JACKSON, Mississippi — Southern Co. announced Tuesday that it projects at least another $26 million in spending to complete its construction of a power plant in eastern Mississippi, pushing the total cost to nearly $6.2 billion.
It's unclear right now how Mississippi Power Co., a unit of Atlanta-based Southern, will pay for the plant it's building in Kemper County. The state Supreme Court on Feb. 12 struck down previous financing arrangements. The company says it will ask the court to reconsider that ruling, which ordered more than $200 million in refunds and instructed regulators to roll back an 18 percent rate increase they'd approved.
A two-member majority of the Public Service Commission wants the Mississippi? Supreme Court to reconsider the motion as well, discussion at a Tuesday meeting showed. Northern District Commissioner Brandon Presley moved to not seek rehearing, but his motion died for lack of a second vote.
Southern District Commissioner Steve Renfroe said the regulators would like to preserve the previous framework, worked out in closed-door settlement talks that the high court lambasted as illegal. That's because the settlement said customers would pay $2.4 billion of the plant's price, plus pay for up to another $1 billion in bonds that Mississippi Power wouldn't make a profit on. That didn't count additional hundreds of millions for costs of a lignite mine and pipelines.
In any event, customers could have to pay some of the charges announced Tuesday should regulators approve. The charges are interest on the project, and are outside the cost cap.
Without the settlement, though, Mississippi Power could seek to have customers pay more of the $6.2 billion it's spent, subject to commission approval. Southern had been on track to absorb more than $2 billion in overruns.
For its part, Mississippi Power spokesman Jeff Shepard said company lawyers now believe the ruling kills the possibility of the bond issue as well. The Supreme Court ruling said nothing about the law allowing the bond issue and Renfroe said commissioners hadn't discussed that aspect in depth.
Because the company can no longer collect money now to offset construction costs and because the bond issue may be foreclosed, Mississippi Power has sent letters in recent days to its 186,000 customers from Meridian to the Gulf Coast warning of possible rate increases. It said increases could be on the order of 35 percent to 40 percent, instead of the 22 percent to 24 percent previously projected.
"Even if the ruling is upheld and refunds are ordered, it is only a temporary relief because if the Supreme Court's ruling is carried out, it will actually result in higher rates and bills," the company warned.
The plant and associated lignite mine were originally supposed to cost about $2.8 billion.
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