Kemper deal dead; regulators order hearings on cost dispute

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The U.S. Department of Energy provided $407 million in financing for the Kemper plant.

With no agreement on which costs can be recovered from the $7.5 billion-plus Kemper County energy facility, the parties are headed to the next phase in the process, an administrative trial of sorts.

The Mississippi Public Service Commission unanimously decided Tuesday to start the hearing process that could decide the fate of the plant by January 2018.

The commission announced a series of filing dates from October through December for the parties, including Mississippi Power Co. and the Public Utilities Staff, to submit testimonies and evidence for their cases.

Other parties involved in Mississippi Power’s settlement proposal include Denbury Resources Inc.; Central Mississippi Building and Construction Trades Council; East Mississippi Business Development Corporation; and Ministerial Alliance Partnership.

This comes after negotiations stalled for more than two week over a disagreement between Mississippi Power and utility regulators over how much the power company will be able to recover from its customers for the part of the plant that’s now in operation.

“We said ‘Go get a settlement’, and the parties couldn’t get a settlement,” said Brandon Presley, chairman of the Public Service Commission. “We’re not privy to the details of that, so we want to get that into a public forum … Then we want to know, ‘Back up what your settlement terms were with actual evidence and put it on the record for everyone to see.’ ”

Kemper negotiations stalled but regulators are ready to deal

Presley said the process will allow commissioners to ask questions, witnesses to testify and cross examination to occur so commissioners will have factual evidence for the terms that the company and Public Utilities Staff have proposed.

Mississippi Power spokesman Jack Bonnikson said in a statement that Mississippi Power looks forward to presenting the facts of the settlement agreement the company reached with several parties on the costs of the Kemper County energy facility.

Negotiations between Mississippi Power Co. and the Public Utilities Staff, an entity separate from the Public Service Commission that provides investigative and advisory services to the commission, began July 6 and went on for more than two months.

PSC

Public Service Commissioner Brandon Presley

Talks of a potential settlement kicked off when the commission in July ordered the company to steer the plant away from burning lignite coal by only operating the plant as a natural gas facility, which the plant has done in part since 2014.

Mississippi Power submitted a proposal in August saying it would comply with rather than fight the commission’s decision.

However, the utilities staff and Mississippi Power disagree on which project costs to place in the company’s rate base, a major factor in determining what Mississippi Power customers will pay for the plant’s services from at least Jan. 1 to Dec. 31, 2018.

The Utilities Staff says Mississippi Power wants to recover around $250 million more than the commission had in mind for operating the natural gas portion of the plant that is servicing customers.

Meanwhile, Mississippi Power has said the company may not be able to continue the same level of service and community involvement if the settlement filed with supporting parties is not approved.

“We believe the facts contained in the company’s filing demonstrate that Mississippi Power is operating in the best interest of customers and what is required to ensure the company’s financial stability,” Bonnikson said in an email Tuesday.