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To: Public Utilities
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026
By: Representative Powell
HOUSE BILL NO. 1305
(As Sent to Governor)
AN ACT TO AMEND SECTION 77-3-5, MISSISSIPPI CODE OF 1972, TO 1
STIPULATE THAT CERTAIN MUNICIPALLY OWNED OR OPERATED PUBLIC 2
UTILITIES SHALL UNDERGO ANNUAL AUDITS CONDUCTED BY THIRD-PARTY 3
FIRMS; TO PROVIDE FOR SEVERABILITY OF THIS ACT; TO STIPULATE THAT 4
THIS ACT SHALL NOT APPLY TO ANY ACTIONS OR PROCEEDINGS PENDING ON 5
THE EFFECTIVE DATE OF THIS ACT; AND FOR RELATED PURPOSES. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 7
SECTION 1. Section 77-3-5, Mississippi Code of 1972, is 8
amended as follows: 9
77-3-5. (1) Notwithstanding any other provision of law, and 10
subject only to the limitations imposed in this chapter and in 11
accordance with the provisions of this chapter, the Public Service 12
Commission shall have exclusive original jurisdiction over the 13
intrastate business and property of public utilities and, for 14
purposes of clarification of the existing scope of said exclusive 15
original jurisdiction, such exclusive original jurisdiction 16
extends, but is not limited to: the establishment of retail 17
rates; challenges, including customer complaints, to the amount of 18
a retail rate or customer bill or whether such rate is just and 19
reasonable; and challenges to the validity or accuracy of rates 20
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charged by a public utility, or to the accuracy or reliability of 21
information submitted to the Public Service Commission by a public 22
utility or other person in support of or in opposition to a 23
proposed or approved rate, regardless of the legal theory upon 24
which any such challenge is made. * * * The commission shall not 25
have jurisdiction * * * for the production and gathering of 26
natural gas or the sale * * * and/or distribution in or within the 27
vicinity of the field where produced, or over the facilities and 28
equipment utilized in any such operations, including, but not 29
limited to, such facilities as separators, scrubbers and gasoline 30
plants of all types. Further, the commission shall not have 31
jurisdiction over the governance, management or other internal 32
affairs of entities as described by paragraphs (b) and (c) below. 33
Moreover, the commission shall not have jurisdiction to regulate 34
the rates for the sales and/or distribution: 35
(a) Of adequately provided gas, water, 36
electricity * * * and sewage disposal services by municipalities 37
to * * * customers located within and including one (1) mile 38
outside of their corporate boundaries; 39
(b) Of gas or electricity by cooperative gas or 40
electric power associations to the members thereof as consumers, 41
except as provided by Section 77-3-17, where service is rendered 42
in a municipality; 43
(c) Of water or sewage disposal service by nonprofit 44
corporations or associations where the governing body of such 45
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corporation or association is elected by the consumers thereof or 46
appointed by the county board of supervisors; or 47
(d) Of water by districts organized under the 48
provisions of Chapter 45, Laws of 1966-1967, Extraordinary 49
Session. 50
(2) Notwithstanding any other provision of law, the Public 51
Service Commission shall have the authority to contract with 52
third-party firms to conduct annual audits of municipally owned 53
and operated public utilities only if a public utility receives a 54
"D" or "F" rating from the Department of Health according to the 55
provisions of House Bill No. 1632, 2026 Regular Session, by 56
request of the mayor of the municipality, or by request of a 57
supermajority of either the board of alderman or city council of 58
the municipality. The cost of such review is to be borne by the 59
particular public utility subject to the review. The findings of 60
such audits shall be reported to the Public Service Commission and 61
the Public Utilities Staff by December 1 each year. Violation of 62
this subsection (2) shall result in a civil fine to be set by the 63
Public Service Commission. 64
SECTION 2. If any section, paragraph, sentence, clause, 65
phrase or any part of this act is declared unconstitutional or 66
void, or if for any reason is declared to be invalid or of no 67
effect, the remaining sections, paragraphs, sentences, clauses, 68
phrases or parts thereof shall be in no matter affected thereby 69
but shall remain in full force and effect. 70
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ST: Municipally owned energy distribution
system; expand oversight.
SECTION 3. This act shall not apply to any actions or 71
proceedings pending on the effective date of this act. 72
SECTION 4. This act shall take effect and be in force from 73
and after July 1, 2026. 74