WILSON: PSC’s Southern Commissioner discusses third option for Kemper financing. 


BY: Steve Wilson | Watchdog.org

  
Southern District commissioner Steve Renfroe suggested Tuesday the PSC could split prudency hearings on the Kemper Project’s combined cycle plant, which contains electricity-generating turbines that have run on natural gas since August.
Renfroe and Central District commissioner Lynn Posey aren’t running for their seats in November, so a partial prudency compromise could allow the commission to give Mississippi Power some financial relief. The PSC could also pass to the next commission in 2016 the tougher question of judging whether the costs incurred on Kemper’s gasifier — which turns lignite coal into a natural gas-like substance called synthesis gas to be burned in its electricity-generating turbines — are the responsibility of Mississippi Power or its customers through rate increases.

According to Mississippi Power, the gasifier is supposed to be operational by the first quarter of 2016.

“I would encourage you to give this commission another option,” said Renfroe, appointed by Gov. Phil Bryant to finish the term of former commissioner Leonard Bentz . “The particular one I had in mind would consider the equipment that’s already in operation. The combined cycle has been in operation for quite a while, and recovering those costs would be more straight forward in my view.

“I’m not suggesting an outcome on any of those options. I think it might reduce the risk of having nothing approved if you gave us another option and include at least the equipment that is already in service, as well as other costs that can be identified that might be ripe for recovery.”

Another reason for a possible compromise: The PSC could head off a large rate increase by Mississippi Power, which filed a three-tier rate plan with the commission a few months ago. The utility has threatened to enact a 41 percent rate increase if the commission doesn’t act on its case by Sept. 12. Renfroe said the legality of that action is “yet to be determined.”

The PSC rescinded Tuesday a previous rate increase of 18 percent to comply with a Mississippi Supreme Court decision .

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