JACKSON, Miss. (AP) — As Mississippi Power Co. draws closer to collecting for the $3 billion-plus Kemper County plant it's building, a customer of the company wants the state Supreme Court to rule utilities can't raise rates for power plants before they start making electricity.
Thomas Blanton, a Mississippi Power customer from Hattiesburg, said 2008's Baseload Act is an unconstitutional tax.
"We're putting up money and receiving nothing in return, and that's not what the American way is supposed to be," Blanton said after Monday's hearing. He said an increase could cost his oil and gas business more than $10,000 a month.
Blanton's lawyer, Mike Adelman, argued before seven Supreme Court Justices that it's unconstitutional for the state to require customers to pay for power plant construction, "to take the place of what traditionally should be the investor," when there's no guarantee the plant will work as planned.
Blanton got his day in court after intervening in a case Mississippi Power filed seeking Public Service Commission approval to raise rates. The regulatory body denied the company's request last year to begin collecting money for the plant, and Mississippi Power then appealed to the high court. But the PSC and Mississippi Power settled Thursday, with the commission agreeing to consider a new request to raise rates during construction. Mississippi Power asked for a 21 percent rate increase Friday. That's $172 million a year, which would raise the typical residential rate by more than $20 a month.
The commission isn't obligated under the settlement to grant the increase, but agreed to rule on it within 80 days of it being filed.
The company and PSC told justices that it was too soon to rule on Blanton's challenge because he wasn't paying for the plant yet.
They also argued that the act is legal because rates can be collected not just in exchange for power, but for any service, such as building a new plant. They argued it doesn't matter that Blanton might die or sell his business before Kemper starts operation, or that the plant might never work at all.
"It is the money for any service provided by the utility," said Ricky Cox, a lawyer for Mississippi Power.