Summary
Southern Company's subsidiary, Mississippi Power, has reached a significant settlement agreement with the Mississippi Public Service Commission (PSC) regarding the cost recovery for its Kemper County energy facility. The Kemper Settlement Agreement, approved on February 6, 2018, sets an annual revenue requirement of approximately $99.3 million. This amount is lower than initially proposed ($112.6 million) primarily to reflect the impact of federal tax reform enacted in December 2017. The agreement also includes a disallowance of a portion of Mississippi Power's investment in the Kemper Facility, which the company had already recognized as a charge to income in the fourth quarter of 2017.
Key Highlights
- 1Mississippi PSC approved a settlement agreement for Kemper Facility cost recovery.
- 2Annual revenue requirement set at approximately $99.3 million, reduced due to federal tax reform.
- 3No recovery for costs associated with the gasifier portion of the Kemper Facility is allowed.
- 4Retail customer rates will reflect an annual reduction of approximately $26.8 million.
- 5The agreement specifies the return on equity (ROE) framework for 2018 and future years.
- 6Amortization periods for related regulatory assets and liabilities are set at eight and six years, respectively.
- 7Mississippi Power will modify its certificate of public convenience and necessity to limit operations to natural gas combined cycle.