Power, Priorities, And A Big Bill Coming Due
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DAVE’S WORLD
By David Howell
There’s been a lot of buzz lately about Water Valley’s newly formed Electric Commission—and for good reason. Come August 1, this five-member group – Terry Allen Jr., Ray Hawkins, Vickie Person , Brandon Presley and Barry Weeks – officially step in to oversee the city’s electric department, a utility that quietly powers our lives and helps keep the rest of city government afloat.
If you’re curious about what’s next, I’d recommend sitting in on the public work session scheduled for Monday, July 28, at 6 p.m. at City Hall. This won’t be a business-as-usual meeting. Representatives from TVA (Tennessee Valley Authority), TVPPA (Tennessee Valley Public Power Association), and the engineering firm Atwell and Gent are coming to give the Electric Commission a strong foundation. I expect the gist of this will be to determine what’s working, what’s failing, and what we can’t afford to ignore any longer.
Atwell and Gent will also present something I think folks will appreciate: a “Water Valley Electric Reliability and Resilience Priority List.” It’s a mouthful, but the idea is simple—lay out the most urgent projects in black and white, show what’s underway, and rank what’s next to improve service. This list will be made public, and that kind of transparency is a good thing.
Now here’s where things get real.
The electric department brings in around $7 million in annual revenue. Out of that, about $615,000 is transferred each year to the city’s general fund. That’s called a tax equivalency payment—or in-lieu-of-tax—and it’s not uncommon. Lots of cities with municipal utilities (water, gas and others) do this to help fund parks, police, potholes, and everything else.
But here’s the catch: Water Valley’s electric department pays 100 percent of the taxable value of its infrastructure. Most cities don’t ask that much of their utilities. The average across Mississippi for city-owned electric departments is probably closer to 50 percent.
If we followed that standard, we’d be keeping roughly $300,000 a year inside the electric department. Over 10 years? That’s $3 million we could use for upgrades and maintenance.
And now, as our electric grid shows its age and the to-do list grows, that money gap starts to matter a whole lot more.
So what’s the solution?
In my opinion—and I hope I’m wrong—we’re going to have to scale back at least some of that $615,000 payment to the city and, yes, possibly raise electric rates. Nobody wants to hear that. But we need a system that’s reliable, safe, and financially sustainable.
The newly seated commission has a big job ahead, and I sure don’t envy them.
