The Chickasawhay Natural Gas District supplies natural gas to the cities of Quitman, Shubuta, and Waynesboro and surrounding areas. Operating outside the regular jurisdiction of both federal and state utility regulatory agencies, the district’s Board of Directors, composed of the mayors of these three cities, determines all policies and pricing.
The district has not adhered to a policy of full financial disclosure. During FY 1987, the district did not adequately report $52,200 in fees and benefits received by the three directors. In addition, for the period FY 1981 through December 1987, the district violated Mississippi Constitution Section 96 by paying $72,885 in extra compensation to individual board members, district personnel and the board’s attorney.
The district’s retail rates have not been promptly reduced in response to wholesale price adjustments. The practice of distributing a portion of annual revenues to the three municipalities amounts to a cross-subsidy by district gas consumers to city residents who may not consume gas. The district’s cash reserves ($2,123,438 as of June 30, 1987) should be reviewed by an independent expert to determine if reserves are reasonable and necessary.
The report recommends corrective action and suggests provisions for operating controls and full financial disclosure that should be considered by the Legislature if future local utility districts are created by statute.
For a paper copy of this report, contact PEER by telephone at 601-359-1226 or by e-mail at reports@peer.ms.gov.