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PSC chairman blasts Mississippi Power aircraft spending during rate hearings

HQ: Mississippi Power had to answer tough questions from the Mississippi PSC Tuesday as it seeks a 4.6 percent rate hike. Photo by Steve Wilson

Mississippi Public Service Commission chairman Brandon Presley grilled Mississippi Power officials about the company's spending on private aircraft and its credit rating during a rate hearing Tuesday.

The company is asking for a total rate increase of 4.6 percent for customers in both of its annual filings for its performance evaluation and environmental compliance plans. Those figures were reduced over what the company required in its November filing before the passage of the Trump administration's tax cut package, which lowered the nation's corporate tax rate from 35 percent to 21 percent.

The PEP plan covers the utility's capital costs such as transmission lines, substations and generating plants plus staff costs.

The commission voted to take both matters under advisement and receive post-hearing briefs from both the Public Utilities Staff and the company.

The exchange was ignited when one of Mississippi Power's attorneys, Ricky Cox, objected to the staff adding its comments to the rate case proceeding since they hadn't entered any witnesses, testimony or documents during the discovery period before the rate hearing.

Presley wanted to get an opinion from the staff, which is a separate regulatory agency from the commission, on Mississippi Power's credit rating and the rate plan the company says it needs to get back in the good graces of the ratings agencies.

The exchange made it clear that rancor still exists between the commission and Mississippi Power after the sometimes contentious negotiations over a settlement with the Kemper Project clean coal power plant, which is now generating power on natural gas.

Presley repeatedly asked Mississippi Power chief financial officer Moses Feagin why the company felt that $3.3 million in corporate jet costs should be paid by the utility's 186,000 ratepayers in south Mississippi. The utility's parent firm, the Southern Company, owns four Lear Jet aircraft based in Birmingham, Ala. and Atlanta for the use of executives from all of its subsidiaries.

Feagin said that all of the trips were on behalf of Mississippi Power customers while conducting the business of the company.

Presley wasn't satisfied with the answers about what Mississippi Power does with its share of its parent company's aircraft, which Feagin said are used to ferry executives to meetings. He also said the company does take commercial flights.

"I want to make sure I take advantage of these witnesses on the stand and make sure we get answers to these questions that Mr. Cox so eloquently objected to us trying to get information into this record," Presley said. "We'll get the information in the record. It can become a contested proceeding, we'll get to that."

Presley asked Feagin if he would approve of the use of ratepayer funds to pay for the flights. Feagin said the costs were considered reasonable and prudent under law, even if he didn't work for the company.

Presley called the number of planes "an air force."

After some more discussion, the issue flared up again when Presley overruled the company's objection. "Here's what we're going to do. We're going to hold that out (the staff's input on the credit rating agencies) since the company has such an objection with us hearing from the staff in a public meeting.

"I vehemently can't understand, don't talk about the issues out if you're going to object to getting the issues and opinions out."

Presley has sent the company a letter on Wednesday asking them to remove the flight expense from their request.

Earlier in the day, the commission approved two pass-through rate hikes for Mississippi Power customers that will add up to $1.03 per month for a 1,000 kilowatt hour per month customer for property taxes — which doesn't include the Kemper Project — and for energy efficiency measures. 

The commission also approved issuing an request for proposal on a study on how much utilities can collect from customers who elect to generate their own power via net metering. The study will be paid for by the utilities.

Another RFP approved by the PSC was for a firm to conduct a review of Mississippi Power's business practices and generation capacity to determine whether the company could stand to cut its operations expenses. The commission will begin a policy of conducting a third-party evaluation of the state's two investor-owned utilities every time they submit a rate case.

This story was changed to reflect PSC Chairman Presley’s letter to Mississippi Power

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