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Mississippi Power Co. and the Mississippi Public Service Commission have come to an agreement that allows the utility to ask for construction-work-in-progress funds for the Kemper County Coal plant.

MPC had appealed to the Mississippi Supreme Court over the summer after commissioners denied a request for a 13 percent rate increase that would have generated about $58 million in CWIP money. Commissioners said then they would not entertain anymore rate increases related to the plant until the state’s high court had ruled on the litigation surrounding the project.

In the settlement, commissioners made no promise that they would approve CWIP. Settlement terms also lowered the hard cap of the plant from $2.88 billion to $2.4 billion and provided ratepayers a 10 percent royalty share in the plant’s TRIG technology. It also stipulated that, in the event commissioners grant CWIP, that money would essentially be held in escrow, and would only flow to the company if the supreme court clears the way for the project to proceed. If that court strikes down the plant, the CWIP money would return to MPC’s 186,000 ratepayers.

Mississippi Power has 30 days to ask for revenue recovery, the amount of which cannot exceed $172 million.

Southern District Commissioner Leonard Bentz and Central District Commissioner Lynn Posey voted to approve the settlement. Northern District Commissioner Brandon Presley voted against it.

“I’ve stuck to my guns on $2.4 billion from the very beginning,” said Bentz, whose district includes the vast majority of MPC ratepayers. “Short of the sky falling, they won’t get one penny over $2.4 billion.”

Presley expressed concern that the settlement would still force ratepayers to pay for the plant before it was operational. MPC expects the plant to start generation in May 2014.

“It’s the same scenario I’ve had concerns over,” he said. “Ratepayers shouldn’t have to pay for something until it’s useful to them.”

Supreme court justices had scheduled for Monday afternoon a hearing on the dispute between MCP and the PSC. Even though Thursday’s settlement technically ends any disagreement between the two, justices could still decide to move forward with Monday’s oral argument. It was unclear if Thomas Blanton, a MPC ratepayer from Hattiesburg who has challenged the constitutionality of the 2008 law that authorized CWIP, would still get to argue that point Monday.

The head of the Mississippi Sierra Club, which has long opposed the plant and still has active litigation against it, said Thursday afternoon that the settlement does nothing to protect ratepayers.

“If the TRIG technology turns out to be useless, that’s not much of a deal,” said Louie Miller, referring to the ratepayers receiving 10 percent of TIRG royalties over 30 years. “Even Mississippi Power has said they’re not 100 percent certain that the plant’s technology will work on the first day of operation.”

Bentz said Thursday’s settlement could potentially lower the rate impact of the plant. He has said through the process that he expects rate increases to peak between 20 and 28 percent before falling.

“I think this will at least put rate increases at the lower end of that, possibly even lower,” Bentz said.

Mississippi Power filed documents with the PSC in 2009 that said rate impacts would peak at 45 percent. The PSC order granting the plant’s certificate of public convenience and necessity said rate increases would peak at a touch over 30 percent before falling.

Mississippi Power’s most recent rate impact estimates have fallen below that, with the company saying sales of the plant’s by-products have come in higher than originally thought. [Editor's note: Southern Co. officials said on an analyst call Friday morning that if the PSC grants the full $172 million in CWIP funds, it would raise MPC customer rates 21 percent.]

The settlement includes a phased-in rate plan that would run the first seven years the plant was in operation.  Common methods of rate recovery allow utilities to recover the bulk of costs up front. Spreading that out over seven years, Bentz said, would minimize the impact to ratepayers.

There was some question Thursday whether current statute allowed a phased-in rate plan, or if legislation would be required to authorize it.

The utility can opt out of the settlement if it is determined the PSC does not have the legal authority to implement a phased-in rate plan. If it’s determined there is a need for legislation to establish that authority, and the legislation fails to become law, the utility can opt out of the settlement.

The company can also opt out if it is unable to secure alternative financing for any project costs not otherwise recoverable by ratemaking proceedings.

MPC CEO Ed Day said in a press release that the settlement was “a win for both this state and our customers.”

The Business and Industry Political Education Committee’s annual Jobs Report Card for lawmakers, released Wednesday, contains few surprises.

For the most part, Republicans did better than Democrats. On the A-F grading scale, only two members of the GOP – Rep. Mark Baker from Brandon, and Sen. Briggs Hopson from Vicksburg – scored lower than an ‘A.’ Baker got a ‘C,’ and Hopson was given a ‘B.’

