Mississippi Power’s March 2013 rate increase reversed
BY MARY PEREZ
email@example.com Twitter: MaryPerezSHFebruary 12, 2015 Updated 15 hours ago
ROGELIO SOLIS/ASSOCIATED PRESS/FILEMississippi Power’s Kemper County energy plant is near DeKalb.ROGELIO V. SOLIS — AP
Mississippi Power customers will get a refund on their bills after a Mississippi Supreme Court decision Thursday reversed the March 5, 2013, rate increase granted the energy company by the Public Service Commission.
The PSC had approved by a 2-1 vote the 18 percent rate increase to help pay for the plant Mississippi Power is building in Kemper County.
The Supreme Court decision directed the PSC to:
n Order the return to the rates that were in force March 5, 2013.
n Allow no increases until the commission complies with the court’s opinion.
n Order Mississippi Power to refund the money attributed to the rate increase.
The PSC also was to told to provide notice to ratepayers of any future proceedings dealing with rates and prudency hearings.
“Ratepayers should not be bound by decisions made by the commission, which do not comport with the laws of our state,” the order said. “This court will not condone the forced payments for rate increases not authorized by the act or existing law.”
In a statement, the company said, “Mississippi Power
is reviewing today’s ruling by the Mississippi Supreme Court. It’s important to note that by approving the 18 percent increase in the 2013 rate plan, the Commission significantly mitigated what would otherwise have been a base rate increase of at least 35 percent. Our focus remains on developing a solution that is in the best interest of our customers.”
Mike Adelman, a Hattiesburg attorney who represented plaintiff Thomas Blanton in the lawsuit against Mississippi Power and the PSC, called Thursday’s decision “a fantastic victory.”
He described Blanton as a businessman and a citizen of Hattiesburg, and said Blanton narrowly lost in the primary when he ran for a seat on the PSC.
In the 42-page decision, Adelman said, “there’s some strong language.”
The decision said, “An analysis of these proceedings leads to the inescapable conviction that the commission failed to fulfill its duties and obligations pursuant to statutory directives and our existing law and that the overwhelming majority of 186,000 ratepayers was not accorded due process from the beginning.”
Adelman said the court upheld Blanton’s objections to the private meetings and settlement agreement between PSC and Mississippi Power.
“This has been our position all along. This is the people’s work,” Adelman said.
The PSC voted for the rate increase in 2013, with Lynn Posey and then-Commissioner Leonard Bentz voting for it and Brandon Presley against it.
Steve Renfroe, who was appointed to fill Bentz’s term after he left the commission, said Thursday, “Our legal staff is still reading and trying to fully understand the decision that came out today.”
Renfroe said, “It’s sort of a pay-me-now, pay-me-later issue. Will the ratepayers get a refund? It appears so.”
But will the cost the ratepayers ultimately have to pay for Kemper remain the same? “It appears so,” he said.
“That money has been going into something I think of as an escrow account,” he said. The purpose of the rate increase was to begin paying for Kemper early so there wouldn’t be a spike in rates later, he said.
“The overall thrust of this is the commission was trying to do a good thing by having a smaller increase over a period of time,” he said, rather than a larger increase when the prudency hearings are held after the Kemper plant is operational.
“The Supreme Court has taken issue with that,” he said.
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- Here’s the presiding justice for the majority’s opinion which totally destroys the opinion of PSC Commissiors Bentz and Renfroe, who have been acting as corporate stooges for MS Power:
(From the AP report:)
“Presiding Justice Michael Randolph, writing for the court’s majority, said the PSC failed to “balance the ratepayers’ interests with those of the utility, as our law requires.”“An analysis of these proceedings leads to the inescapable conviction that the Commission failed to fulfill its duties and obligations pursuant to statutory directives and our existing law and that the overwhelming majority of 186,000 ratepayers was not accorded due process from the beginning,” Randolph wrote in the decision.Randolph said the PSC will order refunds paid to Mississippi Power ratepayers. He said the commission in the future will provide notice to the ratepayers in about hearings related to rate base, rates, rate of return and prudency.”Now who do you believe the PSC stooges or the majority of the MS Supreme Court? Hand over our money now MS Power. You can settle with your stooges later.
A crime was committed. Tom. We always knew this. This is exactly how crony capitalism works. It’s the norm. Criminal prosecution is the only thing that keeps it in check.
Oh I quite agree Will. I need to start getting busy on a book as I think I’m better able to predict the outcome. Thomas Blanton is going for the jugular and he told me so months ago. Looks like he’s well on his way, too! MS Power is going to run out of money to finish this disaster. When all the public officials are crooks, then a civil suit does quite well! We should sue for millions in damages, too, and leave Leonard Bentz and Haley Barbour penniless. That would be justice!!
Make no mistake about it, this is great news for the 186,000 ratepayers of MS but it is an enormous financial blow to MS Power which was over its head when they planned this atrocity. Customers should be getting about a 15% refund on their electric bill from 2013 and 18% from 2014 Read this also from the AP report:
“In March 2013 the PSC approved an immediate 15 percent increase followed by a 3 percent increase in 2014. Atlanta-based Southern Company said it could start paying off debt related to the Kemper plant.
