JACKSON, Miss. — Facing political pressure to give a utility what it wanted, the Mississippi Public Service Commission on Thursday balked.
The utility regulators voted 3-0 to reject a request to set terms of a debate over customer rates in a way favored by Mississippi Power Co.
“Basically, it was to approve what they filed, and basically, we said no,” Southern District Commissioner Sam Britton, a Republican, said of the vote.
The commission instead will maintain its current plan for deciding on rates to pay for part of the company’s Kemper County power plant. The unit of Atlanta-based Southern Co. had asked commissioners to reconsider and schedule a vote on the company’s proposal.
“What we asked for was for them to look at our stipulation and to vote on the original timetable,” said company spokesman Jeff Shepard.
Instead, a slower process will continue, in which Mississippi Power, the Public Utilities Staff and others can present rate proposals, setting up a wide-ranging hearing in December ahead of a vote by the three elected commissioners.
Southern has already absorbed $6 billion in losses on the $7.5 billion plant, after suspending efforts to complete a unit designed to turn soft lignite coal into synthetic gas. The commission let Mississippi Power raise rates by 15 percent in 2015 to recover $800-million-plus for part of the plant that has been burning natural gas since 2014. But it’s still to be resolved whether customers or shareholders will pay for hundreds of millions in assets.
Mississippi Power proposes maintaining current rates over a longer period, while the staff, a separate agency from the commission, proposes more rapidly declining rates.
The utility and the staff couldn’t reach a deal, which led the commission to decree the current process. Commissioners still urge talks between Mississippi Power and the staff, but staff Executive Director Virden Jones said Thursday that no formal talks are ongoing.
The company returned to argue that its settlement proposal, agreed to with some outside groups, was the only one that met commission parameters. Those include no rate increase, running the plant only on natural gas, and preventing customers from paying for the gasifier. Among those who endorsed the plan were the Lauderdale County board of supervisors, the city of Meridian, the city of Gulfport and a group of 10 state lawmakers.
The staff and company opponents warned that proposal could require customers to pay for part of the gasifier.
Central District Commissioner Cecil Brown, a Democrat, said a settlement excluding the staff “doesn’t pass the smell test.”
“Mississippi Power Co. did not garner support from any ‘opposing’ party (i.e., any party that could be described as having interests that are not aligned with Mississippi Power Co.’s),” the commission wrote in its order.
Commissioners wrote that Mississippi Power made “an ultimatum of sorts” that it would seek to recover gasifier money barring a vote on its proposal. But commissioners reiterated that they could act to further financially penalize Mississippi Power, including ordering the company to show why it should get any money for Kemper at all.
Both Brown and Britton said they believe an appeal to the state Supreme Court is a strong possibility no matter what commissioners do.
“I think everybody’s building a record,” Brown said. “They’re reserving all their rights, we’re reserving all our rights.”