Drew could find itself in hot water over rates

By BRYAN DAVIS PUBLISHER,

The City of Drew is in violation of Mississippi Code when it comes to its water rates outside its city limits, and the Mississippi Public Service Commission has given the municipality a little over a month to correct it or it may face a hefty fine.

The PSC ruled during a hearing with representatives from Drew this week that the city is in violation of Miss. Code Ann. 77-3-35 and 77-3-37, “having failed to seek Commission approval of rates for customers beyond one-mile of the corporate limits and failing to file schedules with the Commission showing those rates and charges. 

Municipalities typically have jurisdiction over water rates inside their boundaries and one mile outside the city limits, but PSC has jurisdiction over areas beyond that one-mile radius.

During the 2013 Legislative session, Drew obtained enabling legislation through Senate Bill 2932 to construct, expand, operate and maintain a water distribution system in a certain area more than five miles from Drew’s corporate limits, PSC said.

The Commission said it granted Drew a municipally-owned utility, a certificate of public convenience and necessity to provide water service.

This was conditional upon Drew filing a tariff with the Commission and seeking approval of initial rates, charges and a service extension policy, prior to assessing its customers for water service, PSC said in its ruling this week.

“Drew has not filed a tariff or a rate filing with the Commission,” PSC said. “On or about March 16, 2017, the Commission became aware that Drew was charging MPSC jurisdictional customers unapproved rates in violation of Miss. Code Ann. § 77-3-35. Having been unable to resolve this matter through informal processes, the Commission initiated these formal proceedings to further urge Drew to adhere to Commission rules and regulations and to advise Drew of the legal consequences for its continued failure.”

Drew now has until May 20 to file with the Commission a formal notice of intent to change rates in accordance with Rule 9 of the Public Utilities Rules of Practice & Procedure.

If they fail to do so, without obtaining an extension from the Commission, it may result in civil penalties in the amount up to and including $5,000 per day and/or result in a Commission-initiated service adequacy hearing, possibly resulting in certificate cancellation, the ruling said.

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