What is the main event being reported in this amended filing?

This amended filing (8-K/A) provides updated information regarding an order issued by the Mississippi Public Service Commission (MPSC) concerning Mississippi Power Company. The MPSC approved Mississippi Power's request to reclassify 266 megawatts of Plant Daniel generating capacity to jurisdictional cost of service for retail rate recovery purposes.

What is the financial impact of the MPSC order on Southern Company and Mississippi Power?

The MPSC order is expected to result in a $4.5 million after-tax increase in earnings for the period from January 1, 2004, to April 30, 2004. This impact will be recognized in the second quarter of 2004. Additionally, the company will amortize a $60.3 million regulatory liability over several years, with portions recognized each year from 2004 through 2007.

How will the regulatory liability be recognized in earnings?

Mississippi Power will amortize the $60.3 million regulatory liability as follows: $16.5 million in 2004, $25.1 million in 2005, $13.0 million in 2006, and $5.7 million in 2007. This amortization is a key component of how the MPSC order affects reported earnings.

Are there any changes to Mississippi Power's rate-setting mechanism?

Yes, the MPSC also approved changes to Mississippi Power's Performance Evaluation Plan (PEP). These changes include the adoption of a forward-looking test year, annual rather than semi-annual filings, and modifications to performance indicators. Rate changes under the revised PEP will be capped at 4% of retail revenues annually, with a full review of PEP scheduled for 2007.

SOUTHERN CO 8-K SEC Disclosure

Summary

This filing is an amendment (8-K/A) to a previous Current Report on Form 8-K, primarily addressing an order from the Mississippi Public Service Commission (MPSC) concerning Mississippi Power Company, a subsidiary of The Southern Company. The MPSC approved Mississippi Power's request to reclassify 266 megawatts of generating capacity at Plant Daniel units 3 and 4 to jurisdictional cost of service, effective January 1, 2004. This allows the related costs and revenue credits to be included in retail rate recovery calculations. The order also impacts the amortization of a regulatory liability previously established by the MPSC. Mississippi Power will amortize a $60.3 million liability over several years, recognizing portions in 2004 ($16.5 million), 2005 ($25.1 million), 2006 ($13.0 million), and 2007 ($5.7 million). The cumulative impact of the MPSC order on earnings from January 1, 2004, through April 30, 2004, is an increase of $4.5 million after tax, which will be reflected in the second quarter 2004 financial statements.

Key Highlights

1The Mississippi Public Service Commission (MPSC) has approved Mississippi Power's request to reclassify 266 MW of Plant Daniel generating capacity to jurisdictional cost of service.
2This reclassification is effective retroactively from January 1, 2004, allowing recovery of related costs and revenue credits in retail rates.
3A previously established $60.3 million regulatory liability will be amortized to earnings between 2004 and 2007.
4Amortization of the liability is scheduled as follows: $16.5 million in 2004, $25.1 million in 2005, $13.0 million in 2006, and $5.7 million in 2007.
5The MPSC order is expected to increase Mississippi Power's and Southern Company's earnings by $4.5 million after tax for the period January 1, 2004, through April 30, 2004.
6The filing also notes approval of changes to Mississippi Power's Performance Evaluation Plan (PEP), including a forward-looking test year and annual filings, with rate changes limited to 4% annually.
7This amendment clarifies the methodology for computing the impact of the MPSC order on earnings, which will be recorded in Q2 2004.

SOUTHERN CO 8-K/A Report (Jul 14, 2004)

Summary

Key Highlights

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