HSUD receiver named

Judge Lawrence “Larry” Little of Mississippi’s 18^th Chancery Court District, on Monday, Aug. 10, appointed utility consultant Michael Watson as receiver for the troubled Holly Springs Utility Department, selecting him over competing candidates proposed by state regulators and the region’s primary power wholesaler.

The court’s decision follows a receivership hearing that leaves Watson in full control of the municipal electric system’s day-to-day operations and financial recovery. Watson has served as HSUD’s operational consultant for the past several months.

“Well, the court ordered that there be a receivership, but the court also allowed the person who has served as a consultant with the utility department with the city for the last seven months to serve as the receiver,” said Holly Springs City Attorney J. Keith Perry Jr.

Perry noted that Watson’s existing experience with the utility made him the most effective choice to carry the department forward.

“He’s basically rebuilt a lot of the infrastructure for the utility department,” Perry said, quoting Alderman at Large Dexter Shipp. “We got things going in a direction, hopefully, that will be able to bring better services to the city and to the service area and to everybody from the parts in Tennessee that’s serviced by that utility department.”

Perry emphasized that the goal under Watson’s oversight is long-term economic stability and reliable infrastructure.

“The goal has been to be able to put strict structure in place that will have the utility department to serve as a part of bringing businesses that will want to develop in that corridor that’s serviced by the utility department, and to provide effective service for the service area,” Perry added.

Under Mississippi law and court mandates, the court-appointed receiver assumes sweeping operational, technical, and managerial authority over the utility:

Full Management and Unilateral Control: The receiver acts as an officer of the court with complete authority over the management of all electrical assets and day-to-day operations. This includes the power to act unilaterally regarding employment decisions, evaluating staff, and determining employee retention or hiring.

• Financial and Operational Restructuring: The receiver is tasked with conducting a deep-dive forensic accounting analysis to establish a clear financial baseline and separate the electric division from other city departments.

• System Upgrades and Oversight: Authority extends to addressing safety programs, completing GIS mapping, executing right-of-way vegetation management, overseeing pole and substation inspections, accelerating meter replacements, and adding essential lineworkers to address critical staffing shortages.

• Court Reporting: The receiver reports directly to the chancery court rather than city political leadership, filing an initial asset inventory and comprehensive report within 45 days, followed by periodic operational updates. The appointment comes despite pushback from regulatory bodies Mississippi Public Service Commission and the Tennessee Valley Authority.

During the hearing, officials noted that HSUD faces significant operational and financial challenges, including an unpaid wholesale power balance with TVA exceeding $18 million. To address revenue shortfalls, the city has proposed a nine percent overall rate increase (eight percent residential and 11 percent commercial), alongside annual three percent incremental rate adjustments over five years.

Judge Little structured the order to maintain current operational stability while placing strict reporting requirements on the utility. Watson will present regular financial and operational updates to the chancery court as he oversees system upgrades and coordinates debt settlement negotiations with TVA.