Mississippi Power files Kemper rate recovery plan

 

 

 

Kemper-Update-Logo_rgbA multi-year financing plan for Mississippi Power Co.’s Kemper County coal plant took two steps forward last week.

Gov. Phil Bryant signed bills that would give the Mississippi Public Service Commission authority to grant the utility permission to recover costs associated with the project over a number of years. Another bill allows Mississippi Power to issue bonds to pay for any project costs above $2.4 billion.

Each scenario was part of a settlement the utility and the PSC reached last month. As part of the agreement, commissioners lowered the hard cap on construction costs Mississippi Power could recover from ratepayers from $2.88 billion to $2.4 billion.

On the same day Bryant signed the two bills into law, Mississippi Power filed with the PSC a seven-year rate plan for the coal plant that would start in 2014 and run through 2020.

The company said the average increase in power bills for its 186,000 customers would be 20 percent, should commissioners approve the plan.

That’s on the low end of estimates made immediately after the January settlement, when they ranged between 20 and 28 percent. Last summer’s PSC order granting the project a second certificate of public convenience and necessity said rate increases would peak at 33 percent in 2014 before falling. The first certificate was invalidated by the Mississippi Supreme Court after justices ruled that the order granting it did not cite sufficient evidence from the record of proceedings that preceded its issuance.

January’s settlement also allowed the utility could again ask for rate increases related to the project after commissioners ruled last summer that they would not entertain them until the Mississippi Supreme Court had ruled on litigation surrounding the project. The settlement made no promises the rate increases would be approved.

The Sierra Club has long opposed the plant, calling it an expensive and unnecessary environmental hazard. The Mississippi Supreme Court approved the settlement in February, but has asked for briefs related to the constitutionality of the Baseload Act, the 2008 law that permits electric utilities to charge customers for generation plants as they are being built.

Hattiesburg resident Thomas Blanton, who is also a Mississippi Power customer, has challenged the law. Attorneys on each sides have until March 4 to submit briefs on the issue.

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