PSC investigating whether municipal authority illegally raising rates

By NIKKI ROWELL,

The Mississippi Public Service Commission (MPSC) is looking into whether or not Canton Municipal Utilities (CMU) illegally raised their rates without MPSC approval.

“Currently, Canton has increased water and gas rates without permission and charged those to customers outside of one mile (of the city of Canton),” said Central District Commissioner Cecil Brown.

The commission’s jurisdiction is over a municipal utility system beyond one mile from the city limits.

CMU provides gas, sewer and water to Lake Caroline, Gluckstadt and other south Madison communities.

Their next step will be to determine if the rates were justified or reasonable.

MPSC is also investigating the CMU routine transfer of surplus revenues in its utility fund generated by the unapproved rates to the city of Canton’s general municipal fund for non-utility services, as well as the Canton Redevelopment Authority.

Brown said the investigation is ongoing. However, he expects to find that the rate changes were justified, just not done through proper protocol.

The last time the commission approved a CMU tariff for gas and water service was on February 7, 1994. However, CMU raised rates for its gas service customers without approval in August 2009. Rates were raised for water services without commission approval October 2012.

In addition, CMU routinely transferred surplus revenues in its utility fund generated by the unapproved rates charged to those within the commission’s jurisdiction to the Canton general municipal fund for non-utility services and the Canton Redevelopment Authority.

The commission granted temporary approval for the increased rates on January 30, 2017.

So, now CMU must provide a detailed accounting of the total amount of unapproved rates charged to customers within the commission’s jurisdiction for the time period between the illegal rate change to January 30, 2017.

Brown anticipates that the commission will approve the new rates permanently.

“I think we’re going to find the rates are justified,” Brown said. “That’s the way it looks right now. We are not intending to penalize anybody. As long as they comply and work with us, we are not trying to hurt any utility or municipality.”

He said the commission does not intend to penalize the city for a mistake.

“It is not looking like anything other than oversight,” Brown said.

Brown went on to say that they will also need to determine if CMU charged rates in excess, and if so, the commission will have to determine how to remedy that situation.

“Then we will determine whether or not they were excess monies that were transferred,” he said.

However, Brown said the commission does not have any authority over the city of Canton, so there is no way to tell the city they have to pay them back.

“CMU has been very cooperative, and we have had no problem getting information,” Brown said. “It has taken some time because of personnel changes, but we are close to resolving it all.”

The Public Service Commission regulates telecommunications, electric, gas, water and sewer utilities. The agency is charged with assuring that rates and charges for services are just and reasonable.

CMU is assigned certificated areas for water, sewer, natural gas and electricity. However, these proceedings do not include electricity.

The illegal rate changes were discovered by the commission in January 2016. Brown said they discovered this was happening all over the state when they asked each municipality when they last raised rates and compared with the last time rates were approved by the Public Service Commission.

“A substantial number did not have rates approved,” he said. “We have been working for three and a half years now with cities all over the state to get in compliance with state law.”

Brown added that this particular situation is difficult, as Canton is larger than most of the other municipalities they are dealing with.

“They have also had some turnover in personnel and legal staff,” he said.

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