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Regulators want Kemper Project settlement by January after public hearing process

The Mississippi Public Service Commission wants a settlement in the fight over the $7.5 billion Kemper Project clean coal power plant by its January 16 meeting.

The PSC will issue an order this week that will enact a schedule for negotiations on the record after the parties have had 63 days on their own to conduct their own behind closed doors.

"We've got a process where the filings will be made before the commission itself," said Southern District Commissioner Sam Britton. "We'll look to have a decision before the first of January. It gives all parties time to file what they believe is necessary and keep things as open as possible to speak to their opinions."

PSC Chairman Brandon Presley said the commission wants to know why the parties couldn't come to a settlement and receive explanation from both sides with testimony and evidence.

"It's like a parent says 'Y'all go work it out amongst yourselves and if you don't, we'll do it for you,'" Presley said.

Last week was the deadline — extended by a PSC order — for the Public Utilities Staff, the company and intervenors such as Chevron and Walmart to come to a settlement. Both sides filed settlement proposals, but a final settlement offer by the staff and backed by the intervenors was rejected by the company.

One of the sticking points was between $150 million and $200 million in capital costs on the part of Kemper — the power generating turbines and associated equipment generating power on natural gas since August 2014.

The other hurdle has a bigger dollar value. The staff wanted the company to pass on regulatory costs such as legal fees and other expenditures over a five-year span and reduce the 15 percent rate hike passed in December 2015 by the outgoing commission. The company wanted to maintain the same 15 percent rate hike for 20 years.

NO GASIFIER: The Southern Company will write off $6.5 billion in costs on the gasifiers that convert lignite coal into synthesis gas for the Kemper Project. Photo by Mississippi Power

Now the parties will conduct the negotiations on the record. The PSC will hold a pre-discussion hearing on September 28 and will host hearings on the different proposals on December 4 at 9 a.m.

Between now and then, the parties will have several deadlines to meet as the commission tries to bring the negotiations to a close.

The first deadline is October 9 for the parties to submit testimony and evidence on why their proposal should be considered and why the other is unacceptable. The next deadline is October 16 for rebuttal testimony.

Presley said that the parties are free to continue negotiating during the hearing process and negotiate a settlement subject to the commission's approval without going the distance into January. "They could come out of here in five minutes and have a settlement and we can close this thing right now," Presley said. .

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