Saturday, July 18, 2009

Not so fast, PSC tells utilityMississippi Power wants early rate hike for Kemper plant

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Utility regulators have declined to deviate from the established schedule for considering Mississippi Power Co.'s application for a planned $2.2 billion power plant in Kemper County, according to an order released Friday. Mississippi Power in June specifically asked the Public Service Commission to determine by Dec. 31 if it could bill pre-construction costs to its customers. The PSC, in an order made public Friday, declined and said it would consider pre-construction costs as part of the overall application review. The PSC has already laid out a timetable for making a final decision on the plant by May 1, 2010. Earlier this year, Mississippi Power requested the ruling to come by the end of August. The PSC declined, citing the complexity of the plant, its financing and its need. The three-member commission said it would separate the issues during the hearing process - first addressing the need for the power plant, which is the main part of the application, and then the possible rate increase. Mississippi Power spokeswoman Cindy Duvall said Friday that the company "appreciated the commission's taking the time to listen to us bring some issues to their attention." "There are many complicated issues related to this project, many facets that must be looked at. We believe the schedule of hearings will gives us a forum to show the need for the plant," Duvall said. A schedule set by the PSC says the commission will issue a decision on the need for the project on Oct. 9. Several hearings will be held between now and February before the final decision is issued May 1. Louie Miller, executive director of the Mississippi chapter of the Sierra Club, said in a statement Friday that he was pleased with the PSC's decision. "The Sierra Club strongly feels that this PSC investigation into this proposal will reveal that it involves risky, unproven technology," Miller said. "Obviously, there are numerous options to be considered before the state of Mississippi goes down the path of saddling rate payers for decades to come with billions of dollars of debt." The plant would be an integrated gasification combined cycle facility that converts locally mined lignite, or "brown coal," into a gas to generate lower-emission electricity. Mississippi Power wants to use a law - called the Baseload Act of 2008 - that would allow them to raise customers' rates to finance the plant. Raising rates up front is the only way to get the money, and the bill was needed to avoid a much higher rate increase later, they said. Opponents of the Baseload Act said consumers might be stuck with higher bills even if a power company decides not to go forward with expansions. Mississippi Power officials have said when the law was approved that it wasn't likely the company would move forward with rate increases and then scrap the high-tech plant, because it would lose substantial investments in the venture. The PSC said while denying the rate request Mississippi Power wanted now, it wanted to hear more about how the 2008 law affected cost recovery requests. The PSC set a Feb. 22, 2010, deadline for additional information to be filed on that issue. Mississippi Power is part of the Southern Co., which includes Alabama Power, Georgia Power and Gulf Power. It has about 184,000 customers in the 23 counties of southeast Mississippi.

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