Abby L. Harvey
GHG Monitor
11/20/2015
Mississippi Power has struck a deal with the state Public Utilities Staff (PUS), an advisory board to the Mississippi Public Service Commission (MPSC), for a 15 percent rate increase to offset the cost of the Kemper Counter Energy Facility carbon capture and storage project. At a Nov. 10 MPSC hearing, held to determine the prudency of the Kemper project, Mississippi Power announced its agreement with the PUS. The deal, however, must first be approved by the Public Service Commission to take effect.
The new rate increase, if approved, would replace a temporary 18 percent emergency rate increase enacted on Aug. 13. That increase replaced a rate hike overturned by the state Supreme Court in February that was intended to help fund the Kemper County site. The Kemper project, a first-of-its-kind new-build coal-fired power plant that will employ carbon capture and storage technology, has been plagued by cost overruns and delays. The current price tag of the project sits at $6.4 billion, well above the initial estimate of $2.4 billion.
Due to this financial hardship, and the fact that the Kemper facility, though not yet at full operation, has been supplying the surrounding community with electricity generated with natural gas, the Public Service Commission ruled the emergency rate increase justifiable.
Under the overturned 2013 rate order, the commission approved a 15 percent retail rate increase for roughly 186,000 ratepayers in March of that year, plus a 3 percent boost effective January 2014, totaling approximately $257 million over the two years, to help pay for the Kemper facility.
The state Supreme Court ruled in February that the commission never found the costs of the plant were prudently incurred. It ordered Mississippi Power to refund money collected under the rate increase, totaling roughly $377 million.
