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.