A handful of Democrats scored either ‘A’ or ‘B.’ Most, though, scored ‘C’ or worse. Baker getting a ‘C,’ which denotes average business support, could be an issue in determining if he runs against Attorney General Jim Hood in 2015. Baker, chairman of the House Judiciary A Committee, hasn’t confirmed or denied that he’ll seek the AG’s post in two years, but is one of perhaps a half-dozen Republicans considered likely challengers.

BIPEC graded lawmakers according to their votes on nine bills, all of which passed and were signed by Gov. Phil Bryant, during the 2012 legislative session. The selected legislation dealt with workers’ compensation reform, tax and insurance issues, establishing medical zones and the like.

To see the list of bills and how each lawmaker scored, click here.

Gov. Phil Bryant proclaimed on Wednesday that 2013 was the year Mississippi employers should do everything they can to hire veterans.

As part of the announcement at the Capitol, Bryant and officials from the Mississippi Department of Employment Security said they would back legislation that seeks to make it easier for veterans and their spouses to get jobs.

The bill, which will be filed by Rep. Wanda Jennings, R-Southaven, would require state agencies to grant temporary occupational licenses to qualified veterans and their spouses. For example, if someone is transferred to Naval Air Station Meridian, and their spouse is a nurse licensed in another state, the bill would expedite the process of getting a license to practice nursing in Mississippi.

It would also expedite the licensing process for veterans whose civilian career will mirror their jobs in the military.

The initiative will include three job fairs, the first of which is in March at the Mississippi Agriculture and Forestry Museum in Jackson.

MDES executive director Mark Henry said Mississippi will have in the next five years 28,000 veterans who have served in Iraq and/or Afghanistan since Sept. 11, 2001. The unemployment rate for veterans in the state, Henry said, is 10.8 percent, higher than the 7.8 percent overall rate.

On Wednesday, representatives from Ingalls Shipbuilding, Entergy Mississippi and Brown Bottling signed a pledge to hire Mississippi veterans. A similar movement is going on nationally, led by Walmart’s promise this week to hire 100,000 veterans in the next five years.

The job fairs associated with the Mississippi initiative are March 8 at the Ag Museum, April 9 at the Biloxi Civic Center and June 27 at Itawamba Community College’s Belden Center in Belden.

Video of Wednesday’s press conference, courtesy of the MBJ‘s Stephen McDill, is here.

The Hattiesburg City Council removed late last week one of the last major hurdles two breweries had to clear before they could get their product on shelves.

The council altered the city’s land use code to allow breweries in Hattiesburg’s downtown district. The old code would have allowed breweries, but would have also mandated they provide things such as parking areas similar in size to other downtown retailers.

John Neal, owner of Southern Prohibition Brewery, said the altered land code “just makes thing a lot easier on us.”

“Now we don’t have to have a whole bunch of parking that would be expensive to build and that we just wouldn’t have needed,” he said Monday morning. “We’ll have people come and tour the brewery, but nothing that would have justified having 50 parking spaces.”

Neal said he hopes to have Southern Prohibition beer on retail shelves by April. His 20-barrel brewery will sit in a renovated furniture warehouse. Gordon Creek Brewery, which will be right down the street from Southern Prohibition, is scheduled to start brewing next month, according to the Hattiesburg American newspaper.

Neal, who also owns craft beer bar the Keg and Barrel, said his operation will be a little different from the handful of breweries that have sprang up since July 1, when state law changed to allow the maximum alcohol content in beer made and sold in Mississippi to rise from 5 percent by volume to 8 percent by volume.

“We’re going to can our beers, which is kind of a new thing for the craft beer industry,” Neal said. “It protects the beer from light, gets it colder, and is generally just easier for the consumer to handle.”

Neal said business at Keg and Barrel is up 30 percent since July 1. He’s added 45 parking spaces and built an outdoor bar since then, he said. “I fought hard for the ABV law, but I had no idea it would have this dramatic of an effect on not just us, but everybody connected to craft beer.”

The firm state Treasurer Lynn Fitch hired to audit the Mississippi Prepaid Affordable College Tuition Program, or MPACT, identified 12 areas of concern, nine of which were related to the program’s pricing structure.

Fitch announced last fall that was suspending the state-backed college savings program, due to concerns she had over its financial condition. She hired Michigan-based Gabriel Roeder Smith and Co. shortly thereafter to audit it.

Fitch released the results, which she said made up Phase I, Friday morning, to go with her legislative agenda.

The first-term treasurer said GRS & Co. found the plan had a 43 percent of chance of reaching its 7.8 percent target rate or return. For fiscal year 2012, the rate of return was 1.10 percent. The estimated rate for fiscal year 2013, according to Fitch, is 4.98 percent. The plan, which has 22,000 enrollees and $274 million in trust, is currently is 76 percent funded. The last time it was 100 percent funded was 2000.

