Summary
Southern Company's 8-K filing on February 13, 2015, primarily addresses a significant legal development concerning Mississippi Power's Kemper Integrated Gasification Combined Cycle (IGCC) project. The Supreme Court of Mississippi reversed a 2013 rate order, finding it unenforceable due to insufficient public notice and requiring refunds of collected rate increases, including carrying costs. The court also indicated that the prudency of Kemper IGCC costs should have been determined before approving rate recovery. This ruling presents a material uncertainty for Southern Company and its subsidiary, Mississippi Power. While Mississippi Power had collected approximately $257 million through rates under the reversed order by the end of 2014, only a portion had been recognized as income. The company is analyzing the court's decision and plans to seek a rehearing. The ultimate financial impact and resolution of this matter remain uncertain, although the ruling does not affect the project's certificate of public convenience and necessity.
Key Highlights
- 1Supreme Court of Mississippi reversed the 2013 MPSC Rate Order related to the Kemper IGCC project.
- 2The Court found the 2013 Settlement Agreement unenforceable due to lack of public notice.
- 3Mississippi Power is ordered to refund monies collected under the 2013 rate order, including carrying costs.
- 4The Court indicated that the prudency of Kemper IGCC costs should have been assessed before rate recovery approval.
- 5Approximately $257 million had been collected in rates for the Kemper IGCC project through December 31, 2014.
- 6Mississippi Power intends to file for a rehearing and the ultimate outcome is currently undetermined.
- 7The court's ruling does not impact the Certificate of Public Convenience and Necessity for the Kemper IGCC project.