Mississippi Power wants rate hike, mainly for Kemper plant
Published: November 17,2011
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GULFPORT — Mississippi Power Co. has filed documents with state regulators for a net rate increase of 11.35 percent.
The company says customer impact will vary with electricity usage.
Company spokeswoman Cindy Duvall says Mississippi Power made three separate filings late Tuesday to the Public Service Commission.
Duvall says two were for increases and one was for a decrease in fuel costs. The majority of the increase is for the coal-fired generation plant under construction in Kemper County.
The 582-megawatt plant near the Liberty community will use a process that converts coal into a synthetic gas and generates electricity with fewer emissions than existing pulverized coal power plants. The plant is expected to be in operation in 2014.
Last year, the Mississippi Public Service Commission approved the company’s proposal for the Kemper County project. Ground was broken in December. In approving the plant, the PSC set a cost cap at $2.88 billion.
A 2008 state law allows the cost of building the plant to be passed on to ratepayers in stages as it is being constructed.
“This is the financing cost while the project is under construction,” Duvall said. “These costs are being covered up front. It would be significantly higher if we waited until the plant is completed.”
The PSC will decide if and when the price increases go into effect.
“The Kemper project is on schedule and progressing well. When completed, this plant will generate electricity for customers at a significantly lower cost than any of the alternatives,” said Vice President of Generation Development Tommy Anderson.
In addition, Mississippi Power has requested a 2.20 percent decrease in the amount it recovers in its annual fuel filing. Mississippi Power’s fuel costs are recovered from customers on a dollar-for-dollar basis. The company does not earn a profit on the fuel used to generate electricity.
Pending approval, these changes will go into effect in 2012. Mississippi Power, a Southern Company subsidiary, serves approximately 188,000 customers in 23 southeast Mississippi counties.
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