) has received an approval from the Mississippi Public Service
Commission (MPSC) to increase monthly rates of residential
electricity. The revised rate is expected to be applicable from
Sep 2013. Since 2009, this is the first rate-hike, which comes
under the company's Formula Rate Plan.
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Currently, the average residential electricity customer, using
1,000 kilowatt-hours (kWh) per month, pays $100.12 per month. Per
the rate revision, the average residential customers will pay
$102.83, up 2.7% from earlier amount.
Entergy intends to increase its residential electricity bill in
order to fund the costs incurred to upgrade and install
transmission lines, set up new substations and add advanced
technologies in its service territories.
We note that it is a regular practice of the utility providers to
file for rate hike to recoup the investment made to develop
infrastructure or to recover cost to make new purchases.
Previously, the MPSC approved Entergy's appeal to increase the
electricity rate for recovering the company's investment and
purchase a share of Entergy Arkansas' Grand Gulf nuclear plant.
Further, the approval will enable Entergy to finance the purchase
of a power plant in Jackson and manage a rise in natural gas
Like most of the utility providers, Entergy has made considerable
investments over the last couple of years to upgrade existing
infrastructure, construct high-efficiency natural gas-fired
energy power plants, and acquire as well as develop nuclear power
The rate-hike approval by the commission encourages Entergy to
invest more for developing the utility infrastructure. In 2013,
the company intends to invest an additional $96 million for the
improvement of reliability and clearance vegetation. These
initiatives will subsequently enable Entergy to provide reliable
uninterrupted services to its customers at a lower cost.
New Orleans, La.-based Entergy Corporation and its subsidiaries
are engaged in the electric production and retail distribution
Entergy currently has a Zacks Rank #3 (Hold). However, other
stocks in the industry that are worth considering include
Huaneng Power International, Inc.
) with a Zacks Rank #1 (Strong Buy), and
Alliant Energy Corporation
), each with a Zacks Rank #2 (Buy).