(Photo from Commissioner Chris Brown on Facebook)
- “We’ve never been here before,” said Northern District PSC Commissioner Chris Brown. “This is all history for the state of Mississippi.”
The Mississippi Public Service Commission voted unanimously Thursday to place Holly Springs Public Utility in receivership after years of customer complaints about prolonged power outages, millions of dollars of debt, and failing to heed warnings from the commission.
By going into receivership, a chancery court judge will determine the future of the utility’s operations. Options outlined by the commission included being placed for sale, becoming a cooperative model, or eminent domain.
“It’s time to turn the corner, you cannot kick the can down the road,” said Northern District Commissioner Chris Brown, the PSC’s chairman.
Holly Springs officials, including the mayor and head of the utility, were required to attend Thursday’s meeting after a 75-page report commissioned by the PSC found the utility was plagued with numerous deficiencies, from safety to financial shortfalls. The report stated that the system suffers from “decades of neglect.”
The report did not sugarcoat the issues at hand for the utility, saying the billing system is in “chaos” and describing the metering system as being in a “death spiral.”
During the meeting’s public comment portion, customers told of $600 to $800 monthly bills and not receiving a bill for months at a time.
The PSC report also detailed how the electric division of the utility does not adhere to basic safety functions, such as trimming trees and general maintenance, including no lockout/tag out procedure when equipment is broken.
A customer who said he is a retired electrical engineer called the utility’s safety practices “gross negligence.”
The report shows that the utility has not completed an audit in several years. The utility’s attorney explained that HSPU is audited with the city, and Holly Springs has not had one since the early 2020s.
The investigation, conducted by Silverpoint, found the utility is tens of millions of dollars in debt. It owes its electricity provider, the Tennessee Valley Authority, more than $6 million as well as $3 million to contractors. The report estimates the debt is between $20 to $30 million.
During the five-hour show-cause hearing, the city admitted it cannot provide adequate service to its 12,000 customers. However, the city’s attorney said the utility is making small progress and would like more time to continue with those improvements. That received loud laughs from customers in the packed hearing room.
The city admitted HSPU is understaffed and lacks qualified managers. In the last decade, the utility has seen six managers come and go. The investigation found the utility only has two line crews to work 1,900 miles of coverage area.
Neither the mayor, the attorney, nor the HSPU general manager knew much of the basicsabout the utility when asked, such as how much they charge customers for a kilowatt hour, the average usage of a customer, and what the TVA charges the utility for power.
One customer told the three-member commission the wait period to restore electricity has gone from hours to days.
Mark Bollock said that by his estimate, if the utility sold its grid certificate, it would cost HSPU $43 million.
“You need to make a difference today, not two years from now, or Holly Springs will not exist in 18 months,” he said.
Another customer said she and her husband retired to the Holly Springs area in 2020. Living in the HSPU coverage area “has been a nightmare… it has financially broken us,” she said. During their five years as customers, she said they have had to replace all of their appliances due to power surges and weak currents.
The commissioners voted to impose fines and penalties against the utility, per Mississippi law.
Several times during the hearing, it was said that this is the first time the commission had to deal with an issue of taking over a utility.
“We’ve never been here before,” said Commissioner Brown. “This is all history for the state of Mississippi.”
Holly Springs officials, including the mayor and utility head, did not respond to a request for comment Thursday afternoon.
