Mississippi Power hearings won't be the end, barring deal

JACKSON, Miss. (AP) — Regulatory hearings scheduled to begin on Monday may not, after all, set final rates for Mississippi Power Co.'s $7.5 billion power plant.

In a Tuesday order , the Mississippi Public Service Commission says it won't immediately impose a ruling concerning the Kemper County plant if parties don't settle. Instead, commissioners said they'll restart a separate ratemaking proceeding. That could mean months more uncertainty over how much customers will pay. And that uncertainty, in turn could increase pressure on the unit of Atlanta-based Southern Co. to reach a settlement.

Commissioners in June opened a settlement proceeding, directing Mississippi Power, the Public Utilities Staff and others to seek an agreement. Commissioners said then that customers shouldn't pay for part of the plant meant to gasify coal and remove pollutants, that rates should stay level or go down, and that the plant should only run on natural gas, not gasified lignite coal as originally planned.

Mississippi Power offered a deal with some groups that it said met requirements, but the staff, a separate agency that advises commissioners, rejected it. The staff has said Mississippi Power is trying to recover some costs in the natural-gas burning unit that were inflated by the gasifier project. But Mississippi Power has repeatedly said it won't absorb any more than the $6 billion it's already lost on the plant.

Commissioners then set December hearings, promising a final decision in January. It appeared they intended to impose an order even if the parties didn't settle, but Mississippi Power repeatedly warned that commissioners were overstepping the legal authority of a settlement docket to do so, and instead needed a full rate case. Now, commissioners are conceding that point, which could reduce chances of a court challenge.

"If we went outside of the parameters, the question would be, is the order legitimate or not," said Central District Commissioner Cecil Brown, a Democrat.

Brown said it's unlikely, but possible, that commissioners would vote on a revised proposal that Mississippi Power filed earlier this month in conjunction with Chevron Corp. and others after next week's hearings. That agreement involved further company concessions, reducing the distance between staff and company positions to somewhere between $125 million to $175 million.

There's still a chance that the staff and company will reach a deal before Monday.

"Those discussions continue even today," Mississippi Power spokeswoman Cindy Duvall said in a Wednesday statement.

Brown said a last-minute settlement could delay hearings until after all the parties study and comment.