The judge said it's not his role to choose between coal or natural gas as a fuel source, stating that either course could pose financial risks to Mississippi Power's customers.
"It is for the commission, not the courts, to determine policy preferences on such matters as a 40-year solution for fuel diversity and price stability of fuels used in generation," Persons wrote.
Mississippi Power, a unit of Atlanta-based Southern Co., already has spent $1.88 billion on its Plant Ratcliffe.
Under state law, the company was supposed to have the opportunity to pay down some of that cost before the plant goes into operation in 2014. However, in a ruling that surprised Mississippi Power, the PSC voted 3-0 to deny any rate increases until the Sierra Club's legal challenges had run its course. At the time, commission members said they didn't expect to act until the state Supreme Court had heard the case again.