Last week, Entergy had a press conference celebrating their plans to spend an additional $300 million in electrical grid upgrades on top of the $600 million it recently spent. That’s $900 million total.
I certainly understand why Entergy would want to be celebrating. It runs a cost plus business. The more it spends, the more it makes. Whether Entergy’s 385,000 residential customers and 74,000 business customers should be celebrating is a horse of a different color.
That’s because the customers will be paying for this $900 million grid upgrade. That comes out to about $2,000 per customer.
Personally, I would have preferred to put my $2,000 toward a natural gas backup generator.
All of these grid upgrades come conspicuously close to the new huge data centers being built that will double the amount of electricity consumed on the Entergy Mississippi grid. Think about that: The Amazon data center in Madison and the proposed data center in Rankin County will consume as much electricity as the whole rest of the grid. It’s a planned investment of over $20 billion.
The $900 million in grid improvements is just the start. Entergy Mississippi is planning $4 billion in new generating plants. That’ll cost its customers an additional $9,000 or so dollars apiece.
Entergy Mississippi executives say, with a straight face, that all this will not cost its existing customers any money. And if you believe that, I have some swampland in Florida to sell you.
Entergy says Amazon will be paying for all of this, which would be wonderful if it was true. How do we know its not true? For starters, Entergy won’t release the amount of money Amazon will be paying for its electricity. The rate is a “trade secret” thanks to Senate Bill 2001, passed by our state legislators and signed by our governor.
So let’s cut the bull and all admit that we have no idea how much of these billions of dollars in Entergy spending is going to be paid by Amazon versus existing customers.
If you are an Entergy Mississippi customer and have enough wealth to invest in stocks, I suggest a simple solution: Hedge your impending skyrocketing electricity bills by buying Entergy stock. Unfortunately, if you’ve waited until now (like me), you’re late to the party. Entergy stock is already up 60 percent over the last year. That’s a good indication of what’s about to happen to Entergy customers.
What’s grossly unfair is what’s going to happen to the 20 percent of Entergy customers living in poverty.
These people, indeed all Mississippians, rely on the Mississippi government to protect them from monopolies. But their government has dropped the ball, going ga-ga over a massive warehouse of computer servers.
Senate Bill 2001 turned a government sanctioned regulated monopoly into a government sanctioned unregulated monopoly. You couldn’t dream up a worse public policy. It’s misguided actions like this that keep our state at the bottom.
If the government of Mississippi is not going to regulate its monopolies then at least open up the energy markets to competition as New Hampshire just did last month.
The Wall Street Journal reported:
“New Hampshire recently approved an elegant solution: Let anyone build. In August Gov. Kelly Ayotte signed HB 672, which minimizes red tape for electricity providers that don’t connect to the existing grid, thus bringing more competition, speed and innovation to the state. In the spirit of reducing bureaucracy, the bill itself fits neatly on one page.
“Off-grid electricity providers in New Hampshire will no longer be subject to public-utility regulation. This means they are free to develop projects, operate or enter into commercial agreements without going hat in hand to state bureaucrats. “New Hampshire welcomes entrepreneurship and innovation in energy,” says state Rep. Michael Vose, who sponsored HB 672. Recent analysis suggests regulatory hurdles can add anywhere from one to five years to projects.
“Welcoming new suppliers means inviting more people with ideas for tackling electricity challenges. Picture a local utility generating power via gas, solar or even a small modular nuclear reactor and delivering it directly to customers, including data centers and other industrial facilities. New suppliers can start projects unencumbered by decades of heavily regulated business practices. Off-grid suppliers can consider innovation in all aspects of the business, beyond the usual choice of generation types.”
I’m not against regulated monopolies, but I am absolutely opposed to unregulated, government sanctioned monopolies, which is what we’ve now got.
If the government doesn’t want to do the meticulous, time consuming work of regulating monopoly electricity rates, then end the government sanctioned monopolies and let the free enterprise system work.
Senate Bill 2001 kneecapped the Mississippi Public Service Commission and its decades of laws and procedures to regulate electricity rates and protect consumers. Bamboozled by a false sense of urgency, lawmakers passed the 350-page bill in a two-day special session. Any bets as to how many legislators actually read the bill?
I have read it. Section 22, just nine pages long, eviscerates the PSC, allowing Entergy to start charging customers before new infrastructure is even put in place, allows no bid contracts, allows secret rates, unlimited expansion of the Amazon data center, wipes out rate increase limitations. I urge every literate Entergy Mississippi ratepayer to download Senate Bill 2001 and read section 22.
Bigger Pie chairman Kelley Williams last week spoke before the PSC in a full-day “PSC Grid Summit.” He compared the Amazon data center Entergy deal to a shell game. You can read a summary of his remarks at northsidesun.com. Just search for Kelley Williams.
As the Magnolia Tribune reported:
At issue, Williams said, is the legislation passed during a special session which stripped the PSC of oversight powers and greenlighted unlimited spending for Entergy while subsidizing Amazon’s Madison County data center projects.
“This is a secret deal for one of the largest companies in the world and enriches shareholders of one of the largest electric utilities in the country,” Williams said.
