Company Executive, Customers Talk About Mississippi Power Rate Hike Proposal

The new 9.5 percent increase is due in part to demand. Customers use 37 percent more electricity than they did in 1991. Because of that, Mississippi Power is hoping its customers understand why rates need to go up.

"You go in asking for what you have to have to cover the cost of doing business and to keep the lights on," Mississippi Power executive Rex Kelly said.

But at Mississippi Power's Gulfport customer service center, people paying their electric bills were somewhat shocked to hear about the 9.5 percent rate hike proposal. Ora Lake felt rates are high enough now.

"I don't know if we'll be able to pay the bills then," she said.

Long Beach's Mary Whitney didn't think the rate increase was right. She said, "I think they got enough of our money as it is." Biloxi's Ron Williams simply said, "Ow. It's going to hurt a lot of people."

The Mississippi Power executive said the increase would help offset the $400 million cost of adding two new generating units at the Jackson County power plant.

"The bulk of the increase is due to the fact that we're investing in Mississippi," he said. "We're investing new generation to continue to meet the needs of our customers here."

Jackson County's Plant Daniel now has the ability to supply electricity to any Mississippi Power plant. Financially that's important for the company. Before the new generating units came on line, Mississippi Power had to buy extra electricity from outside agencies to handle peak demand situations.

Rex Kelly said that became a costly endeavor.

"At some point you have to build generation in order to remain economical and to make sure that you keep the lights on," he said. "In the final analysis, it's all about keeping the lights on for our customers."

The rate increase would impact 191,000 Mississippi Power customers in 23 South Mississippi counties. Mississippi Power will file the rate hike paperwork next month. If the public service commission approves the 9.5 percent increase, it will kick in next year.

By the way, Mississippi Power will be dedicating its new generating units Friday July 20, at a ceremony in front of the Jackson County power plant.