On Tuesday, the Mississippi Public Service Commission voted to eliminate the monthly Hurricane Katrina restoration charge from Mississippi Power customers’ bills.
The storm caused $300 million worth of damage to the company’s infrastructure, according to a Public Service Commission press release. Federal Community Development Block Grants and insurance covered most of the loss. However, the $121 million in remaining damages were distributed to Mississippi Power customers at a rate of $3.45 per month for 12 years through the Hurricane Katrina Electric Utility Customer Relief and Electric Utility Restoration Act of 2006 passed in the Mississippi Legislature, the release states.
Mississippi Power approached the PSC about two years ahead of schedule this week to request the charge be removed from customer’s bills, Mississippi Power Spokesman Jeff Shepard said.
“It basically closed the book on the Hurricane Katrina recovery process,” Shepard said.
The company was able to pay back the funds early because the number of Mississippi Power customers increased, including homeowners, small businesses and larger industries, Shepard said.
“Mississippians have seen the effects of Katrina since its landfall in 2005,” Southern District Commissioner Sam Britton said in the release. “I’m happy to see this charge removed and moving forward to continue to put the devastating impact of Katrina behind us.”
The $3.45 charge equated to an extra $41.40 per year that each of the now more than 186,000 customers paid to the Katrina Recovery fund.
“Entergy Mississippi also had a similar charge for their customers,” but paid it off in recent years, Shepard said.
He said the decision to spread the charge over 12 years was to prevent the storm from having a larger impact on both the company and its customers.
“Following the storm, Mississippi Power had the privilege of working with state and federal leaders, the Mississippi Bond Commission, the Mississippi Public Service Commission and our legislature to come up with a reasonable plan to avoid an extreme rate increase that would have otherwise impacted our customers,” Mississippi Power President and CEO Anthony Wilson said in a company press release.
Shepard said removal of the charge took effect on Wednesday.