Summary
This 8-K filing from Southern Company (SO) on November 17, 2015, primarily concerns an update on the rate recovery for costs associated with the Kemper Integrated Gasification Combined Cycle (IGCC) facility through its subsidiary, Mississippi Power Company. A significant development is the stipulation entered into on November 17, 2015, between Mississippi Power and the Mississippi Public Utilities Staff. This stipulation outlines a permanent rate recovery plan for the Kemper IGCC's in-service assets, proposing an annual revenue requirement of approximately $126 million. The agreement includes specific parameters for rate recovery, such as a return on common equity of 9.225% and a maximum common equity percentage of 49.733%. It also includes a prudence finding for all costs related to the in-service assets included in this revenue calculation. Upon approval of permanent rates based on this stipulation, interim rates collected since September 2015 will be reconciled, and customers will receive credits for the difference within 90 days. The ultimate outcome hinges on the Mississippi Public Service Commission's (PSC) approval, expected by December 8, 2015, and the filing of a subsequent rate request within 18 months.
Key Highlights
- 1Mississippi Power and Mississippi Public Utilities Staff have entered into a stipulation for permanent rate recovery of the Kemper IGCC facility's in-service assets.
- 2The stipulation proposes an annual revenue requirement of approximately $126 million for rate recovery.
- 3Key rate recovery parameters include a 9.225% return on common equity and a maximum common equity percentage of 49.733%.
- 4The stipulation includes a prudence finding for all costs associated with the in-service assets covered by the revenue requirement.
- 5Interim rates collected since September 2015 will be reconciled with the approved permanent rates, with customer credits issued for the difference.
- 6The stipulation is subject to approval by the Mississippi Public Service Commission (PSC), with a decision expected by December 8, 2015.
- 7Mississippi Power must file a subsequent rate request within 18 months of the PSC's order approving the in-service asset proposal.