Miss. Power, new settlement in hand, files for recovery of $172 million in Kemper costs
Thirty hours after it reached a rate settlement with the Mississippi Public Service Commission, Mississippi Power Co. announced it has filed to recover $172 million in financing costs for its Kemper County coal plant.
The $172 million was the maximum allowed for 2013 under the terms of the agreement, which solved a dispute that started when commissioners denied over the summer a 13 percent rate increase that would have generated roughly $58 million. Commissioners said then they would not consider any Kemper-related rate increase requests until the Mississippi Supreme Court has ruled on the litigation surround the project.
Should the PSC grant the recovery – and the terms of Thursday’s settlement said there was no guarantee that would happen – electricity rates for Mississippi Power’s 186,000 customers would go up an average of 21 percent. The company said in a press release that would represent an increase of less than $1 per day for the rest of 2013 for customers who use an average of 1,000 kWh per month.
With the new settlement in place, Mississippi Power anticipates the overall rate impact for the plant to hover around 25 percent.
“This is well under the increase we had anticipated and significantly lower than what opponents to the project claimed,” company CEO Ed Day said in the release, issued just after 6 Friday evening.
In a 2009 filing with the PSC, Mississippi Power said the rate increases associated with the plant would peak at 45 percent. In last spring’s PSC order granting the plant a certificate of public convenience and necessity, rate increases were expected to peak at just more than 30 percent in 2014, when the plant is scheduled to begin commercial operation, before falling.
According to the company, the plant is nearly 75 percent finished. If commissioners approve Friday’s filing for cost recovery, the rate increases would take effect in April.
Despite Thursday’s agreement between the utility and commissioners, the Mississippi Supreme Court ruled Friday afternoon that the oral argument related to the original rate dispute would proceed as scheduled Monday at 1:30 p.m.