Entergy Mississippi President and Chief Executive Officer HaleyFisackerly visited Brookhaven Tuesday to offer a detailedexplanation on his company’s much-criticized rate increase.

Speaking at a joint meeting of the Brookhaven Lions Club and theBrookhaven Kiwanis Club, Fisackerly explained the 28 percent rateincrease that began appearing on customers’ bills as of July 1 is adirect result of the rising costs of natural gas, one of theprimary fuels used to generate electricity for the state.

Fisackerly said the use of natural gas has increased 5 percentover last year. And so far in 2008, more than 65 percent ofEntergy’s operating costs – $1 billion of $1.4 billion – have gonetoward purchasing the fuel.

“The money is going out the door as soon as I can get it in,” hesaid. “We’ve seen natural gas shoot up nearly 120 percent sincethis time last year.”

The 28 percent rate increase is not a profit increase forEntergy, Fisackerly said, but a “dollar-for-dollar pass through”for the company’s projected energy costs in the third quarter.

“By law, we cannot profit off the fuel we use to create energy,”Fisackerly said. “We didn’t just throw this increase out there – wedidn’t have a choice. We are required under the law to producedependable power.”

Rates are adjusted every quarter, Fisackerly said, and firstquarter costs are recovered in the third quarter; second in thefourth.

He said another fuel adjustment would be filed on Aug. 15. It istoo early to tell whether the rates will increase or decrease withthe adjustment, he said.

Natural gas is currently $9 per MMBTU (metric million Britishthermal unit), Fisackerly said, down from $13 per MMBTU earlierthis month. If the price stays at $9 or continues to drop, it wouldhelp alleviate the rate increase. However, Entergy has yet torecover increased natural gas costs incurred during the secondquarter.

“When we came into 2008, everyone projected $8 – $10 naturalgas, but it went way above $10,” he said. “If I could get downbelow $10 and stay there for a while, it would definitely helpreduce my costs. But all I need is a ruptured fuel line, a storm inthe Gulf [of Mexico] or a continued heat wave to drive prices backup.”

Fisackerly cited several reasons for the increased price ofnatural gas, such as the coldest winter in five years, a 64 percentincrease in natural gas exports to Mexico, a 60 percent decline inU.S. imports of liquefied natural gas and a 5 percent decline inCanada of natural gas imports.

Complicating matters of energy supply is the fact that Americaas a whole is using more electricity, Fisackerly said. He saidplasma TVs use three times the power of normal TVs, and it wouldrequire three of Entergy’s Grand Gulf nuclear stations tosimultaneously power the 10 million Sony Playstation 3s that havebeen sold in the U.S.

Fisackerly called for several plans to alleviate the nation’senergy crisis, such as the development of a comprehensive nationalenergy plan, region-specific use of various forms of energy and thedevelopment of nuclear power.

“Environmental policies in the early 1970s made it costprohibitive to build more coal plants and cost overruns in the1970s and 1980s made us abandon nuclear power,” he said. “We had tolook for other sources, and natural gas was the perfect choice – itwas plentiful, cheap and clean.

“But because of our lack of an energy policy, everyone ran tonatural gas,” Fisackerly continued. “The government needs toimplement a stable plan that can transcend market conditions anddiversify our fuel needs.”

Fisackerly advocated the use of solar and wind energy in regionswhere the sources would be viable, like solar energy on the WestCoast and wind energy in the Midwest, leaving alternatives likenatural gas and coal in areas where those sources would not befeasible, like the Southeast.

“Wind and solar power would not make sense in the Southeast, butwould make tremendous sense in the Midwest or the West Coast,” hesaid.

Fisackerly said a long-term solution to the nation’s energycrisis should be a reinvigorated approach to the construction ofnuclear power stations. Entergy is currently working towardbuilding a second such station at Grand Gulf, though the earliestit could come online would be 2020, he said, and the company is notyet certain if it will go forward with the plan.

“We’re moving as fast as we can,” Fisackerly said.

Fisackerly said it would take the U.S. Nuclear RegulatoryCommission four years to review the 13,000-page application filedby Entergy, but NRC representatives have already visited Grand Gulfto gather information.

Another factor slowing the process is the ongoing development ofGeneral Electric’s new Economic Simplified Boiling Water Reactor,which Entergy plans to use in any new nuclear power station,Fisackerly said.

“We haven’t built a nuclear station in 30 years, and we don’thave the supply chain, the trained workforce or the vendors inplace,” he said. “Until these questions are answered, we won’t knowwhat the costs are, and we have to know what the costs are to makedecisions in the best interest of our customers.”