The unanimous decision follows a months-long investigation by Silverpoint Consulting, which found HSUD in what investigators described as “critical condition.” The report documented overgrown rights-of-way, neglected substations, broken equipment left unfixed for years, and a collapse of the city’s metering and billing system
A System in Disrepair
At a Sept. 4 show-cause hearing, retired utility executive Thomas Suggs Jr., who led the investigation, testified that HSUD’s infrastructure failures posed serious safety risks. He pointed to a transformer damaged in an explosion seven years ago that was never repaired.
“The worst case is it blows up. … At the very least it’s going to fail,” Suggs said. “If it's been out of service for that long, I wouldn't wanna be the one that stood there and made it energized again.”
The report also found HSUD operates with only two line crews to cover a 1,600-square-mile service area and has no functioning emergency response plan. During a past storm, the Mississippi Emergency Management Agency had to take control of restoration after outside crews refused to work under unsafe conditions
Impact on Residents
Residents at the hearing described how outages disrupt their daily lives. Edith Old, a retiree whose husband has Parkinson’s disease, said frequent service failures make even basic tasks impossible.
“We sit in the dark without the ability to water our garden, cook, bathe, or have dependable water with which to take daily medicine,” Old said. “This is simply reprehensible.”
Public comments reflected deep frustration with city leadership. Many said the problems are not new but have worsened in recent years as outages have become more frequent and bills more erratic.
Financial Collapse
Silverpoint’s investigation also uncovered years of financial mismanagement. The city diverted utility revenues into its general fund, failed to raise rates despite warnings from the Tennessee Valley Authority, and allowed debts to pile up. TVA filed a federal lawsuit in May alleging Holly Springs breached its wholesale power contract by missing payments, misusing revenues and withholding required financial reports
By the time of the hearing, HSUD owed millions to TVA and contractors. Northern District Commissioner Chris Brown said the scale of the debt, combined with decades of neglected maintenance, left the city without a viable path forward for keeping control of the utility.
“Holly Springs is suffering. Not only are the people suffering, but the property values are unusually low because very few people want to move in there because you can't rely on the utilities,” Brown said. “Economic development is almost nonexistent because no company is going to go in there and risk their livelihood based on unreliable power.”
What Happens Next
Under state law, the PSC has authority to petition a circuit judge to place a failing utility into receivership. If the court agrees, a receiver could be appointed to manage HSUD temporarily to oversee major repairs and stabilize finances.
The outcome could range from short-term stabilization under a court-appointed manager to a permanent transition of the system to a new operator, such as a neighboring utility or electric cooperative.
The case marks the first time the Commission has moved to take control of a municipal utility under a 2024 law that expanded its oversight authority.
