Archive for the ‘Mississippi Power Company’ Category

Tornado clean-up starts in Hattiesburg, Petal

February 11th, 2013 No comments

The clean-up from Sunday’s tornado in Hattiesburg and Petal started Monday morning.

The storm hit during mid-afternoon, caused extensive damage to residential areas and business districts and to the campus of University of Southern Mississippi.

Almost 100 injuries had been reported, but no deaths. More than 300 buildings had some degree of damage, a lot of it major, according to emergency officials.

Mississippi Power Co. said as of Monday morning, 4,000 of its customers were without electricity, and 100 power poles were broken.

In a news release, Mississippi Power Pine Belt division manager Jason Lee said at its peak Sunday, 13,000 customers had no power. More than 300 of the company’s linemen, engineers and tree-removal crews were on the ground.

“We are working on the hardest hit areas first,” Lee said, “which has been challenging due to the continuous rain, wind and scattered debris blocking access to troubled areas.”

Monday’s forecast for the Hattiesburg area called for rain to continue through most of the daylight hours.

The Salvation Army also started setting up feeding and relief stations in Petal and Hattiesburg.

Six mobile units were active by 11 a.m. Monday:

* Petal Harvey Baptist Church

* The Highway 49/Hardy Street intersection

* Forrest County Multi-purpose Center

* A roving unit in Oak Grove

* Lowe’s parking lot on Hardy Street

* Residential areas east of the USM campus

Donations are accepted at or by calling 1-800-SAL-ARMY. You can also text “Give” to 80888.

House passes Kemper bond, rate recovery bills

February 8th, 2013 2 comments

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.

Kemper rate mitigation bill similar to 2009 Georgia law

January 31st, 2013 No comments

Kemper-Update-Logo_rgb-300x244Four years ago, lawmakers in Georgia’s General Assembly approved a bill designed to lessen the rate shock for Georgia Power Co. customers related to the utility’s construction of nuclear power units.

Mississippi lawmakers are considering a similar bill for Mississippi Power Co.’s Kemper County coal plant.

The Georgia legislation, which former Gov. Sonny Perdue signed in 2009, allowed Georgia Power  – which, like Mississippi Power, is a subsidiary of Southern Co. – to pass to ratepayers financing costs incurred to build two additional nuclear units at an existing generation plant in the southeastern part of the state.

Starting in January 2011, the law gave Georgia Power five years after the Georgia Public Service Commission approved the project to recover the costs. The law established the financing recovery schedule  separately from the rate base that collected construction work in progress funds. In Georgia, the recovery of CWIP is mandatory.

Georgia Co. officials said while the bill made its way through the statehouse in 2009 that paying financing costs for the $14 billion project as they were accrued would save customers in the long run. The two new units are scheduled to begin producing electricity by 2017, according to recent company projections.

A couple things separate the Georgia law and the proposed legislation here. Georgia’s rate mitigation statute established a five-year recovery window. The Mississippi plan creates a 10-year window, and prohibits the utility from filing to activate the plan until 12 months prior to the calendar year in which the qualifying facility is scheduled to begin operation.

The Kemper plant is supposed to come online in May 2014. That means Mississippi Power can request the plan if and when the law clears the Capitol and is signed by Gov. Phil Bryant.

The Georgia law established a rate schedule specifically for the recovery of financing costs, since the recovery of CWIP was already mandated. The legislation that has cleared the Mississippi Senate’s Energy and Finance committees does not restrict CWIP or financing costs from being included.

The hard cap on the Kemper costs Mississippi Power can recover through ratemaking proceedings at the Mississippi Public Service Commmission was lowered last week from $2.88 billion to $2.4 billion, as part of a rate settlement between commissioners and the utility. A bill that would permit Mississippi Power to issue bonds for overruns – up to $1 billion – sits in the Senate Energy and Finance committees.

Sierra Club: Poll shows customer opposition to rate hikes via Kemper coal plant

January 30th, 2013 4 comments

The Sierra Club was supposed to release last Thursday the results of a poll meant to gauge Mississippi Power Co. ratepayers’ attitudes toward the Kemper County coal plant.

The environmental group delayed the results because of a hearing in which the Mississippi Public Service Commission reached a rate case settlement with the utility.

The delay ended Wednesday morning. The poll, conducted by Fondren Strategies, surveyed by landline and mobile telephone 400 respondents that a press release says were certified to be Mississippi Power customers.

The results say 65 percent of those polled said the possibility of their electricity rates going up approximately 33 percent once the plant is finished erodes their support of the project. About 75 percent of respondents say cost overruns should be paid by utility shareholders.

The poll’s margin for error is 4.9 percent.

Mississippi Power has already filed to recover $172 million in financing costs associated with the project. The filing came one day after last week’s settlement, which lowered the maximum cost recoverable via PSC ratemaking proceedings from $2.88 billion to $2.4 billion.

