The ongoing battle between the Mississippi Public Service Commission and the city of Holly Springs over the town’s alleged failure to provide adequate electrical services to its customers continues – this time with state regulators disapproving a judge’s order.
On Tuesday, Chancery Judge Larry Little appointed Michael F. Watson as receiver over the Holly Springs Utility District (HSUD). Not to be confused with Mississippi’s secretary of state, Watson is a consultant who has worked with the city of Holly Springs for the past nine months regarding its utilities system.
As receiver, he is granted temporary, total control of HSUD to resolve any internal mismanagement that has led to unreliable services for customers. The city recommended Watson, and the judge accepted the municipality’s request, though the public service commission is preparing to file a motion to reconsider.
The commission strongly disapproved of Watson’s appointment. The three-member elected regulatory authority had vied in court for Frank Simon to be the receiver. Simon, per Northern District Commissioner Chris Brown, is a professional court receiver with a 30-year track record of successfully rehabilitating failing entities.
The commission contends that Watson’s appointment does not represent a meaningful change in management for HSUD and is concerned that frequent power outages could persist without an immediate shakeup of how the system operates.
Commissioners pointed to Judge Little’s admission that HSUD’s management had been “grossly inefficient, irresponsible, and unresponsive to the needs of its electric utility customers” as justification for disputing the appointment of a receiver who has allegedly made no notable progress in righting the ship.
“For years, families served by HSUD have lost power for days at a time; food spoiling in refrigerators, medical equipment going dark, refrigerators and HVAC units burned out by a system that could not deliver steady service. Then the bill arrives, and it bears no relation to the last one. That is not an inconvenience; that is a household budget wrecked, and a family put at risk, over and over, with no explanation and no accountability,” Brown, the commission’s chairman, stated.
“While we respect the Court, this appointment does not change who has been running this utility, and I am committed to exhausting every avenue until the people of HSUD receive the reliable service and honest billing they have paid for and been denied,” he continued.
Along with the motion to reconsider, the commission said it intends to request a comprehensive forensic audit of the HSUD.
Backstory
For decades, HSUD customers have complained that unreliable power has been a persistent issue in their homes and businesses. HSUD serves roughly 12,000 customers, nearly 80% of whom do not live in Holly Springs. The service area encompasses its home city, along with parts of Marshall, Benton, and Lafayette counties in Mississippi and Hardeman and Fayette counties in Tennessee.
With HSUD being managed solely by city officials, those living outside of the Holly Springs city limits are virtually powerless when it comes to the services they receive, which has been a focal point of the outcry against the public utility. To address these concerns, Brown petitioned the state legislature to pass Senate Bill 2453 during the 2024 session. The bill expanded the commission’s authority over public utilities.
Brown and his commission colleagues utilized the new power to have Silverpoint Consulting, an independent firm, look into complaints levied against HSUD. While at first, Holly Springs officials were able to skirt subpoenas and a show-cause hearing facilitated by the commission, a change in leadership within city hall proved effective in moving the proverbial ball in the right direction.
During the April 2025 municipal primaries, Charles Terry, a former Marshall County supervisor, defeated incumbent Democratic Mayor Sharon Gipson. Terry went on to win the mayor’s seat, and, according to Brown, was much more cooperative with independent investigators and regulators in their pursuit to get to the root of HSUD’s problems.
The new mayor’s compliance was, at first, breath of fresh air for the commission and the Tennessee Valley Authority, the nation’s largest public utility and the entity that sells wholesale power to HSUD, but it did not change how regulators planned to proceed following Silverpoint’s investigation, despite rumors that had circulated of a deal being struck.
In a scathing 75-page report, Silverpoint found that several years of mismanagement caused HSUD to spiral into a degenerative state. The firm’s investigation of HSUD encompassed a broad range of areas, including system operations, vegetation management and other preventative maintenance, emergency preparedness and response, system planning and analysis, and support functions such as metering and billing.
Blatant issues such as vegetation overgrowth along power lines, substations that have been near-abandoned to the point that the entire system’s reliability is in peril, and flawed emergency response practices — all of which could put area residents in imminent danger — have been the product of a lack of leadership within HSUD, per Silverpoint.
During its August 2025 public meeting, the Public Service Commission ordered HSUD leadership to appear in the city of New Albany’s municipal courtroom for a show-cause hearing.
At a Sept. 4, 2025, hearing, Silverpoint Consulting outlined its report on HSUD’s provision of electric utility services, while Holly Springs leaders were able to respond to the findings. The public, which arrived in droves, had the chance to weigh in on HSUD’s scope of service, and the commissioners were active participants.
During the hearing, city officials admitted to Brown that HSUD is not adequately serving its customers. Commissioner Carr asserted that the city’s current administration also failed to provide a viable explanation as to how it planned to shore up the utility, leading to Tuesday’s imposition of a fine and the announcement that the commission will push for a third party to take over the utility system.
“Those newly elected officials were elected. They need to figure it out,” Carr said on the city’s responsibility to keep HSUD up to code. “Our job is to make sure that they figure it out. They need to give us a plan. They came to that meeting with no plan. I didn’t hear one [official] say, ‘Hey, here’s our plan.’ It’s sad.”
Since then, a court case has played out, with a state judge ruling that Holly Springs is not capable of managing its public utilities. However, the individual selected to oversee the utility district is not the public service commission’s preferred candidate.