TVA suing Holly Springs over power grid failures ...Middle East

The Tennessee Valley Authority, a federally created utility that sells wholesale power to local providers in the south including Mississippi, is suing the city of Holly Springs for breaching a contract by continuing to mismanage its electric department.

TVA, which has sold power to north Mississippi city since 1935, alleges Holly Springs breached a power contract between the two parties by taking funds from its utility department when it shouldn’t have, as well as by failing to make timely payments, increase its retail rates to customers, and provide regular financial updates to TVA.

That lawsuit, filed May 1 in the United States District Court in Oxford, lists as defendants: Holly Springs Mayor Sharon Gipson, who recently lost her bid for reelection, all five members of the city’s Board of Aldermen, and Wayne Jones, the utility department’s general manager. The suit asks the court to use its authority to enforce the contract.

Years of under-investment and deferred maintenance — as well as destructive weather, including a 2023 ice storm — have debilitated the utility to the point where customers experience unusually frequent and prolonged power outages, local officials, TVA and ratepayers told Mississippi Today. They said while the catastrophe was years in the making, decision-making under the current administration has exacerbated the problem.

In its complaint, TVA says it first warned the city in September 2023 that it lacked “necessary revenue” to run the power department. Last October, TVA again warned city leaders, saying it needed to increase customers’ rates to survive financially. The lawsuit alleges that Holly Springs hasn’t paid a monthly invoice to TVA on time since May of last year, and that it still hasn’t paid what it owes from this past February.

TVA also says Holly Springs leaders took funds from the utility department before ensuring there were sufficient reserve dollars. Under the parties’ contract, the city can take payments in lieu of taxes from the utility after it fulfills certain expenses, including saving enough money in reserves. The lawsuit alleges, though, the city made five such payments in the last year, all while having outstanding debts and thus no reserve funding.

While managed by city officials, the utility has expanded to the point where about two-thirds of its 12,000 customers live outside Holly Springs, meaning most ratepayers have no local voting power in terms of running the department.

Customers and state officials attribute much of the recent power issues to city leadership, especially Gipson, Holly Springs’ mayor since 2021. Just a month ago after severe weather took out power for Holly Springs customers, Northern District Public Service Commissioner Chris Brown alleged that Gipson refused assistance from crews in New Albany who offered help. Holly Springs officials denied the claim, FOX13 Memphis reported, saying the crews showed up without getting the city’s approval.

The Public Service Commission, which oversees the utility thanks to a bill state lawmakers passed last year, initially scheduled a hearing for city officials to appear in Jackson in January. The city successfully appealed the initial date, arguing one of its attorneys, Sen. Bradford Blackmon, had to appear in the legislative session. The PSC agreed to postpone the hearing until after the session, which ended a month ago.

“We are currently in the final stage of the third party investigation and are awaiting a report from (third party investigator) Silverpoint which will determine the exact scheduling of a hearing,” Richard Stone, a spokesperson from Brown’s office, told Mississippi Today on May 5.

During the 2025 session, Rep. John Faulkner, D-Holly Springs, offered two proposals related to the city’s utility: one requesting $2 million in appropriations, and another establishing a nine-person board — five appointees from Holly Springs and two each from the boards of supervisors for Marshall and Benton counties — to run the department. Both bills died in their House committees.

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