Fuel Increases Mean Power Bills Going Up

Mississippi Power Company uses coal and natural gas to make electricity. The cost of those fuels continues to rise. Something called the "fuel cost adjustment" allows the utility to pass along those higher costs to its customers.

That means power company customers will likely face higher monthly electric bills, beginning early next year.

A busy Plant Watson generates the electricity it takes to run thousands of air conditioners across South Mississippi. Like oil and gas prices, fuels which feed the power plant are also costing more.

"We burn both coal and natural gas. And we look for the most economical mix of those two fuels. As both of these continue to rise, that's kind of the crunch we see ourselves in right now," said Mississippi Power spokesman, Kurt Brautigam.

With coal prices up some 25 percent from a year ago and natural gas up to 40 percent, the impact will be passed along to customers.

"We could be looking at some kind of increase, possibly in the line of 10 to 15 percent," said Brautigam.

"They always brag on their commercials about being 15 percent lower than anybody else," said Tony Dulcich, a Gulfport resident who hadn't heard about the proposed rate hike.

"Yeah, that's normal, that's for sure. That stuff is going up like gold," he said, responding to the news.

A 15 percent rate hike would increase Tony and Ella Dulcich's monthly bill from 140 dollars to 161 dollars. The couple has taken steps to conserve. They blocked off the air conditioning in unused rooms and did something else.

"Put a fan up in the kitchen, where we never had one before," said Ella Dulcich.

The projected increase is preliminary because Mississippi Power can't file the formal rate hike request for fuel cost adjustment until November. It's announcing the projected increases now because many corporate customers are busy planning budgets for next year.

"We try to manage those costs. We know how much they can affect our customers when you have continually rising increases like we've seen the last couple of years," said Brautigam.

If approved by the Public Service Commission, the rate increase would take effect early next year.

Any proposed rate hike must be approved by the Public Service Commission. Last year, Mississippi Power was granted a ten percent increase for its "fuel cost adjustment".