The PSC decision allowed Mississippi Power to collect $125 million for 2013, escalating to $156 million in 2014. The Kemper project has been plagued with cost overruns. Earlier this month, Southern Co. said it will spend at least another $45 million to finish the power plant, pushing total costs to nearly $6.2 billion.”
The Southern Co of GA, parent of MS Power, is undoubtedly having one big emergency meeting!
That is rich . . . Can MPC appeal to the SCOTUS?
MPC didn’t do anything wrong. This decision was based on the way the PSC handled the hearing process. The PSC was the one that should’ve held the prudency hearings, not MPC.
It’s absolutely amazing that the overtly pro-business state Supreme Court handed down this decision.
What it might mean is that there is much more corruption involved in the Kemper saga than we’ll ever know about. This could be the tip of great big ole iceberg of conflict of interest and dirty dealing.
Send in the US Attorney General.
so this applies to all MP customers, including those on the coast? Or?
Nice to get a refund but, what if your a stockholder? Many customers on the coast hold stock in Southern Company!
Some of SO’s institutional shareholders are not going to like this either.
That’s one reason why the PSC is supposed to hold utilities to the “prudent and necessary” standard. Doing otherwise hurts the public interest. There’s criminal negligence here. A crime was committed. Bring in the AG.
COMMENTS BY LOUIE MILLER
DIRECTOR, MISS. SIERRA CLUB
Feb 13 at 9:50 AM
This represents (to my knowledge) the first time a Baseload prepay Act has successfully been challenged and overturned.
. Passed in 2008, it was a ALEC bill that changed the utility principal of “used and useful” (ratepayer does nor begin paying until plant is operational) to forcing the ratepayer to be come the venture financier hence shifting the Risk from the Fortune 500 Utility and its shareholders to its captive customer base, even if the plant never works ie Kemper.
In essence giving the utility a “get out of jail free card’ regardless of decisions and outcomes.
This was passed in a number of States where Utilities were planning a large scale baseload plant; Indiana/Edwardsport IGCC, Georgia/Vogtle Nuke, Florida/FPL Nuke, South Carolina/Nuke and Mississippi/Kemper and the list goes on.
Last count roughly 12-15 States ended up passing some version.
This represents a decisive victory for Mississippi and a stinging rebuke for MPC and the two PSC Commissioners who foolishly allowed this to happen on their watch.
Hats off to Brandon Presley, Northern Commish, who steadfastly opposed these corporate shenanigans and now has the ‘bragging rights’ to say i told you so!
And lastly, Bravo! to Thomas Blanton and his attorney Mike Adelman, who stayed the course, despite all the slings and arrows, and gave a voice to all those who had none.
Stunning comes to mind….
FROM THE “TELEGRAPH”, MACON, GA
Miss. high court says PSC erred in rate case, orders refund
BY JACK ELLIOTT JR.
Associated PressFebruary 12, 2015
JACKSON, MISS. — Mississippi Power Company has been ordered to refund its customers for a rate increase put into effect in 2013 to begin paying for Kemper County power plant it is building.
The Mississippi Supreme Court ordered the refund Thursday. In a 5-4 ruling, the Supreme Court said the state Public Service Commission erred in granting the increase.
In March 2013 the PSC approved an immediate 15 percent increase followed by a 3 percent increase in 2014. Atlanta-based Southern Company said it could start paying off debt related to the Kemper plant.
The PSC decision allowed Mississippi Power to collect $125 million for 2013, escalating to $156 million in 2014.
The Kemper project has been plagued with cost overruns. Earlier this month, Southern Co. said it will spend at least another $45 million to finish the power plant, pushing total costs to nearly $6.2 billion.
Opponents said the plant is an expensive mistake that customers shouldn’t have to pay for. The plant would take soft lignite coal and turn it into a gas that would be burned to generate power. Along the way, the plant would extract carbon dioxide and other substances from the lignite, selling the byproducts.
Thomas Blanton, a Hattiesburg resident and former PSC candidate, had challenged the constitutionality of rate increases to Mississippi Power.
Presiding Justice Michael Randolph, writing for the court’s majority, said the PSC failed to “balance the ratepayers’ interests with those of the utility, as our law requires.”
“An analysis of these proceedings leads to the inescapable conviction that the Commission failed to fulfill its duties and obligations pursuant to statutory directives and our existing law and that the overwhelming majority of 186,000 ratepayers was not accorded due process from the beginning,” Randolph wrote in the decision.
Randolph said the PSC will order refunds paid to Mississippi Power ratepayers. He said the commission in the future will provide notice to the ratepayers in about hearings related to rate base, rates, rate of return and prudency.
Four other justices said state law allows utilities to collect from customers for new plants before they start producing electricity.
Presiding Justice Jess Dickinson, writing for the minority, said law “supports legitimate governmental interests, including the development and use of new technologies to expand energy production within the state.”
Mississippi Power wants a rehearing before it refunds $257M
Posted: Feb 13, 2015 1:40 PM CSTUpdated: Feb 13, 2015 3:29 PM CST