Entergy pushing for flexibility in plant construction costs recoup
Local representatives of Entergy Mississippi, Inc. are pushingfor the passage of legislation that they say will help customerssave money on their electric bills in the long run if a new powerplant is constructed.
“For generations, Mississippians have enjoyed the comforts andconveniences of affordable electricity,” said Kenny Goza, customeraccount manager for Entergy Mississippi in Brookhaven. “But theworld is rapidly changing. And so is the availability – andaffordability – of electrical power.”
Technology is becoming more of a way of life, Goza said, and itis directly fueled by natural gas. This can put a crunch on peoplewhen it comes time to pay the electric bill.
“Families are enjoying more electrical products, such aslarge-screen televisions and computers, and new and expandingbusinesses are requiring much more energy to power theirequipment,” he said. “Combine that with rising prices on naturalgas, which is used to produce more than half of the electricity inMississippi, and environmental issues such as global warming, andyou are looking at a very challenging situation.”
House Bill 1274 and Senate Bill 2793 would offer opportunitiesto build new sources of
generation such as a nuclear plant or a clean coal power plant,Goza said. The bills also address options to fund the projects thatwould greatly reduce the cost.
Part of those options would be to allow customers to pay ontheir bills as the construction goes on, which Goza said would bean easier way to distribute the financial burden in recouping costsof the development. As the law currently stands, such costsaccumulate until the plant begins production, and customers assumeall construction costs at once, resulting in significant increasesin monthly bills.
“A plant could cost somewhere around $3 to 5 billion. This isnot raising any rates at this point, but it would allow us to beginrecovering costs as we go,” he said. “This way you’re not payingall the interest costs at the end.”
Goza said the Mississippi Public Service Commission woulddetermine what the justifiable and prudent cost to customers wouldbe throughout the construction, if permission is granted to build anuclear or clean coal power plant.
The bill does not grant approval for a utility to build a newplant, nor does it set or increase rates to utility customers forsuch plants, Goza said. Rather, it authorizes the MississippiPublic Service Commission to make these decisions.
“While we have not made a definite decision to add a new plant,an important point to remember is that it has been more than 20years since Entergy Mississippi has built a baseload generatingfacility – the kind that helps us meet Mississippi’s basicelectrical needs,” said Goza. “During that time, we have workedhard to keep our base rates at mid-1980 levels. Meanwhile, ourgeneration fleet has continued to age.”
If Entergy Mississippi does construct a new nuclear plant, theproposed legislation would help the company to capitalize onfederal incentives for the construction of such facilities. Similarlegislation and regulations supporting new nuclear plantconstruction have passed or are being considered in several states,including Florida, Georgia, Louisiana, North Carolina and SouthCarolina.