Misssissippi Power’s report doesn’t settle Kemper energy facility issues

Mississippi Power’s report on resolving the issues at the Kemper County energy facility was filed by Monday’s deadline, although it wasn’t what the commissioners hoped to see.

“The separate filings made Monday afternoon by the Public Utilities Staff and Mississippi Power Company indicate that a settlement has yet to be reached,” the commission said in a press release late Monday afternoon.

The commission will review the filings by Friday and order a conference requiring all parties to update the commission on the status of negotiations and provide direction for moving forward.

Monday’s report was an answer to the PSC’s directive that said:

▪  Any settlement should involve no increase for Mississippi Power customers and possibly a rate reduction, particularly for residential customers.

Mississippi Power said in Monday’s report that the current rates in effect for Kemper are “just and reasonable” and let the company recover prudently-incurred costs of Kemper operating on natural gas.

▪  Remove the risk of ratepayers having to pay the cost of the lignite coal gasifier and related assets.

Mississippi Power said it has agreed to remove any customer risk associated with past and future costs for design, construction, start-up and operation of the Kemper gasification facilities. Should Southern Co. or any third-party operator come in to run the gasifier, customers won’t pay any of the costs and risks associated with the operation, the company said.

▪  Modify the original certificate and allow only for operation of a natural gas facility at Kemper.

The company on June 28 notified the PSC it was suspending operations on the lignite portion of the plant, which was two years behind schedule and more than $4 billion over the original estimate. The plant continues to operate on natural gas, as it has done since Aug. 2014.

Mississippi Power said it has tried to reach a settlement with the Public Utilities Staff, including a settlement conference with more than a dozen parties, but were unsuccessful.

The company said the counter-proposals received from these parties went beyond the conditions of the PSC and “would have left MPC in such a condition that it could not continue to provide the same level of service that is at the core of MPC’s business.”

Mississippi Power and parent Southern Co. reported Aug. 2 they have incurred $6 billion in charges on the $7 billion plant, or $3.9 billion after tax.

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