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Kemper settlement could mean 25 percent rate jump

Published on NewsOK Modified: January 25, 2013 at 8:33 pm •  Published: January 25, 2013
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Mississippi Power plans to sell bonds to pay for costs incurred above $2.4 billion on the plant itself, collecting from customers to pay principal and interest, but not for any profit. To do that, Mississippi Power will need legislation. Bills have been introduced by Senate Energy Committee Chairman Terry Burton, R-Newton, and House Public Utilities Committee Chairman Jim Beckett, R-Bruce.

Burton's bill (SB 2755) says ratepayers couldn't get out of paying the charges, even if Mississippi changes its monopoly power market to allow small customers to choose another electric company. The bill says up to $1 billion in bonds can be issued, for construction costs approved by the PSC. Mississippi Power said it would set up a special entity to sell the bonds.

Spokeswoman Christy Ihrig said that the company believes a previous $2.88 billion cap on costs no longer exists because of the settlement.

Some studies have warned that the plant's cost could exceed $3 billion. The company says it's spent $1.99 billion through the end of November at the site north of Meridian. The company says all work on what it calls Plant Ratcliffe is 75 percent complete, while construction itself is half done.

Fanning expressed confidence that lawmakers would pass the bonding bill. "We believe the project is good for Mississippi, good for the customers, and has widespread support," he said.

Opponents, though, still exist. Michael Adelman, Blanton's lawyer, wrote in motions filed Friday that the settlement should be tossed because Blanton was excluded from talks even though he's a participant in the case.

Mississippi Power and PSC, in asking the court to dismiss the case, said it's not time to decide the constitutionality of the law, but Adelman wrote that the deal to consider the $172 million rate increase made it "more vital than ever" that the court hear Blanton's argument.

If the court doesn't throw out the settlement, it should at least freeze the rate increase until the court rules on constitutionality, Adelman wrote, calling "the confiscatory aspect" of the charge "more apparent than ever."

The company says the plant will begin operating in May 2014.

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Follow Jeff Amy at http://twitter.com/jeffamy