Multiple violations found during assessment of Holly Springs Utility Department

Published: Sep. 6, 2023 at 8:09 PM CDT|Updated: Sep. 6, 2023 at 8:39 PM CDT
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HOLLY SPRINGS, Miss. (WMC) - More concerns are coming out of a TVA Assessment report about the Holly Springs Utility department.

TVA says the department is in a critical financial position.

HSUD customers could also see an increase in their bills

“We have identified multiple violations of the wholesale power contract that’s resulted in 27 actions HSUD must take to get back into compliance,” said Melanie Farrell, Vice President, External Strategy & Regulatory Oversight at Tennessee Valley Authority.

In March, the Tennessee Valley Authority started the compliance assessment. Some of the issues found include financial reporting, consumer reporting, use of electric system revenue, service practices standards, and others.

“We continue to receive a large number of calls from the customers of Holly Springs related to the safety and reliability of the distribution system,” said Farrell.

While the TVA says HSUD is caught up with financial reporting for this fiscal year. The utility is still missing an external audit report for 2021 and 2022. The TVA said they are concerned about the accuracy of the reporting because HSUD has not had an external audit done.

“Some of the violations we found may artificially inflate the financial position of the utility,” said Farrell.

Other concerns from the TVA deal with the system’s ability to operate and maintain at a self-operating and financially sound basis going forward.

Another issue TVA reports is HSUD not collecting what’s owed to them from consumers which they say violates the utility’s own rules and regulations.

“Our analysis shows that HSUD does not have and will not generate the necessary revenue to cover its cost on its current trajectory,” said Farrell.

TVA recently approved a 4.5 % rate increase that applies to all of the 153 local power companies with the utility provider beginning October 1.

“Given that Holly Springs power cost will increase it is even more important that HSUD is appropriately collecting amounts due from its customers,” said Farrell.

TVA says they are willing to work with the Holly Springs board of aldermen, the mayor and HSUD to get out of compliance. The board has 30 days to respond with a written plan on how they plan to get in compliance.

Watch a video of the board meeting here:

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