State utility regulators have reached an agreement with Mississippi Power Co. and other involved parties over what costs the company can recover from the fallout of its $7.5 billion-plus Kemper County energy facility project, officials said.
Virden Jones, executive director of the Mississippi Public Utilities Staff, said the staff has agreed to an updated version of an agreement Mississippi Power Co. and other parties submitted with the Mississippi Public Service Commission last week.
A sticking point was a $250 million difference between what regulators thought Mississippi Power should recover and what the utility believed it should be able to charge customers.
The final stipulation document filed with the commission Friday says that staff, Mississippi Power, Chevron Products Co., The Chemours Co. and others conclude the unit of Atlanta-based Southern Co. should collect an estimated $112.6 million annually – or around $900.8 million total – in rates over a period of eight years starting Jan. 2018 – for its in-service assets and liabilities.
They also agreed on annual budgeted operations and maintenance costs of $25.5 million, which could be reconsidered annually.
The recovery amount is less than what is listed in the original stipulation document filed with the commission Nov. 22. Mississippi Power proposed that it collect an estimated $117.78 million annually – or around $942 million total – in rates over a period of eight years starting Jan. 2018 – for its in-service assets and liabilities.
In previous filings, Mississippi Power said the agreement amounts to less than they wanted to recover for the project. Mississippi Power proposed a lower plant average rate base value last week at $907 million compared to an August filing when Mississippi Power suggested the value of the plant was worth almost $1.1 billion.
Through Sept. 30, the company had already written off about $6 billion in project costs.
Mississippi Today reached out to Mississippi Power for comment Friday afternoon, but did not receive an immediate reply.
The agreement also complies with the commission’s request in July that the company propose a settlement removing responsibility from ratepayers for the plant’s lignite coal technology and related assets; that did not have a rate increase to Mississippi Power Company customers, potentially lowering the rates of residential customers; and that revised the plant’s operating license to only allow for operation of a natural gas facility at the Kemper County project’s location, the company said in the filing.
The Mississippi Public Service Commission is next in line to sign off on the document, which Jones expected to happen soon.
‘We’re close to the end,” Jones said. “What will probably happen is they will issue this order today, and probably establish a 45-day comment period. Then they’ll take up whether to approve or deny the stipulation in January.”
The utilities staff now anticipates that the commission will cancel next week’s hearing and provide a new schedule for when the matter will be heard.
That multi-day hearing would have kicked off Dec. 4 and involved testimony and evidence for and against the Kemper plant as part of the settlement process that began in June.
On Tuesday, the commission published a filing on the hearing process stating it did not intend to set the final recovery rates customers would end up paying by the time the hearing process concluded around January, as expected.
Rates would only be determined by a settlement between the parties, the commission says. It declared the testimony and evidence gathered during the hearing process was to be “used as tools for the parties to review each other’s respective settlement positions.”
While the commission’s approval of a finalized settlement would solidify those recovery rates for Mississippi Power Co.’s customers, Jones said the process is not over yet.
He said the commission’s Tuesday filing “spurred both the company and the staff to take another look at it (Mississippi Power’s most recent settlement proposal.)”
He expects the settlement to be appealed by outside intervenors and critics of the plant who have followed the project closely.
“It’s gone on for long time,” Jones said. “I think we’re all ready to move on to other things. We feel like we got the best deal that we could that would balance the interest of the ratepayers and the company … I’m sure there will be critics, but also people who think we did a good job, so we’ll just let those opinions fall where they may.”
Republish this article
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
- Look for the "Republish This Story" button underneath each story. To republish online, simply click the button, copy the html code and paste into your Content Management System (CMS).
- Editorial cartoons and photo essays are not included under the Creative Commons license and therefore do not have the "Republish This Story" button option. To learn more about our cartoon syndication services, click here.
- You can’t edit our stories, except to reflect relative changes in time, location and editorial style.
- You can’t sell or syndicate our stories.
- Any web site our stories appear on must include a contact for your organization.
- If you share our stories on social media, please tag us in your posts using @MSTODAYnews on Facebook and @MSTODAYnews on Twitter.
- You have to credit Mississippi Today. We prefer “Author Name, Mississippi Today” in the byline. If you’re not able to add the byline, please include a line at the top of the story that reads: “This story was originally published by Mississippi Today” and include our website, mississippitoday.org.
- You can’t edit our stories, except to reflect relative changes in time, location and editorial style.
- You cannot republish our editorial cartoons, photographs, illustrations or graphics without specific permission (contact our managing editor Kayleigh Skinner for more information). To learn more about our cartoon syndication services, click here.
- Our stories may appear on pages with ads, but not ads specifically sold against our stories.
- You can’t sell or syndicate our stories.
- You can only publish select stories individually — not as a collection.
- Any web site our stories appear on must include a contact for your organization.
- If you share our stories on social media, please tag us in your posts using @MSTODAYnews on Facebook and @MSTODAYnews on Twitter.