KEMPER COUNTY — Mississippi Power Co. CEO Ed Holland has told a Mississippi newspaper that if a 22 percent rate hike is approved to pay for its Kemper County power plant, the company won’t try to hit up customers for more.
Holland told The Clarion Ledger in a meeting yesterday that shareholders will eat hundreds of millions in cost overruns under that scenario.
The newspaper says opponents of the plant said they don’t believe any of the company’s projections, and that drastic power bill increases for years to come will likely pay for the plant. Projected costs for the plant have risen from $2.4 billion to $4.7 billion as it nears completion, expected next May.
The Public Service Commission capped what ratepayers can be charged for the plant at $2.88 billion, but lawmakers passed a bill this year allowing Mississippi Power to issue up to $1 billion more in bonds for the plant that customers would also pay off, although the company can’t turn a profit on ratepayers on this portion.
The plant will use a soft form of coal called lignite, mined nearby, to generate power in a process the company says will be cleaner than traditional coal or natural gas plants.
“We will not come back to the commission for more rate increases for the Kemper plant,” if the 22 percent is approved, Holland said during a meeting with The Clarion-Ledger.
“Is it a good decision for customers at $4.7 billion? Probably not. Is it a good decision for customers at $2.88 billion? Yes, and that’s what they’re getting it for . If (MPC parent Southern Co.) didn’t believe in this technology, they would not be taking the nearly $1 billion hit.”
Mississippi Sierra Club director Louie Miller was flatly skeptical.
“I don’t believe a word they say because everything they’ve said has proven to be untrue,” Miller said. “Unless they use Enron accounting, there’s no way a 22 percent increase is covering the interest on it, with 189,000 customers. They are simply not telling the truth, again.”