So, last week MPC filed documents with state regulators — the Public Service Commission — for a requested rate increase of 11.35 percent. The Commission has the ability to deny MPC’s request. If approved, the increases will go into effect in 2012.
MPC officials said last year that rates could go up about 33 percent. That was after they filed a document with the Commission saying rates would go up about 45 percent.
Company spokesperson Cindy Duvall says MPC made three separate filings with the Commission, and the majority of the requested rate increase is due to the Kemper plant, which is under construction.
The plan represents a huge financial risk for MPC’s 188,000 customers in southeastern Mississippi.
The mechanism that allows MPC to charge its ratepayers for the financing cost of the facility as it’s being built — known as Construction Work in Progress Financing — is particularly unnerving. It shifts most of the risk to the power company’s customers.
Also, the technology the plant will use to generate electricity is new and unproven on a commercial scale.
In interviews with the MBJ, officials with MPC wouldn’t even guarantee that Kemper’s technology would work.
Yet, here we go. Now MPC asks for an 11.35 percent rate increase for customers, and — due to a state law called the Baseload Act — MPC is under no obligation to refund its customers if the plant doesn’t work.
Even if it does work, the increases in rates over time will have been much more than if MPC had relied on a much less expensive natural gas option.
What part of this equation adds up to a help for businesses and individual customers served by MPC?
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