Commission chairman Lynn Posey and two commission members told The Associated Press that about a dozen employees will keep working, including six investigators.
Commissioners were interviewed as they were preparing to notify staff members about the furloughs.
"We're now down to protecting rate payers with spit balls," commissioner Brandon Presley said.
Legislators failed to pass a PSC budget before the fiscal year started Wednesday. The agency's funding didn't pass because of a dispute about commissioners' requests for additional staff members. House Democrats supported the request, but Senate Republicans opposed it.
Republican Gov. Haley Barbour has said he will call legislators back into special session to pass the PSC budget after House and Senate negotiators agree on a funding plan. Barbour's spokesman could not immediately be reached.
The PSC regulates telecommunications, and electrical, natural gas, water and sewer utilities. It also enforces a no-call list designed to help consumers avoid unwanted telephone solicitations.
Bentz said that the furloughs include most of the PSC's pipeline safety employees, the entire computer and technical staff and workers who handle payroll and other financial matters. He said the only staff attorney will keep working, as will a chief of staff for each of the three elected commissioners.
"We've knocked our staff down to a bare minimum," Bentz said.
Posey said PSC employees will receive their next paychecks in late July, and he hopes the budget will be resolved by then. He said commissioners will ask lawmakers to ensure the workers get paid for the time they were furloughed.
The PSC had asked Attorney General Jim Hood for a nonbinding legal opinion about whether the agency could function without a budget. Hood told commissioners Wednesday that the PSC could keep performing some of its duties. His office released a written opinion Thursday.
Mike Lanford, deputy attorney general, wrote that without a budget: "The PSC can only obligate the state to pay the minimum number of employees necessary to carry out its core functions of 'supervision' of utilities."
The attorney general's office said the three public service commissioners could be held personally liable if a court were to find the agency had operated nonessential functions without a budget.