Mississippi insisted that it would not cooperate with a Federal Energy Regulatory Commission (FERC) plan to open the nation's patchwork electricity transmission grid to greater competition.

While FERC's plan is moving smoothly in the Northeast and Midwest, it has hit a wall of opposition from Southern regulators who see it usurping their power and possibly boosting costs for consumers. Mississippi will not surrender constitutional or legislative authority over its grid to FERC, and “we are very firm about that,” said Michael Callahan, state Public Service Commission. The region's cheap power has helped create jobs in his state, he said. “We don't want to give those up and we don't want to make radical changes to a system that has produced such low rates.”

North Carolina and Arkansas, however, softened their opposition to the FERC proposal for a standard market design to encourage U.S. utilities — including regional giants like Southern Co. and Entergy Corp. — to turn over control of their transmission systems to super-regional grid operators.

FERC commissioners hosted a conference blocks away from Southern Co.'s headquarters to reach out to state commissioners from states like Arkansas, Louisiana, Georgia and Mississippi, which have fought the plan. Big utilities like Southern Co. also have voiced major concerns.

FERC Chairman Pat Wood said the South's electricity rates are near the national average of about 7 cents per kilowatt-hour and could fall with more competition. “The old world was one where individual utilities took care of everything,” but the future trend is toward more open markets with multiple participants, Wood said.

North Carolina and Arkansas officials conceded that FERC has made strides to allay their concerns. In April, the agency revised its grid design plan to allow regions to set their own timetables and decide how to monitor new power markets.

“They have listened. They have responded,” said James Kerr, a North Carolina utility commissioner who heads a group of regional commissioners. However, Kerr said he still had “lingering fundamental skepticism” about the grid plan and feared extra layers of bureaucracy that a federal regime might impose.
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