Summary
This 8-K filing from Southern Company (SO) on June 1, 2010, primarily concerns developments at its subsidiary, Mississippi Power, regarding the Kemper Integrated Coal Gasification Combined Cycle (IGCC) project. Following an April 29, 2010, order from the Mississippi Public Service Commission (PSC) with specific conditions, Mississippi Power filed a motion proposing alternatives. The key development is the Mississippi PSC's subsequent May 26, 2010, order, which revised its earlier findings. This revised order approved an alternate construction cost cap of up to $2.88 billion, subject to prudence reviews for costs exceeding $2.4 billion. It also established parameters for operational costs and revenues, and provided a framework for financing cost recovery on construction work in progress (CWIP) through May 1, 2014, with adjustments for government incentives and customer benefits. Mississippi Power accepted these revised conditions, signaling a step forward in resolving regulatory uncertainties surrounding this significant project.
Key Highlights
- 1Mississippi Power filed a motion with the Mississippi PSC on May 10, 2010, proposing alternatives to an April 29, 2010, order regarding the Kemper IGCC project.
- 2The Mississippi PSC issued a revised order on May 26, 2010, modifying its previous findings.
- 3The revised order approved an alternate construction cost cap of up to $2.88 billion for the Kemper IGCC project.
- 4Costs exceeding $2.4 billion within the cap are subject to Mississippi PSC determinations of prudence and public necessity.
- 5The order established operational cost and revenue parameters for the project.
- 6Financing cost recovery on Construction Work in Progress (CWIP) was approved under specific conditions through May 1, 2014, including accruals in 2010-2011 and recovery of 100% of CWIP in subsequent years, with adjustments for government incentives and customer benefits.
- 7Mississippi Power accepted the conditions of the May 26, 2010, order on May 27, 2010.