The Mississippi House of Representatives passed Friday morning legislation that would allow Mississippi Power to issue bonds, up to $1 billion, to cover costs over $2.4 billion for the Kemper County coal plant. Representatives also approved a bill that would give the Mississippi Public Service Commission authority to set a multi-year rate recovery plan for the plant once it becomes operational.
The vote on the bond bill was 90-26 after about an hour of discussion. The multi-year rate recovery plan bill passed 100-17 with no discussion. Both were held on a motion to reconsider, a procedural move that usually serves only to temporarily delay legislation’s forward movement.
Both bills were in response to a settlement reached last month between the utility and the PSC that lowered what the company could include in the project’s rate base from $2.88 billion to $2.4 billion. The bonds would cover anything over the cap.
Rep. Sherra Lane, D-Waynesboro, offered several amendments to the bond bill that would have prohibited Mississippi Power from collecting any costs incurred before the passage of the legislation, limited what the company could place into the bonds and changed the procedural mechanisms the bond requests would meet at the PSC. She said any decision about cost overruns should lie with the PSC, not on lawmakers.
“This settlement put the $1 billion fee on the Legislature. If the Public Service Commission wants to do that, they have the power to do that.”
The amendments failed. “The more things the company is willing to put into (the rate recovery bonds), the less they can earn on a rate of return,” House Public Utilities Committee Chairman Charles Jim Beckett, R-Bruce, said in opposing the amendment. “The company doesn’t earn a rate of return on the bonds. Issuing the bonds will cost ratepayers less than including these costs in the rate base.”
Rep. Kevin Horan, D-Grenada, offered an amendment that would have limited to $500,000 attorneys’ fees related to issuing the bonds. It passed.
“This bill is fundamentally unfair to every member of the Legislature,” Horan said, echoing Lane’s assertion that the PSC should grapple with whether to allow cost overruns, not lawmakers. “This is a shame.”
Mississippi Power spokesperson Cindy Duvall said in a statement that Friday’s vote “takes us one step closer to saving Mississippi Power customers $1 billion or more.”
The coal plant is scheduled to begin commercial operation in May 2014.