Mississippi Senate Bill SB2788

Mississippi 2026 Regular Session

• Introduced: 1/19/26
• Refer: 1/19/26
• Failed: 2/3/26

Caption

AN ACT TO AMEND SECTION 77-3-1, MISSISSIPPI CODE OF 1972, TO ENSURE THAT MUNICIPALLY OWNED OR OPERATED PUBLIC UTILITIES ARE SUBJECT TO THE PROVISIONS OF THAT SECTION; TO AMEND SECTION 77-3-5, MISSISSIPPI CODE OF 1972, TO STIPULATE THAT MUNICIPALLY OWNED OR OPERATED PUBLIC UTILITIES SHALL UNDERGO ANNUAL AUDITS CONDUCTED BY THIRD-PARTY FIRMS; TO REQUIRE THAT THE RESULTS OF SUCH AUDITS BE REPORTED TO THE PUBLIC SERVICE COMMISSION AND THE PUBLIC UTILITIES STAFF; AND FOR RELATED PURPOSES.

Summary

SB 2788 would expand state oversight of municipally owned or operated public utilities in Mississippi. The bill amends Section 77-3-1 to make clear that municipal utilities are subject to the provisions of the chapter, rather than broadly exempt from them, while preserving existing exceptions already in law. It also amends Section 77-3-5 to authorize the Public Service Commission (PSC) to contract with third-party firms to conduct annual audits of municipally owned and operated public utilities. Under the bill, the audit findings must be reported to the PSC and the Public Utilities Staff by December 1 each year. The PSC would also be authorized to impose a civil fine for violations of the audit requirement. The bill takes effect July 1, 2026.

Impact

The bill would change the regulatory framework for municipal utilities by bringing them more clearly within the scope of Chapter 77-3 and by adding a new annual audit and reporting requirement. In practical terms, municipally owned or operated electric, water, gas, or sewage utilities would face increased state oversight through PSC-supervised third-party audits, with audit results shared with state utility regulators. The bill does not appear to alter the PSC’s existing rate-setting limits over municipal utility rates, but it does expand compliance obligations and enforcement authority.

Sentiment

Based on the bill caption and text, the measure appears to be framed as an oversight and accountability bill rather than a rate-regulation bill. No committee transcripts or recorded votes were provided, so there is no direct evidence of support or opposition from legislators, utilities, or the public. The overall tone of the bill suggests a policy preference for greater transparency and independent review of municipal utility operations.

Contention

The likely point of contention is the increased state oversight of municipally owned utilities, especially the requirement for annual third-party audits and reporting to the PSC and Public Utilities Staff. Municipal utilities may view this as an added administrative and financial burden, while supporters would likely argue it improves accountability and public confidence. Another possible issue is the bill’s interaction with existing statutory exemptions for municipal utility rate regulation, since it expands oversight while preserving some limits on PSC jurisdiction.