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Ratepayers want refund of Mississippi Power charges collected through Kemper 'fraud'

PATRICK OCHS/SUN HERALD/FILE 
 Mississippi Power's Kemper County energy plant is expected to be fully operational by at least May 31, 2015. Officials say that despite several delays, the project could be completed before the May deadline.
PATRICK OCHS/SUN HERALD/FILE Mississippi Power's Kemper County energy plant is expected to be fully operational by at least May 31, 2015. Officials say that despite several delays, the project could be completed before the May deadline. SUN HERALD

GULFPORT -- Island View Casino Resort, a Biloxi seafood processor and a Gulfport resident are suing Mississippi Power Co. in Circuit Court. They claim the energy company has deceived and defrauded the public in construction of the Kemper power plant, passing along its costs in the form of exorbitant rate hikes approved by the state Public Service Commission.

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The "Goliath" Kemper plant, the lawsuit says, "threatens to damage their businesses, their livelihoods and their futures." The lawsuit, filed Wednesday by the casino, Biloxi Freezing and Processing Inc. and John Carlton Dean of Gulfport asks that a judge order Mississippi Power to refund all charges resulting from fraud to the two companies and Dean.

The plaintiffs also seek economic and punitive damages, to be determined at trial, plus attorney's fees and other court costs.

Mississippi Power attorneys had not seen the lawsuit and were in no position to comment on it, spokesman Jeff Shepard said.

Mississippi Power is accused of violating the state's Unfair Trade Practices Act and a law that allows utilities to recover specified construction costs through rate increases with PSC approval.

The lawsuit, filed by Gulfport attorney Joe Sam Owen, is not challenging Mississippi Power's rates or the PSC's authority to set them, the 28-page document says.

"Instead, this lawsuit is about breach of trust and deception, whereby a utility entrusted with the common good and protected by a rate-making regulatory scheme, deliberately set out as alleged herein to abuse this trust and avoid accountability for its fraud and mismanagement, all the while fleecing the public in the interest of profits."

The lawsuit outlines construction delays at Kemper the power company allegedly knew about and hid. It covers rate increases the PSC granted with little or no public notice to cover Kemper construction costs, and it details cost overruns.

It says the plant, which is supposed to turn lignite goal into gas used to generate electricity, a new technology, was originally to be operating by 2013 at a cost of $1.8 billion. Costs have ballooned to $6.64 billion and the plant is still not operating. The lawsuit says Mississippi Power knew by 2012 the plant was behind schedule, a fact it chose to keep secret until October 2013.

The lawsuit also details an 18 percent rate hike the PSC approved and the state Supreme Court rescinded, only to have the PSC approve a 15 percent hike later on. Secrecy surrounded the process, the lawsuit says.

As a result of Mississippi Power's mismanagement of the project, the lawsuit says, Biloxi Freezing and Processing has paid $117,058.34 in excess power costs over two years.

The excess costs put both companies at a competitive disadvantage, the lawsuit says.

Further, the lawsuit says, Mississippi Power's continuing efforts to portray the Kemper plant as a "plus" for the local economy are "false and misleading."

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