Fuel charge increase sends jolt through casinos and their power bills

By Brad Kessie - bio | email

BILOXI, MS (WLOX) - Sometime in the next week, the Public Service Commission will approve Mississippi Power's fuel adjustment increase. And its residential customers will have to pay nine percent more each month for electricity.

Businesses will pay even more. And for awhile, that didn't sit very well with casino executives. On Tuesday, those somewhat shocked casino executives wanted to know why their already tight budgets were about to receive another jolt, simply because the price of coal went up. So, they met with Mississippi Power's Anthony Topazi to get some answers.

After that meeting, Topazi said, "I'm hopeful that this fuel clause will do the trick for a considerable period of time."

Casino executives are just as hopeful. With so many flashing lights on so many slot machines, their power bills are quite high. And the IP's Jon Lucas says that's never good when business is slow.

"It's certainly a difficult economic time for everybody," said Lucas.

When casino managers first heard Mississippi Power needed to add up to 16 percent to their monthly bills to cover higher fuel costs, most casinos execs seemed confused and worried. Beverly Martin heads up the Mississippi Casino Operators Association.

"I don't think they were aware, to be honest with you, of how much it was going to be," she said.

At the smallest coast casinos, they estimated the new power bill charge would be at least $250,000 a year. They compared the Mississippi Power hike to playing Monopoly, and landing on Boardwalk, with four hotels on it. They felt it was very costly.

"Any increase in expenses gets our attention," Lucas said.

Which was why, just days before the Public Service Commission authorized Mississippi Power's fuel adjustment increase, casino executives and power administrators met at the IP. Their closed door get together gave both sides a chance to hash out their philosophic and economic differences.

"We're in tough times. We're in a deep recession. And everybody hurts anytime costs go up," Topazi admitted. "And so this was very helpful to help clarify and to help understand what's in the fuel clause, and why did fuel go up."

State law gives Mississippi Power the right to recoup its losses when fuel costs skyrocket. That's why Public Service Commissioner Leonard Bentz says his hands are tied. He knows a bump in power bills will hurt both residents and businesses.

"Times are tough everywhere," the PSC commissioner said. "I go to bed thinking about job losses. Please give me the opportunity to figure out how to resolve this issue."

For the moment, that's impossible, because Mississippi rules say Bentz is bound by the fuel clause to approve the rate increase later this week. As Lucas and the majority of his fellow casino executives walked out of their meeting, they seemed to accept the Mississippi Power explanation.

"This, as I said, was very informative of getting a better understanding of what they're going to do to try to maintain fuel costs going forward," he said.