A pair of significant figures have thrown cold water on any thought by Itta Bena officials that the town should not turn over its electricity operation to Entergy Mississippi.
One, Northern District Public Service Commissioner Brandon Presley, helped broker the deal with Entergy in order to keep the lights on in the town. The other, Geoffrey Wilson, is well familiar with how much the town has struggled to pay its bills, since he manages the utility cooperative that has been providing Itta Bena with the power it resells to residents and businesses.
Presley and Wilson are basically saying town officials have to be nuts if they try to back out of the transfer to Entergy. The two not only raise doubts about how much progress the town has made on paying its longstanding delinquency, but they make it clear what the possible consequences would be if the city doesn’t go forward with the transfer.
Reginald Freeman, the mayor who is facing a do-over election following a successful challenge of his narrow victory in June, had recently claimed that Itta Bena had been making progress in retiring its debt to the Municipal Energy Agency of Mississippi. Not so, countered Wilson, MEAM’s president and CEO. In a tersely worded Nov. 19 letter to Freeman, Wilson said “not a single penny” of Itta Bena’s $653,000 past-due balance — not including interest, legal costs and other potential penalties — had been retired.
As Presley notes, it is ludicrous for town officials to claim that the electricity department is an important revenue source that helps cover the city’s operating costs when the department is not generating enough revenue to pay MEAM in full. Either the electricity department is not collecting enough to cover expenses, or what it is collecting is being diverted to costs unrelated to providing power to the town’s customers. Either way, the numbers don’t lie. It’s not working.
And it’s only going to get worse if this arrangement continues for much longer. MEAM indicated that starting this month, Itta Bena is not going to get the same discounts that other purchasers, such as Greenwood Utilities, receive from MEAM. Those higher wholesale rates will have to be passed on in higher rates for the town’s customers. And that’s just in the short term.
In the longer term, Presley suggests that if the transfer is not made to Entergy, Itta Bena’s roughly 1,000 customers may have to fork out $700 each to pay off the debt to MEAM. Either that, or risk MEAM threatening to pull the plug again, which it nearly did a year ago. Plus, the utility’s grid is so outdated that, according to Presley, it’s going to take millions of dollars to bring it up to par. Where is that funding going to come from in a money-losing operation?
The only sensible option for Itta Bena is to get out of the electricity business, and to do it as soon as possible. Anyone who doesn’t see that and believes Itta Bena can make this chronically troubled enterprise profitable is being delusional.
