Summary
This 8-K filing from Southern Company (SO) and its subsidiary Mississippi Power Company details the financial impact and recovery efforts related to Hurricane Katrina, which occurred in August 2005. Mississippi Power has received a $276.4 million Community Development Block Grant (CDBG) from the Mississippi Development Authority (MDA). This grant will be primarily used to offset the substantial storm restoration costs incurred by Mississippi Power, with $267.6 million allocated to retail storm restoration and the remainder to wholesale costs. Further, the Mississippi Public Service Commission (Mississippi PSC) has authorized the issuance of $121.2 million in system restoration bonds. These bonds, which will be obligations of the State of Mississippi, are designated to cover the remaining retail storm restoration costs not covered by the CDBG, contributions to Mississippi Power's property damage reserve, and the construction of a storm operations facility. While these measures aim to mitigate the financial burden, the ultimate financial outcome remains uncertain.
Key Highlights
- 1Mississippi Power Company received a $276.4 million Community Development Block Grant (CDBG) to help mitigate storm restoration costs from Hurricane Katrina.
- 2Of the CDBG funds, $267.6 million will be applied to Mississippi Power's retail storm restoration costs.
- 3The Mississippi Public Service Commission (PSC) has certified total storm restoration costs of $302.4 million for Mississippi Power.
- 4A financing order authorizes the issuance of $121.2 million in system restoration bonds.
- 5These bonds will be obligations of the State of Mississippi and will cover remaining retail storm costs, property damage reserves, and construction of a storm operations facility.
- 6The PSC has certified $292.8 million of the total storm restoration costs as applicable to Mississippi Power's retail jurisdiction.
- 7The ultimate outcome of these storm cost recovery matters cannot be determined at this time.