Auditors said that lowering the plan’s expected rate of return would drop the funding level into the low 70s, and increase the plan’s unfunded liability to more than $100 million.

Some of the preliminary recommendations auditors made were:

• Incorporate bias load into the pricing structure. For example, some participants pay a price based on average annual tuition at one institution, then attend an institution whose tuition is markedly higher, leaving a difference between what the participant paid in and what they received.
• Changing the way administrative expenses are paid in the pricing. Currently, administrative fees are captured by lowering the plan’s interest rate, which has contributed heavily, Fitch and auditors said, to its low rate of return.
• Allowing the plan to recover losses when the average price of tuition rises. Currently, there is no way to do that when tuition increases are higher than assumed over periods that are hover close to the participation period.

Fitch said the next phase of the audit would be completed within 90-120 days. “This will not be a quick turn. It will take some patience.” She said those already participating in the plan would receive their designated benefits.

Ten states have already permanently closed similar programs, something Fitch said “would be an option” for MPACT. “This is the fault of no one, “she said. “It’s strictly an economic issue.”

The highlight of Fitch’s legislative agenda was the implementation of a statewide financial literacy program, which would require high school sophomores, juniors and seniors to take a one-semester course that taught the particulars of using credit, budgeting, managing money and making wise financial decisions. The cost in the first year of the program, Fitch said, would be about $5 million. That would likely decrease over time, she said.

Rep. Steve Holland, D-Plantersville, filed during the 2012 legislative session a bill that would have renamed the Gulf of Mexico the Gulf of America.

Holland said then that he did it to highlight what he felt was the absurdity of the agenda being pushed by the new Republican majority.

Holland took no small amount of flak for the bill, which died in the Universities and Colleges Committee. The GOP accused him of failing to concentrate on serious issues. Whatever the reason Holland had for filing the legislation, its idea became a popular notion. Gulf of America twitter accounts appeared. Holland was a guest on a Houston, Texas, radio show, though it was a short and fairly tense interview that ended when Holland hung up on the host.

The movement that sprang up around the bill will not return this session. Holland said Wednesday morning that he will not re-file the bill.

“The stupid people up here totally misunderstood it,” he said in a phone interview.

Holland said his 2013 legislative agenda would be narrowly focused, and consist of “three or four local bills” geared toward his district in Northeast Mississippi. That’s a sharp contrast to prior sessions, when his list of bills has been robust.

“I’ve been down here for 30 years fighting for things that actually mean something for Mississippians,” Holland said. “Now the only thing that gets any attention is mediocre (expletive).”

Lt. Gov. Tate Reeves will support a bond bill that addresses long-term capital needs, charter schools should be allowed to locate wherever parents want them, and the Mississippi Development Authority needs more legislative supervision over how it spends money out of its revolving loan fund.

Reeves touched on those topics and a few others Monday during the Stennis Capitol Press Corps luncheon in Jackson.

The Republican has taken criticism, including from some in his party, since the last legislation session ended without the passage of a bond bill, the first time that’s happened in as long as a lot of legislative veterans can remember.

The first-term lieutenant governor repeated Monday what he’s said for a couple months: He can get behind a bond package “reasonable and rational in size” that pays for long-term capital needs instead of things that should be funded through the normal appropriations process. He listed local system bridge programs, and repairs and HVAC systems for state buildings as things that have historically been bonded, and that are a big reason why the state pays $430 million annually in debt service.

“If it does not meet those criteria, I cannot support” a bond bill, Reeves said.

Reeves also reiterated his support for charter schools in every district where enough parents want to form one. Who can trigger the charter law was a sticking point in last year’s session, with splits forming among those who held views similar to Reeves’, and those who wanted charter schools only in districts rated as unsuccessful or failing.

There will be another bill this session aimed at lowering the ceiling for which the MDA can spend out of its revolving loan fund without legislative approval. Currently, the MDA can spend up to $468 million before having to ask lawmakers’ permission. The fund is used to help economic development prospects with costs related to coming to Mississippi.

Last year, a bill passed the Senate that would have lowered the limit from $468 million to $50 million. It died in the House Ways and Means Committee when chairman Rep. Jeff Smith, R-Columbus, did not bring it up for a vote.

“I do not believe the Mississippi Development Authority ought to have $468 million to spend on whatever project they want to spend it on,” Reeve said.

Reeves affirmed his opposition to the expansion of the state’s Medicaid program under the Affordable Care Act, and said there would be no “serious, significant discussion” about it until the federal government clarifies certain rules. Particularly, Reeves said, states who opt out of the Medicaid expansion need to know if disproportionate share payments – made to hospitals that write off the cost of large amounts of treatment to indigent patients – will remain or be eliminated.

