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Mississippi Power reveals new strategy to reach Kemper Project rates deal

INVESTMENT: The Southern Company has already written off $6.5 billion in Kemper Project costs. Photo by Mississippi Power

In a filing with the Mississippi Public Service Commission Friday, Mississippi Power revealed its new strategy for reaching the deal it wants in order to cover costs on the parts of the Kemper Project already in service.

The strategy is simple: Disqualify the other side offering a settlement, specifically the Public Utilities staff.

The utility asked in its filing that the PSC reconsider its order to hold hearings because the utilities staff — a separate regulatory agency — is not an "indispensable party."

The company also said in the filing that the commission need not consider any further settlement proposals from other intervenors since the company has already satisfied the commission's criteria for a deal that included the following: operating Kemper as a natural gas plant, having no rate increases and removing of ratepayers from any risks associated with the mothballed gasifiers.

A threat was laid in the filing that the company will pursue $6.5 billion in costs on the gasifier if the commission doesn't agree to Mississippi Power's proposal.

The two sides — the company and several intervenors such as Walmart and Chevron with the staff — were unable to come to a settlement agreement because of two sticking points:

  • There exists between $150 million and $200 million in capital costs on the part of Kemper — costs associated with power-generating turbines and associated equipment generating power on natural gas since August 2014.

  • The staff wanted the company to pass on regulatory costs such as legal fees and other expenditures to customers 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.

If the PSC decides against upholding Mississippi Power's motion, a pre-discussion hearing is scheduled September 28. Hearings on settlement proposals would follow on December 4 at 9 a.m.


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