Mississippi Power seeking PSC approval for Kemper cost recovery move

Southern Co. utility unit Mississippi Power has asked the Mississippi Public Service Commission for interim rates, subject to refund, connected with deployment of the coal gasification power plant being developed in Kemper County, Miss.

Southern and Mississippi Power described the request to the PSC in an 8-K financial filing with the Securities and Exchange Commission (SEC).

“The In-Service Asset Proposal is designed to collect about $159 million annually and is requested to be effective for the first billing cycle of August 2015,” the utility said in the SEC filing. “The In-Service Asset Proposal would result in no additional rate impact to Mississippi Power customers if approved to replace the Mirror CWIP [construction work in progress] rates scheduled to be terminated on July 20, 2015.”

“If the Mississippi PSC does not act on the Supplemental Notice or the Rate Notice within 120 days of the Supplemental Notice filing, Mississippi Power expects to put one of the four alternative rate proposals into effect as temporary rates under bond and subject to refund pursuant to Mississippi state law,” the company said.

“Mississippi Power also expects to seek additional rate relief to address rate recovery of the remaining Kemper IGCC assets,” the company went on to say in the filing.

The 582 MW Kemper integrated gasification combined-cycle (IGCC) generating facility would be fueled by Mississippi lignite coal. It is scheduled to begin operation in the first half of 2016.

But the milestone advanced coal technology project has suffered its share of headaches in recent times.

The South Mississippi Electric Power Association (SMEPA) board of directors voted in May not to buy a 15 percent ownership share of the power plant after all. Also in May, the Mississippi Supreme Court rejected certain Kemper-related rate increases. The court held that the Mississippi PSC did not properly justify the “mirror” construction work in progress or “mirror CWIP” costs.

The Supplemental Notice was filed in response to the July 7, 2015 order of the Mississippi PSC enforcing the Mississippi Supreme Court’s 2015 decision that requires Mississippi Power to terminate, effective July 20, 2015, the rates implemented by the March 2013 Mississippi PSC order, and to refund all amounts collected under those rates.

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