MS high court orders refunds for Mississippi Power ratepayers

Published: Feb. 12, 2015 at 6:57 PM CST|Updated: Feb. 13, 2015 at 1:08 AM CST
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JACKSON, MS (WLOX) - The Mississippi Supreme Court on Thursday reversed an earlier order granting Mississippi Power a rate increase, and directed the Mississippi Public Service Commission to "enter an order directing that the funds be refunded to the ratepayers."

At issue in this case is a suit filed by Thomas Blanton after the Public Service Commission (PSC) approved rate increases for Mississippi Power in March 2013. Mississippi Power received a 15 percent rate increase for 2013 and a three percent increase for 2014.

Attorneys for MPC and the Commission argued they followed state law when those increases were adopted. However, justices wrote, "The record is devoid of a 'finding of prudency' or that MPC's expenditures were 'prudently incurred.' and for good reason  no prudency hearings have been held. In the absence of prudency hearings, we fail to discern how a rate can be arbitrarily declared as 'fair, just, and reasonable' and/or 'just and reasonable.'"

The state supreme court determined that "by not conducting prudency hearings, the Commission ignored the dictates of the Act and thus acted arbitrarily without lawful authority."

A majority of the justices determined the PSC had no legal authority to increase the rates.

"Ratepayers should not be bound by decisions made by the Commission which do not comport with the laws of our State," they wrote. "This Court will not condone the forced payments for rate increases not authorized by the Act or existing law."

The court sent this case back to the PSC, and in the process, ordered the following: "The Commission is hereby instructed to (1) fix by order the rates in existence prior to its order of March 5, 2013; (2) fix no rate increases until the Commission is in compliance with this Court's opinion; and (3) enter an order refunding the monies attributable to the rate increases allowed by the March 5, 2013 order."

They also instructed the commission to provide notice to ratepayers about future proceedings related to rate base, rates, rate of return, and prudency hearings.

"Mississippi Power is reviewing today's ruling by the Mississippi Supreme Court. It's important to note that by approving the 18 percent increase in the 2013 rate plan, the Commission significantly mitigated what would otherwise have been a base rate increase of at least 35 percent. Our focus remains on developing a solution that is in the best interest of our customers," said Mississippi Power Corporate Communications representative Bill Snyder.

"Progress continues at the Kemper County energy facility with a focus on start-up activities. As you know, we put the combined cycle portion of the project in service using natural gas in Aug. 2014 and it's been running successfully as a part of our fleet's dispatch for the benefit of our customers."

WLOX News reached out to former Southern District Public Service Commissioner Leonard Bentz to see what he had to say about the Supreme Court's ruling.

"That's disappointing that the Supreme Court would rule that way. From the word go, all we tried to do was try and protect ratepayers," said Bentz.

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