JACKSON, Miss. (AP) - Mississippi utility regulators voted unanimously Thursday to adopt a settlement cutting rates for consumers but paying Mississippi Power Co. for part of its $6.5 billion Kemper County power plant.
The agreement between the unit of Atlanta-based Southern Co. and the Public Utilities Staff, announced previously, lets Mississippi Power raise rates on its 186,000 customers by $126 million a year.
A residential customer using 1,000 kilowatt hours monthly, will see bills fall $5 to $139 monthly beginning in January. In August, as Mississippi Power warned that it was sliding toward insolvency, the commission had approved an 18 percent emergency rate increase, worth $159 million a year. Thursday's order will cut that increase to about 15 percent.
"We gave some but we got what we needed, we think, to get us back in the financial markets and maintain viability," Mississippi Power CEO Ed Holland said. The company has said that under current conditions, it can't borrow except with the assistance of parent Southern Co.
Because commissioners found the entire emergency rate increase wasn't justified, Mississippi Power will credit bills with an estimated $12 million in refunds within 90 days of the Dec. 17 rate change. Residential customers will get about $22.
Bills are likely to fall even more in February because the company has asked the commission to cut its fuel costs because of low natural gas prices. Typical monthly residential bills would fall another $14 to $125 a month.
In approving the settlement, commissioners found that the utility had acted prudently in constructing power turbines that have been making electricity by burning natural gas for more than a year, as well as in buying land and building power lines. The agreement will also let Mississippi Power recover some regulatory and financing costs. Those moves come despite opponents who questioned the company's spending and said it should get less or nothing at all.
"No evidence has been provided raising a 'serious doubt' as to the Kemper project's prudence in the proceeding related to the in-service assets, and the commission finds that all of the costs included in the approved revenue requirement are prudent," commissioners wrote in the order.
The commission did rule that it could go back and change its mind on some of the costs approved Thursday if later developments showed that spending had been imprudent. Regulators instructed Mississippi Power to file a fresh rate case within 18 months, and are likely to consider whether the company spent wisely on the remainder of the plant at that time.
Longtime Kemper opponent Brandon Presley, a Nettleton Democrat who represents the Northern District, voted for the change.
"I never met a rate decrease I didn't like," Presley said. "This I believe begins a practical approach of dealing with Kemper and the costs involved."