Mississippi Power customers are seeing a rate reduction starting with their February electric bill, thanks to lower energy costs.
The average residential customer will save about $4.14 a month this year, the company said, a 3 percent reduction. Last year, there was an 4.5 percent increase.
Earlier this month, the Mississippi Public Service Commission approved the utility’s fuel filing, which is an annual adjustment based on the cost of fuel, such as natural gas.
“Mississippi Power will continue to take advantage of lower fuel costs — and reliably and efficiently operate our generating units — to benefit our customers,” said president and CEO Anthony Wilson.
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The SEC adjusts the company’s fuel rates each year. Last year, the adjustment increased by 4.5 percent on $8.1 million in under-recovered energy costs. The cost is estimated well in advance each year, and the utility does not earn a profit on fuel costs.
Over the last five years, fuel costs are down $75 million, the company said. Average residential customers are paying $6 less per month than they were in 2014 and essentially the same rates for electricity as in 2009, according to Mississippi Power.
The company has 188,000 customers across 23 counties in southeast Mississippi.
The PSC regulates the performance, but not the rates, of two other companies that provide electricity to South Mississippi homes and businesses — Coast Electric Power Association and Singing River Electric Cooperative.
Last year, Coast Electric, an electric cooperative with 80,000 members, began making fuel cost adjustments twice a year instead of once, said April Lollar, director of communications.
“Even though we may only have a couple of days of freezing temperatures in the winter, the high demand for electricity on those days affects power costs,” she said. Costs are averaged in November for the fall and winter and in April for spring and summer, she said, and bills tend to be slightly higher in the winter.
Singing River Electric, the second largest cooperative in the state with 70,500 members, completes cost of service studies to determine rates, said public relations manager Lorri Freeman. Those rate are then approved by the board of directors, who are members of the co-op and the community.
Wholesale power costs make up 75 percent of electricity costs, Freeman said. “Most times when rates are raised or lowered, it is due to wholesale power cost fluctuations,” she said. Regulatory and environmental adjustments also are factored into the cost of service, as show by the residential rate calculator.