Mississippi Power reaches final settlement on Kemper: Public Utilities Commission must approve

Mississippi Power customers would see their electricity bills remain the same or decrease slightly if the state Public Service Commission approves a settlement agreement reached Friday on the Kemper County energy facility.

Mississippi Power officials reached the agreement with commission staff, Chevron and Federal Executive Agencies on the remaining costs associated with Kemper. With all the key parties in agreement, the announcement represents final terms that are now subject to the approval of the Public Service Commission.

"This agreement represents significant compromise from all parties involved, but is an important step to settle all costs remaining on the Kemper project," said Mississippi Power President and CEO Anthony Wilson in a news release. "Putting the gasifier portion of Kemper that did not meet our expectations behind us is in the best interest of our customers, company and the state.

"We are pleased to continue operating an efficient natural gas facility at Kemper which has been serving our customers for more than three years."

Mississippi Power has lost $6 billion on the $7.5 billion Kemper plant. The utility suspended efforts to complete a unit that would gasify soft lignite coal after the Public Service Commission said it didn't want customers to pay for that part of the plant.

Mississippi Power said Friday's agreement meets the directives set forth by the PSC, including the removal of risk to customers for the gasifier and related assets, no customer rate increase related to Kemper and the continued operation of Kemper as a natural gas facility.

"If this stipulation is approved, we expect significant changes to our business," Wilson said. "As we adjust to this considerable loss of revenue, our top priority will be to maintain safe and reliable service to our customers."

A hearing had been set for Monday with the PSC to discuss a possible Kemper settlement. The commission has now canceled that hearing. Mississippi Power expects a final order on Kemper from the PSC in January.

While there will be no rate increase related to Kemper, Mississippi Power has asked for 8.5 percent rate hike that would raise the average bill about $11 a month. The company made two rate filings in mid-November related to costs of operating and maintaining company facilities and fuel expenses.