Mississippi Power files appeal with Mississippi Supreme Court
Company takes action on behalf of customers to ensure lowest cost possible for the Kemper plant
Gulfport, Miss. – Today, Mississippi Power appealed to the Mississippi Supreme Court the Mississippi Public Service Commission’s (PSC) June 22 order denying the company any cost recovery until the legal challenges by the Sierra Club are resolved, a decision that effectively denies the company’s ability to collect financing costs of the Kemper plant while under construction making the project significantly more expensive for customers. This legal action, which includes a motion for interim rate relief, is necessary to save customers millions of dollars in interest costs.
The appeal will have the same impact to customers as the original request filed with the PSC. “The collection of interest costs for the plant during construction will accomplish two important objectives,” said Moses Feagin, vice president and chief financial officer. “One, to lower the overall cost of the plant for our customers, and two, to reduce the potential rate shock they would have otherwise experienced.”
The ability to collect financing costs during construction was authorized by the PSC in its 2010 final order granting the certificate to build the Kemper plant. It was this final PSC order that authorized and required Mississippi Power to begin construction.
Since the PSC’s cost recovery denial, Mississippi Power has received a credit rating downgrade with a negative outlook. Timely recovery of financing costs is critical to the company’s ability to maintain financial health and have access to capital needed in its everyday operations as well as in emergency situations when customers need it most.
Mississippi Power has an obligation to provide reliable, dependable and abundant energy to meet customer needs today and into the future. The Kemper plant is scheduled to be completed by May 2014.
Mississippi Power, a Southern Company subsidiary, serves approximately 185,000 customers in 23 southeast Mississippi counties.
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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 completion of the Kemper integrated coal gasification combined cycle facility (“Kemper IGCC”), effects of the appeal to the Mississippi Supreme Court, costs of construction of the Kemper IGCC facility and related customer price impacts as well as the future financial condition of Mississippi Power. 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; 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 facility, including PSC approvals, potential U.S. Department of Energy loan guarantees, the South Mississippi Electric Power Association purchase decision, utilization of investment tax credits, and the outcome of further proceedings regarding the PSC’s issuance of the certificate of public convenience and necessity; the ability of counterparties of Mississippi Power to make payments as and when due and to perform as required; interest rate fluctuations and financial market conditions and the results of financing efforts, including Mississippi Power’s credit ratings; and the impacts of any potential U.S. credit rating downgrade or other sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the availability or benefits of proposed U.S. Department of Energy loan guarantees. Mississippi Power expressly disclaims any obligation to update any forward-looking information.
For further information: Jeff Shepard 228.865.5543 or 1.800.821.6383 [email protected]