The 2013 session gavels to a start Tuesday at noon.

Randy Knight was elected in early December to his third term as president of the Mississippi Farm Bureau Federation.

Like most heads of advocacy organizations, Knight is finalizing Farm Bureau’s agenda for the upcoming legislative session, which starts Jan. 8.

Near the top of the legislative wish list is making sure no changes are made to the state’s animal cruelty law, which was passed in 2011 after a compromise between Farm Bureau and animal rights groups. It makes a second offense a felony.

“We’d love to see that compromise upheld,” Knight said.

Legislation legalizing deer farming, an issue packaged as a one that will drive economic development by attracting out-of-state hunters to deer farms, has failed the past few sessions. Allowing it would endanger livestock, Knight said.

“It carries significant risk of disease.” Deer farming is legal in 33 states.

Also on the legislative agenda is some kind of reform to the state’s cattle theft laws. According to 2011 numbers provided by Mississippi State University’s Extension Service, an average of 250 cattle are stolen per year. That number could rise, with droughts in Texas and the Midwest shrinking the U.S. cattle herd and driving up prices.

It involves more than rustlers stealing cows out of a pasture, Knight said. Buyers at sale barns can pose as legitimate cattle companies and make off with truckloads of cows because they’re allowed 48 hours to tender payment. Any legislation would have to protect sellers, Knight said.

Knight said his primary mission for Farm Bureau itself will be to grow the federation’s membership. He said the number of member families in 2012 exceeded 200,000 for the first time since Hurricane Katrina.

“Our emphasis is educating the general public on what Farm Bureau does,” Knight said. “If people knew how we stood up for them in the Legislature and in Washington, more people would want to be a member of Farm Bureau.

“And we’re always growing our education process,” Knight continued. “If we don’t tell our story, and what we’re doing on the farm and how we’re taking care of our animals, somebody else is going to tell it for us. And it won’t be told the right way.”

Rep. Kevin McGee, R-Brandon, resigned from the Mississippi House of Representatives Monday as part of a deal with the Mississippi Ethics Commission.

The Ethics Commission found in February that McGee had violated ethics laws after a printing company owned by his family had received almost $350,000 in state contracts while he was a House member. McGee no longer works at the printing company. McGee’s settlement with the Ethics Commission, which came more than a year after the case opened, included a $10,000 fine.

His old district, House District 59, is entirely within Rankin County. Gov. Phil Bryant will set a special election to fill McGee’s seat.

One name that emerged as a possible candidate Monday night is Bradley Lum. Lum is a partner in a new management firm, and a former teacher and coach at Brandon High School and Hinds Community College. He graduated from Ole Miss, where he played baseball.

Reached on his cell phone Tuesday morning, Lum would only say that he was considering a run.

Whoever wins would be in a reliably Republican district, and would hold what’s considered one of the safer seats in the Legislature. McGee first won election in 2007. He ran unopposed in 2011.

The Mississippi Business Journal first told you of The Ethics Commission’s investigation of McGee in October 2011. That story can be read here.

This week’s issue of the Mississippi Business Journal has a story in it about Crooked Letter Brewery, whose owners hope to be up and running this fall.

The Jackson County brewery would be Mississippi’s second, joining Hancock County’s Lazy Magnolia Brewing Co. (The Keg and Barrel in Hattiesburg is a brewpub, the only of its kind in the state.)

Crooked Letter CEO Wanda Blacksmith and her husband Paul, the brewery’s GM, said they had planned to open a brewery before Raise Your Pints and others were successful in their push to reform Mississippi’s beer laws. The Blacksmiths did say, though, that the new laws that raised beer’s alcohol content and allowed breweries to exceed that limit in beer sold out-of-state would help.

Crooked Letter got another bonus last Thursday, when Gov. Phil Bryant signed a bill that allows breweries to offer samples to customers who tour their facility. It was yet another piece of the craft beer crowd’s legislative agenda. It didn’t make the Crooked Letter story, because the news of Bryant’s signature didn’t arrive until the MBJ’s printing presses were running.

The samples, according to the law, have to be made by the brewery offering them, and cannot exceed six ounces. No one person can have more than six at a time. The samples have to be consumed on the brewery’s premises, and can only be offered between 8 a.m. and 10 p.m. Obviously, the law requires that tasters be at least 21 years old.

Breweries also have to maintain records of how many and what kind of samples they offered, though there doesn’t seem to be any language that requires auditing of those records by a state agency.

Like the other new statutes, the brewery samples bill takes effect July 1.