If the PSC grants the $172 million recovery request, Mississippi Power says rates will go up an average of 21 percent, starting in April and lasting through 2013, for customers who use an average of 1,000 kWh per month.

The project’s overall rate impact, the company said on an analyst call Friday, will hover around 25 percent.

The Sierra Club has opposed the plant since its inception in 2009, calling it an expensive and unnecessary environmental hazard. The club has called for the plant to be converted to a natural gas-fired facility, which it says is cleaner than the lignite coal the plant will eventually use.

The project is on time for a May 2014 completion, Mississippi Power said recently.

The Sierra Club’s entire poll can be seen here.

Whether CWIP constitutes a tax takes up most of Kemper hearing

January 28th, 2013 No comments

Most of Monday’s hour-long Kemper coal plant hearing at the Mississippi Supreme Court centered on two questions:

If the Mississippi Public Service Commission allows Mississippi Power Co. to charge its ratepayers for the facility’s construction, will it constitute a tax, or will it simply be a rate assessment?

If it is a tax, does it render the Baseload Act unconstitutional?

Mike Adelman, an attorney who represents Thomas Blanton, says the Baseload Act – a 2008 law that authorized utilities, with PSC permission, to collect construction-work-in-progress funds from ratepayers – is unconstitutional because it violates the Constitution’s 14th Amendment, which prevents confiscatory taking of property without due process.

“It’s a tax on electricity that has not yet been provided,” said Adelman, whose client is a Hattiesburg resident and one of Mississippi Power’s roughly 186,000 ratepayers.

Blanton’s claim was originally part of the rate dispute between commissioners and Mississippi Power. The dispute arose over the summer when commissioners denied a 13 percent rate increase that would have generated about $58 million to put toward the coal plant’s construction. Commissioners said then they would not entertain anymore rate increase requests related to the plant until the Mississippi Supreme Court had ruled on litigation brought against the plant by the Mississippi Sierra Club. That litigation is separate from Monday’s proceedings.

The PSC’s stance changed last week, when commissioners and Mississippi Power Co. agreed to a settlement whose terms will allow the utility to ask for CWIP recovery in exchange for the hard cap on the project being lowered from $2.88 billion to $2.4 billion, and ratepayers being granted an ownership share in the plant’s TRIG technology.

Adelman, in his argument against the Baseload Act, equated CWIP with a tax, something he said the PSC does not have authority to levy. Even if lawmakers intended to convey that authority in the Baseload Act, Adelman said, the language in the law does not do that.

The law essentially forces Mississippi Power customers to become investors in the project, Adelman said.

“There is a recognized constitutional right – a right that is recognized by this court – that rates cannot be assessed for power that is not being delivered,” Adelman told the seven justices. Chief Justice Bill Waller Jr. and Associate Justice Leslie King were not in attendance.

Mississippi Power attorney Ricky Cox said that law allows for utilities to increase rates for “used and useful” services. “And CWIP is a used and useful service,” he told the court.

“These facilities (which are eligible for CWIP funds) have unique characteristics,” Cox said. “They run 24 hours a day and provide dependable power. That’s the benefit customers are getting.”

Blanton’s argument that the Baseload Act is unconstitutional is moot and should be dismissed, Cox said, because the Baseload Act has not been applied.

Justin Matheny, representing the PSC, echoed Cox’s assertion that ratepayers do receive a tangible benefit in exchange for paying CWIP.

“In this case, they’re helping to build a new plant and helping to continue to provide electricity into the future.”

The small amount of back and forth between justices and lawyers related to the original rate dispute centered on whether the settlement was final, and rendered the case closed.

Presiding Justice Jess Dickinson during the hearing expressed skepticism that it was, since the settlement kicked proceedings back to the PSC. Any dispute arising out of the new proceedings, Dickenson said , would likely land back before the high court.

Justices will issue a written decision, something Dickinson told lawyers he hoped would happen soon.

Miss. Power, new settlement in hand, files for recovery of $172 million in Kemper costs

January 25th, 2013 4 comments

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.

Baseload Act challenger hopes high court hearing moves forward in wake of settlement

January 25th, 2013 No comments

Thomas Blanton’s lawyer hopes Thursday’s Kemper rate case settlement between Mississippi Power Co. and the Mississippi Public Service Commission does not kill his client’s opportunity to air his grievances against the Baseload Act before the Mississippi Supreme Court.

The high court had scheduled oral argument for Monday to hear a dispute between MPC and the PSC over rates for the project. The two entities settled that dispute Thursday, in an agreement that lowered the amount the utility can charge its ratepayers for the project from $2.88 billion to $2.4 billion. The disagreement arose over the summer, when commissioners denied a 13 percent rate increase that would have generated about $58 million. Commissioners also said then they would not entertain any more rate increase requests related to construction-work-in-progress money for the coal plant until the Mississippi Supreme Court had ruled on the litigation surrounding it.

