Mississippi Power Issues Statement Regarding Rate Filing, Kemper County Energy Facility Progress and Schedule

Mississippi Power filed a rate plan with the Mississippi Public Service Commission that would allow current rates for recovery of portions of the Kemper project to remain in place.

Mississippi Power

Mississippi Power, a division of Southern Company (No. 44 on the DiversityInc Top 50 Companies list) filed a rate plan with the Mississippi Public Service Commission that would allow current rates for recovery of portions of the Kemper project to remain in place. If approved, the filing will not increase customer bills. Also today, the company submitted its monthly status report for the project.

Mississippi Power is not filing for a full rate review on recovery of the project’s costs at this time. The company and the Mississippi Public Utilities Staff have been discussing the status of the project and the nature and timing of a rate filing to address recovery of the remainder of the Kemper project costs not currently in rates. Mississippi Power continues to develop a traditional rate case and a rate mitigation plan to address these costs; however, the timing of that filing is uncertain.

The component of the Kemper project currently being recovered in rates includes a portion of the project’s combined cycle generating plant, which has been supplying approximately one-third of the electricity used by Mississippi Power customers since August 2014. The plant has primarily been using natural gas as fuel, but has also been using syngas from the project’s gasifiers during testing and operation at periods throughout the year.

Mississippi Power said it expects the facility to be in service by the end of June. The schedule adjustment is needed due to required maintenance activities conducted during May that extended the time necessary to establish sustained, integrated operation of both the project’s gasifiers for syngas production used to produce electricity.

The Kemper project has achieved periods of integrated operation of both gasifiers and combustion turbines and has been producing sulfuric acid and ammonia as well as capturing and transferring CO2. The project has operated a total of approximately 200 days using lignite.

Based on the experience gained from lignite operations and syngas production, Mississippi Power has completed its evaluation of certain additional improvement projects related to plant performance, safety and operations. These projects are anticipated to be completed over the next several years after the plant is placed in service.

The company’s April report to the Mississippi Public Service Commission reflects capped cost increases of approximately $186 million. These costs are subject to the cost cap and will be paid by Southern Company and Mississippi Power – not by Mississippi Power customers. The costs include a net adjustment of approximately $22 million related to the schedule extension to the end of June and approximately $164 million related to the operational improvement projects.

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