JACKSON, Mississippi — Mississippi Power Co. filed three proposals Friday with the Public Service Commission seeking higher rates to pay for the $6.2 billion power plant that it's building in Kemper County.
In a telephone interview, CEO Ed Holland said the Southern Co. subsidiary prefers a plan that would result in the lowest increase for customers. Holland said the company will use a provision in state law to enact the steepest increase while waiting on a regulatory decision if the Public Service Commission doesn't act within 120 days. Mississippi Power would have to post a bond for possible refunds if it did that.
The move comes after the Mississippi Supreme Court in February overturned rate increases to fund the power plant and ordered refunds of $337 million. The company, regulators and some business groups are asking the court to reverse its ruling.
The Friday filings are Mississippi Power's plans if the court doesn't take a fresh look. Under the worst-case scenario, typical residential customers could see monthly bills rise to $180.75.
Right now, after those earlier rate increases, a residential customer of Mississippi Power who uses 1,000 kilowatt hours of electricity per month pays $143.89. Mississippi's other private power company, Entergy Corp., charges $110.02 per month to a residential customer for the same amount of power.
The first plan, with the lowest increases, could push rates as high as $153 a month in 2016. That plan tries to salvage the money that's been built up from the overturned rate increase. The plan would raise more than $700 million and last until the end of 2019 and add it to up to $1 billion in bonds that the state Legislature authorized, using an increase of $6 to $9 a month to repay the bonds. Those bonds would save Mississippi Power's 186,000 customers money, because the company wouldn't earn a profit for shareholders on that part of the payment.
Holland said Mississippi Power believes the commission could still find a way for it to let the utility legally use the money it's collected so far, although he said "it's far more difficult to do and it wouldn't be nearly as clean."
The second plan would last for two years, raising rates by a total of $222 million over two years. Residential rates would go up $5 a month this year, and $29 a month in the second year, topping out at $177.56 a month. Mississippi Power would propose new rates after that, because it wouldn't collect enough money to pay for the plant. If this plan stayed in effect through 2019, the company projects it would raise $1.5 billion.
The third plan would raise rates by $234 million over two years. Residential bills would go up by $17 in 2015 and another $20 in 2016, topping out at $180.75 a month. Like with the second plan, Mississippi Power would need to keep raising money after two years. If the plan stayed in effect through the end of 2019, it would raise $1.65 billion.
Neither the second nor the third plan would use the bonds, which means they would cost ratepayers more. The company would refund money collected up to now in two years under the two plans.
Both the second and third plans have big jumps that could cause "rate shock." Holland said that's why Mississippi Power wants regulators to choose the first one.
"That is the one we clearly prefer," he said.
Opponents of the increases have said warnings of "rate shock" are unfair, because customers can use money themselves instead of giving it to the company in advance for the plant.
"You've got to hand it to them for chutzpah," said Shelby Foote, a Jackson city councilman and member of Bigger Pie Forum, a group that's opposed Kemper's construction.
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