The agreement, which allows MPC to ask anew for CWIP funds, still must gain supreme court approval. Justices could still force the parties to appear Monday, or they could cancel the hearing.

Blanton, a Hattiesburg resident, has challenged the constitutionality of the Baseload Act, the 2008 law that granted utilities the authority to ask for CWIP funds. His attorney said Friday morning that he hopes to still be able to argue that point Monday.

“If anything, it strengthens my client’s argument,” Adelman said, referring to Thursday’s settlement. ”It’s based on a statute that’s unconstitutional. I don’t understand what basis there is for the commission to change their position, when they said specifically they were going to deny the rate increase until there was a decision by the Mississippi Supreme Court.”

Attorneys for the PSC and MPC on Friday morning filed motions with the supreme court asking justices to dismiss the rate dispute and Blanton’s claim. Adelman filed a motion to oppose the dismissal. The court had not decided as of early Friday afternoon whether to proceed with Monday’s hearing, which was still scheduled to begin at 1:30 p.m.

Rate case settlement lowers Kemper cost cap (Updated with rate info)

January 24th, 2013 No comments

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.”

Miss. Supreme Court to hear Kemper arguments Jan. 28

January 21st, 2013 No comments

The Mississippi Supreme Court will hear oral argument Jan. 28 related to the Sierra Club’s ongoing legal opposition to Mississippi Power Co.’s Kemper County coal plant.

The hearing, which will start at 1:30, will center on this question: Why should the (MSSC) not reverse the Public Service Commission for its failure to hold the rate case in abeyance until the case of Sierra Club v. Mississippi Public Service Commission currently on appeal in Harrison County Chancery Court is finally decided?

Attorneys for MPC will have six minutes at the beginning to respond to the question. Attorneys for the PSC will have six minutes to do the same immediately afterward.

Attorneys for Thomas Blanton, a Hattiesburg resident who has challenged the constitutionality of the Baseload Act, will then have 20 minutes to make their case against the 2008 legislation that authorized utility companies to pass construction costs on to ratepayers before the generation facilities they were building were operational.

The hearing will conclude with MPC and PSC splitting 20 minutes to respond to Blanton.

The Sierra Club has fought the coal plant from its inception, calling it an expensive and unnecessary environmental hazard. Mississippi Power has said it’s the best way to ensure long-term availability of economical power for its nearly 200,000 ratepayers.

Monitors: Kemper project cost could come in under cap

January 18th, 2013 5 comments

The latest report from the independent monitors the Mississippi Public Service Commission hired to evaluate the Kemper county coal plant shows the project may come in under the $2.88 billion cap.

In its December report, filed with commissioners in early January, URS says Mississippi Power estimates the plant will cost $2.84 billion to build, about $44 million less than the cap the PSC imposed on the project. The filing says the plant is between 70 and 75 percent complete, and that it will, according to MPC, begin commercial operation in May 2014, the original target date.

That lines up with URS’ November report, which estimated there was a 72 percent chance the project would cost $2.88 billion or less.

In its December filing, URS does express concern about different pieces of the construction having to be reworked, due to noncompliance by contractors or design flaws. Monitors also said it was possible the conversion to union labor could increase costs. Union leadership told the Mississippi Business Journal late last year that there would be no significant increase in construction costs due to union workers being hired. The Central Mississippi Building and Construction Trades Council and the Mississippi chapter of the AFL-CIO struck a deal with Southern Co., MPC’s parent, to provide workers for the project.

The cost and timeline estimates in URS’ latest report are different than what was included in the last report filed by monitors hired by the PSC’s Public Utilities Staff. Burns and Roe said in its Nov. 26 filing that there was a 90 percent chance the coal plant’s cost would fall somewhere between $3 billion and $3.15 billion, which has been its estimate for several months. Burns and Roe added that there was an 80 percent chance the plant would begin operation on or before Dec. 20, 2014; a 50 percent chance it starts on or before Nov. 29, 2014; and a 20 percent chance the same happens by Nov. 6, 2014.

Mississippi Power spokesperson Jeff Shepard told the MBJ late last year that the company anticipates the plant’s cost coming in at $2.88 billion or under, and that it will start producing electricity on a commercial scale in May 2014.

The Kemper facility is still the subject of litigation between Mississippi Power and the Sierra Club, which opposes the project. A Harrison County chancery judge ruled for the project late last year, after the Sierra Club had challenged the validity of the second certificate commissioners had issued it. Lawyers for the environmental advocacy group have already appealed that decision to the Mississippi Supreme Court.

Commissioners ruled over the summer that they would not entertain any rate increase requests related to the project until the state’s high court had its say on the matter. That decision came after Mississippi Power had asked for a 13 percent rate increase that would have generated about $58 million.