Southern Company discloses Mississippi Power settlement agreement The Southern Company (SO) disclosed this morning that Mississippi Power and the Mississippi Public Service Commission entered into a settlement agreement. Under the terms of the agreement, Mississippi Power and the Commission shall follow certain agreed-upon regulatory procedures and schedules for resolving the cost recovery matters related to the Kemper IGCC. These procedures and schedules include the following: Mississippi Power’s filing within 30 days of the Settlement Agreement of a new request to increase rates in 2013 in an amount not to exceed $172M of financing costs to be recorded to a regulatory liability to be used to mitigate rate impacts when the Kemper IGCC is placed in service; the Commission’s decision on that matter within 50 days of Mississippi Power’s request; Mississippi Power’s collaboration with the Mississippi Public Utilities Staff to file with the Commission within three months of the Settlement Agreement a rate recovery plan for the Kemper IGCC for the first seven years of its operation, along with a revenue requirement under such plan for 2014; the Commission’s decision on the rate recovery plan within four months of the filing; Mississippi Power’s agreement to limit the portion of prudently incurred Kemper IGCC costs to be included in rate base to the $2.4B certificated cost estimate, plus costs related to the lignite mine and carbon dioxide pipeline; provided that this limitation will not prevent Mississippi Power from securing alternate financing for any prudently incurred Kemper IGCC costs not otherwise recovered in any Commission rate proceeding contemplated by the Settlement Agreement; and the Commission’s completion of its prudence review of the Kemper IGCC costs incurred through 2012 within six months of the agreement.
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