Starting immediately, residential rates will decrease from $9.56 per MMBTU to $7.14 per MMBTU.
Northern District Public Service Commissioner Brandon Presley said his office received a tip the utility was overcharging customers. Upon reviewing the rates, he found the gas system set its rates higher than its actual cost of business, which it's not supposed to do.
"By law, they can only charge what they have evidenced is their cost," Presley told the Daily Journal on Wednesday.
Until that cost can be determined, the city and the PSD agreed to set the rate at the most recent figure on file at the PSD which is $7.14 per MMBTU.
Presley further stated the utility had some $3.3 million in the bank from years of overcharging. He hinted a refund to customers could be warranted.
The utility wasn't intentionally overcharging customers, said Pontotoc Mayor Jeff Stafford. It had adjusted its rates annually according to fluctuations in the gas market. And it had lowered those rates two years in a row based on decreasing prices.
In light of the PSC's findings, he said, the city will adjust rates monthly to reflect market values as they occur.
Stafford also said the $3.3 million is a normal amount to be in the bank this time of year. The utility uses the money during the summer months – when it doesn't sell as much gas – to continue paying its operating expenses.
Those funds will dwindle by fall, he said.
Read more in Thursday's Daily Journal
hadn't filed its rates with the agency in more than a decade and