Business

Mississippi Power proposes rates stay the same for now

Mississippi Power on Monday filed its rate proposal for the Kemper energy facility as directed by the Mississippi Public Service Commission. The plant isn’t yet fully operational using lignite.
Mississippi Power on Monday filed its rate proposal for the Kemper energy facility as directed by the Mississippi Public Service Commission. The plant isn’t yet fully operational using lignite.

Mississippi Power late Monday filed two reports but not the anticipated rate case for the Kemper energy facility.

“Mississippi Power is not filing for a full rate review on recovery of the project’s costs at this time,” the company said in a statement.

Instead the company filed its monthly status report with the Mississippi Public Service Commission, saying it now expects Kemper to be fully operational on lignite coal by the end of the month. It also filed a rate plan that would allow current rates to remain in place.

The plant has been running on natural gas since August 2014 and the PSC allowed Mississippi Power a 15-percent rate hike to recover costs for the portion of the plant that is producing electricity with natural gas.

Under the plan submitted Monday, Mississippi Power proposes the depreciation schedule that now is over seven to 10 years be reduced to 11 months. If approved, the company said, the filing will not increase customer bills.

Public Service Commissioners Sam Britton, Brandon Presley and Cecil Brown will review the request and schedule a public hearing. Mississippi Power said it believes a decision will be made by October.

The PSC gave the company until June 3 to lay out its case for raising customer rates to recover the costs of the facility in Kemper County. Because that date fell on Saturday, the company filed Monday.

“The company and the Mississippi Public Utilities Staff have been discussing the status of the project and the nature and timing of a rate filing to address recovery of the remainder of the Kemper project costs not currently in rates,” Mississippi Power said. The company continues to develop a traditional rate case and a rate mitigation plan to address these costs, the company said, but timing is “uncertain.”

In its April report to the PSC, Mississippi Power said the estimated costs increased by $186 million, which will be paid by Southern Company and Mississippi Power and not by Mississippi Power customers.

The company said Kemper has reached integrated operations of both gasifiers and combustion turbines at times and has a total of about 200 days using lignite.

How many days or months Mississippi Power has to produce electricity with lignite to fulfill its obligations to its customers and the PSC is not spelled out, said PSC Southern District Commissioner Sam Britton. As it stands now, he said Kemper hasn’t been built and delivered as promised.

Construction of the first of its kind facility began in 2010 at an expected cost at that time of $2.9 billion. The cost of the Kemper facility now is $7.3 billion and rising by about $30 million a month.

Earlier this year the company released a report that said it could be less expensive to operate Kemper on natural gas than on lignite, given the lower than expected cost of gas and the higher than anticipated expense of operating with lignite.

  Comments