Mississippi Power and PSC Agree on Rates for Kemper Plant Operations

The Mississippi Public Service Commission (PSC) approved an agreement on December 3 (EC-120-0097-00 ) that will downsize bills and provide an additional credit to Mississippi Power’s 186,000 ratepayers in the southeastern part of the state. The PSC approved the agreement by a vote of 3-0.

This is the latest decision regarding the costs associated with ongoing construction of the Kemper County power plant – a state-of-the-art project that was supposed to demonstrate carbon capture at a coal-fired facility. The project is now two years behind schedule and costs at the site have escalated to $6.5 billion – triple the original estimate.

The finding comes after an agreement reached last month between Mississippi Power and the PUC staff regarding permanent rates associated with parts of Kemper that are already in operation – specifically, the combined-cycle part of the plant – and have been serving Mississippi Power customers for more than a year. The vote by the PSC finalized that agreement.

Under the terms of the new agreement:

• Kemper rates will be reduced for residential customers by about $4.70 below the current interim rate increase for a residential customer using 1,000 kilowatt-hours (kWh) a month. This will be applied to bills beginning with the first billing cycle in January.
• Mississippi Power will credit back to customers the difference between the interim rates the company has collected since August and the permanent rates in the latest agreement. This will result in an approximate average $22 one-time credit to residential customers' bills within 90 days.

"We want to thank the PSC and the Public Utilities Staff for their hard work in coming to an agreement with Mississippi Power on the in-service Kemper assets, which have been supplying customers with electricity for more than a year," Mississippi Power CEO Ed Holland commented, adding, "This ensures we can continue the progress we have made to ring the Kemper facility fully online. With this decision, Mississippi Power can proceed with some certainty and stability while providing our customers with safe, clean and reliable electricity."

The company also has filed a request to further reduce customers' bills as part of its annual fuel filing. The company has asked for a reduction of about $13.70 for a residential customer using 1,000 kWh/month.

"These reductions, along with the refund we have already provided customers, will lower customers' bills significantly," Holland said. "

The combined cycle portion of the plant has been in service since August of 2014. In its first year of operation, the combined cycle unit has generated more than 3.5 billion kWh of electricity, according to Mississippi Power – or enough to power the needs of approximately 250,000 homes for a year.