed to boost return to 10.59 percent, said Entergy Mississippi senior counsel Jeremy Vanderloo.
Entergy has operated under a formula rate plan since 1994. This is the first time since 2009 that the company will raise rates because of the formula. The company had initially sought an increase of $37 million, but agreed to a lower amount after negotiations with the Public Utilities Staff.
Officials said the increase had been driven by increasing expenses, including $500 million that Entergy Mississippi has spent on transmission and distribution projects in the last four years. The PSC had pushed Entergy to spend more money on transmission. Another factor, said Wendy Collins of the Public Utilities Staff, was higher pension costs.
"Even with this small increase we're looking at today, we're still way below the national average," said Central District Commissioner Lynn Posey, a Republican.
Entergy says its Mississippi rates will still be about 12 percent lower than the national average after the increase.
Based in New Orleans, Entergy Corp. serves 437,000 customers in 45 counties in Mississippi's western half.
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