Rising global energy costs felt at home

As volatile world energy markets continue to drive fuel prices up, Mississippi Power continues to look for ways to keep fuel costs as low as possible. Fuel costs account for more than 40 percent of the company’s total operating costs.

“For several years we’ve seen significant increases in the cost of our two primary resources of fuel for generating electricity – natural gas and coal,” said Kurt Brautigam, company spokesman. “Natural gas prices have more than doubled over the past three years. Spot market coal prices have increased more than 25 percent since mid-2004 and have more than doubled since mid-2003. Coal transportation issues also continue to adversely affect availability and pricing.”

Under Mississippi law, a utility’s fuel expenses are recovered through a separate fuel adjustment filing with the Mississippi Public Service Commission. Mississippi Power makes its annual fuel filing in November and any approved fuel cost adjustment takes effect on customers’ bills in January. Bills increased approximately ten percent for residential customers for 2006.

“Mississippi Power’s fuel costs are recovered from our customers on a dollar for dollar basis – there is no profit for the company associated with fuel related expenses,” said Brautigam. “We know how much these increases affect customers, so we make great efforts to manage our overall fuel costs.

“For example, we maintain and operate our generating units as efficiently as possible. Over the past couple of years, our power plant employees have reduced forced outage rates at the plants to record lows.

“We also continuously monitor fuel markets and use an active hedging program to reduce price volatility. And in some cases we’ve switched to lower cost types of coal and blends whenever possible.”

The company also tries to provide information to customers about how to use energy wisely, as well as tips on making home improvements that can help reduce electric bills. Any customers with questions can call Mississippi Power’s toll-free customer service line at 800-532-1502.

Mississippi Power offers rebuilding expertise and options

Hurricane Katrina has had a devastating effect on everyone in South Mississippi. As customers deal with the overwhelming task of rebuilding or repairing their homes, the opportunity to find timely, useful information is vital. As has always been the case, Mississippi Power’s marketing representatives are available to help provide information.

Customers can reduce their energy costs by rebuilding with energy efficient products and processes. From insulation to windows and doors, heat pumps to energy efficient fireplaces, lighting ideas to appliances, there’s a wealth of information available, much of which is also located on the company’s website.

“There are so many new technologies and building methods available these days that can help customers reduce their utility costs,” said Kurt Brautigam, company spokesman. “Our marketing representatives understand all of the issues related to new construction and remodeling. They can provide assistance with selecting qualified heating and cooling contractors.”

For customers interested in upgrading to an all-electric home, Mississippi Power is offering special financing. There is also a limited time $250 rebate for qualifying customers who want to convert their heating and water heating systems to electric.

“We know this is a particularly difficult time for some many people in South Mississippi,” said Brautigam. “All of us at Mississippi Power are trying to find ways we can help. We know our customers and they know us. We hope they’ll call if we can be helpful”

Mississippi Power’s toll-free customer service line is 800-532-1502. The company’s website address is www.mspower.com.

Watson Unit 5 comes back on line

Employees at Plant Watson gave the company and its customers a wonderful Christmas present when Unit 5 came back online at 4:30 a.m. Saturday, December 17 – eight days before Christmas and eight days ahead of schedule.

Plant Watson was unexpectedly deluged by 18 feet of water during Hurricane Katrina on August 29. The plant’s lower level was flooded, causing the entire facility to be shut down. From day one, employees worked long hours to repair the two major units and return them to operation.

“We returned Unit 5 to service in 110 days,” said Sam Sumner, Plant Watson’s manager. “This is a fantastic accomplishment, a massive effort that was accomplished safely and quickly.” Unit 4, which generates about 25 percent of the plant’s overall capacity, was brought back on line on October 14 – just 46 days after Hurricane Katrina. Unit 5 provides approximately half of the plant’s total output.

“These units are crucial to meeting the needs of customers across our electrical system,” said Sumner. “They normally operate continuously at full load because they are so economical.” Both units burn coal to generate electricity, by far the cheapest and most available fuel in North America.

To bring the units back on line, employees focused on the repair or replacement of numerous critical areas, including electrical junction boxes, control cables and power cables. Tens of thousands of parts had to be checked out and many of those had to be replaced.

Just as soon as the larger unit came on line, employees began preparing for the normal maintenance outages prior to the upcoming summer peak season. Unit 4 will undergo a 30-day maintenance outage, and following that Unit 5 is scheduled for an eight-week outage.

In addition, Units 1, 2 and 3 are now being repaired. These relatively smaller units, which normally do not run during the winter, also sustained major damage because of the saltwater surge. Plans call for having them restored and tested prior to May 1—in time for peak season availability.

“The employees at Plant Watson have done a tremendous job while facing daunting challenges,” said Sumner. “To come back so fast after such a catastrophic situation shows the dedication and commitment of this group. I am extremely proud of everyone here at the plant for their efforts, as well as the employees from Southern Company Services who assisted.”