- Associated Press - Saturday, July 18, 2015

JACKSON, Miss. (AP) - Mississippi Power Co. won’t be allowed to charge higher rates as soon as it wanted to help pay for a $6.2 billion power plant in Kemper County.

In an order filed this week, the Mississippi Public Service Commission said it would hold a hearing Aug. 6 on the company’s request to raise rates by 18 percent to pay for $1.1 billion in assets that Mississippi Power says are already in commercial service at the Kemper site.

The unit of Atlanta-based Southern Co. had wanted regulators to allow an interim rate increase beginning Monday, with further proceedings later to determine whether higher bills are justified. If approved later, the rate would become permanent. If not, the company would have to repay what it collects.

Not by coincidence, on Monday a previous 18 percent rate increase for Kemper will roll off customer bills after the Mississippi Supreme Court declared it illegally enacted in February.

The proposed rate increase would increase charges by $159 million a year on Mississippi Power’s 186,000 customers. A residential customer who uses 1,000 kilowatt hours per month of electricity will see monthly bills fall from $144 a month to $121 on Monday. The rate increase would push bills back to $144. The average residential customer uses more power and pays more.

The interim rate proposal wouldn’t affect refunds expected to be issued to customers by November. Mississippi Power is supposed to file its refund plan in time for commissioners to act on it at their Aug. 6 meeting.

Mississippi Power says it will run out of cash by November without higher rates, and that it can’t borrow money without aid from its parent company. The company says that it will have to rely on Southern Co. to finance $353 million in refunds of rates collected over the last two years that were declared illegal in the court’s ruling. Southern Co. already had to give Mississippi Power $301 million to repay a deposit to South Mississippi Electric Power Association after SMEPA dropped its plans to buy 15 percent of Kemper.

“Any prolonged period with no rate recovery associated with the Kemper Project (and particularly its assets already in service) threatens imminent injury to (Mississippi Power) and jeopardizes the company’s ability to access the funds needed to continue normal business operations and complete the Kemper project as planned,” the company wrote in a recent filing with the commission.

Mississippi Power Chief Financial Officer Moses Feagin also warned in written testimony filed with the commission that any delay will be interpreted as further evidence of regulatory disfavor by credit agencies, and could lead to more credit downgrades that would increase borrowing costs.

Even with the 18 percent, Mississippi Power says it would run out of cash again by February or March. The company says another rate increase of as much as 22 percent would be needed to pay for the rest of Kemper.

A number of businesses and governments have also intervened in the case, including the Mississippi Economic Council, Mississippi Manufacturers Association, Gulf Coast Business Council, Keesler Air Force Base, City of D’Iberville and City of Biloxi. Also intervening is Hattiesburg oilman Thomas Blanton, who’s running for the southern district PSC seat as a Democrat. He opposes the 18 percent proposal, saying it in effect nullifies the Supreme Court decision, and is “a shell game.”

People who have intervened in the case have until Friday to respond to Mississippi Power’s request for higher rates, and the company has until Aug. 3 to answer objections.

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Follow Jeff Amy at: https://twitter.com/jeffamy

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