JACKSON, MS (WLOX) - Mississippi Power is about to fall off the financial cliff. That was the testimony of president and CEO Ed Holland at Thursday's Public Service Commission meeting in Jackson.
The main reason for the money woes: The $2 billion in cost overruns at the Kemper County plant under construction and the inability to collect a rate increase to help pay for it.
"What we are showing in our cash flow projections is that we would in fact be in a negative cash flow position in the October, November time frame. Basically run out of money. That's correct," Holland said.
The company is asking for an immediate 18 percent increase in rates, which would raise about $159 million. But not everyone agrees the company needs the money. The attorney for rate increase opponent Tom Blanton wasn't buying it.
"They're putting back the 18 percent that the Supreme Court ordered to be restored to the customers," Attorney Mike Adelman said. "At most, the customers would see the reduction for maybe a month or two, or a cycle or two, and then it would be restored."
Some commission members are fearful of what could happen if a hurricane hits the coast and there's no money to fund repairs.
"When the power goes off, and it can be off for a week or so, Mississippi Power's response in the past has been excellent, and the fact that that might be in jeopardy is a concern to me," PSC Commissioner Steve Renfroe said.
The power company did have some supporters. Two dozen trade union workers showed up, worried about job security.
"Threatens not only the financial stability of Mississippi Power, but also the security of existing jobs and prospects for future job creation," Trade Union Attorney Christopher Weldy said.
If the PSC next week approves the 18 percent increase requested by Mississippi Power, it could mean an infusion of cash from another source as well, the parent company, Southern Company.
"We're confident that we can, in fact, get back into those markets and that the Southern Company would begin to make the equity infusions on a going forward basis. And how much would that equity infusion be from Southern Company. They would be putting in over time another $200 million into the project," Holland said.
A decision on the rate hike request will be made next Thursday. Commissioners also approved a refund of some $350 million for Mississippi Power customers. The company has 60 days to notify costumers and then an additional 60 days to pay back the money, either with a bill credit or a one time check.