MS Power customers will not pay for lignite portion of Kemper pl - WLOX.com - The News for South Mississippi

MS Power customers will not pay for lignite portion of Kemper plant

KEMPER COUNTY, MS (WLOX) -

There are some new developments surrounding Mississippi Power’s Kemper County energy facility.

The Southern Company issued a news release Wednesday morning that says the company will not be able to recover the $2.8 billion it spent on the gasification portion of the project. That’s money the company expected to recover with a rate increase.

Mississippi Power’s June monthly report to the Mississippi Public Service Commission for the Kemper County energy facility reflects the June 28, 2017 announced suspension of the project. The company continues operating the combined cycle portion of the plant using natural gas to serve customers.

Through May 2017, Mississippi Power and Southern Company recorded charges of $3.07 billion as a result of changes in the cost estimate above the Commission’s established cost cap for the project.

As a result of the Commission’s stated intent of no further rate increase for the Kemper County energy facility, the company does not expect that the gasification portions of the project are probable of rate recovery. Therefore, Mississippi Power and Southern Company recorded an additional $2.8 billion charge in June 2017, which includes estimated costs associated with the gasification portions of the plant and lignite mine. 

In total, Mississippi Power and Southern Company have recorded charges for $6 billion of the project’s costs through June 30, 2017. In the event the gasification portions of the project are ultimately canceled, additional costs estimated at approximately $100 million to $200 million are expected to be incurred. Customers will pay none of these costs.

Kemper’s natural gas power plant has been serving Mississippi Power’s customers for the past three years with reliable, affordable electricity. Mississippi Power has requested that current rates related to Kemper remain stable. The company will continue to fully participate in ongoing settlement discussions. The ultimate outcome will be determined by the Commission in the Kemper settlement proceedings.

In July, the Mississippi Public Service Commission ordered Mississippi Power to enter into settlement agreements with all parties involved in the Kemper County facility.

PSC orders MS Power to begin settlement negotiations

The PSC said it wants a settlement reached between its agency and the power company because it won’t support a rate hike.  

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