Gulfport, Miss. – Mississippi Power and the Mississippi Public Service Commission today jointly agreed to withdraw pending litigation regarding customer rates relating to the Kemper County energy facility. An agreement also was reached to establish a blueprint for the facility’s cost recovery and other related items.

“I am pleased we are able to agree with the Public Service Commission on a plan to accomplish what our customers need,” said Mississippi Power President and CEO Ed Day. “This is truly a win for both this state and our customers. We believe in Mississippi’s future, and this state-of-the-art, environmentally responsible facility is truly something that all of us can be proud of.”

The Commission and Mississippi Power agreed to work at an expedited pace to:

• File for the recovery of revenue in 2013 which will be used to mitigate future rate impact associated with the Kemper project, not to exceed $172 million, within 30 days.
• Design a rate plan for the first seven years of the facility’s operation. The company agreed to limit the total rate base related to the power plant portion of the Kemper project to $2.4 billion plus any costs determined by the Commission to be appropriate.

The company will have the ability to seek alternate financing for project costs not otherwise recovered in any Commission rate proceedings contemplated by the settlement agreement.

“Now with a formal working agreement and an agreement to jointly withdraw the litigation regarding customer rates relating to the Kemper County energy facility, Mississippi Power is focused on completing the project to provide our customers an affordable energy source and stabilized rates for decades,” said Day. “Mississippi will be looked at by other states as a model in energy innovation in America.”

The project is on schedule for completion in May 2014 and is creating Mississippi jobs and will use a native Mississippi fuel—lignite. The project will be the first facility in the state to produce truly local energy. As Mississippi moves forward, this plant is expected to contribute continued economic growth to the region and the state and create jobs to attract further economic development.

Mississippi Power, a Southern Company subsidiary, serves approximately 186,000 customers in 23 southeast Mississippi counties with rates below the national average.

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Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning recovery of financing costs associated with the Kemper integrated coal gasification combined cycle facility (“Kemper IGCC”), customer rates, outcome of pending regulatory proceedings, completion of construction of the Kemper IGCC, creation of jobs and economic growth.  Mississippi Power cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Mississippi Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Mississippi Power’s Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; ability to control costs and avoid cost overruns during the development and construction of facilities, which includes projects involving facility designs that have not been finalized or previously constructed; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; regulatory approvals and actions related to the Kemper IGCC, including Mississippi Public Service Commission (“PSC”) approvals, potential U.S. Department of Energy loan guarantees, the South Mississippi Electric Power Association purchase decision, satisfaction of requirements to utilize investment tax credits and grants, and the outcome of any further proceedings regarding the PSC’s issuance of the certificate of public convenience and necessity; and the ability of counterparties of Mississippi Power to make payments as and when due and to perform as required. Mississippi Power expressly disclaims any obligation to update any forward-looking information.