Jackson Free Press

JACKSON, Miss. (AP) — Mississippi regulators plan to discuss at a Tuesday meeting how to obey a state Supreme Court order to refund about $350 million that Mississippi Power Co. has collected from customers to build a power plant in Kemper County.

The Supreme Court ruled in February that an 18 percent rate increase was illegal because regulators didn't conduct hearings to ensure Mississippi Power was spending prudently on the $6.2 billion Kemper plant. It also ruled that regulators used an illegal rate structure, didn't notify all ratepayers and broke public meetings law by negotiating a deal in private.

The Public Service Commission, Mississippi Power and some business groups asked the court to reconsider, but the court reaffirmed its ruling in June.

Now, commissioners must sort out how the refunds will be issued.

All three commissioners said Monday that they favor giving customers a choice between refund checks or credits on future bills. Typical residential customers could have hundreds of dollars at stake.

"I think the majority of consumers will want checks and should get checks if they want," Public Service Commission President Lynn Posey said.

Though Mississippi Power accounted for the money separately, the unit of Atlanta-based Southern Co. spent it on the $6.2 billion plant and could have to issue debt to pay the $350 million.

"I think they'll have to borrow the money to send it out," said Posey, a Republican from Union Church.

Mississippi Power is under financial pressure. What it calls Plant Ratcliffe is years behind schedule and billions over budget, and the company must return a $332 million deposit to South Mississippi Electric Power Association after it dropped plans to buy part of Kemper. Fitch Ratings then downgraded Mississippi Power's credit rating.

Northern District Commissioner Brandon Presley, a Nettleton Democrat, said he expected commissioners would act Tuesday to roll back the rate increase enacted in March 2013. He and other commissioners said they expected it would take several months to work out refund methods.

Any rate decrease could be short-lived. Mississippi Power filed three plans to increase rates after the court ruling. The company says it will use state law to enact the steepest increase on Sept. 12 if commissioners don't act by then. Residential customers who pay $144 a month now could see rates rise as high as $181 a month. Mississippi Power's 186,000 customers from Meridian to the Gulf Coast would pay $273 million more in the first year and $395 million in the second year under one scenario.

In a filing last month with the commission, Mississippi Power urged further consideration on how refunds should be issued.

"The issue is much larger than simply 'issuing checks,'" spokesman Jeff Shepard wrote in an email Monday.

The man who filed the lawsuit that forced the refund order, though, says Mississippi Power is stalling.

"Mississippi Power Company is singularly committed to avoid paying the refund ordered by the Supreme Court," a lawyer for Tommy Blanton, a Hattiesburg oilman who's running for the southern district commission seat as a Democrat, wrote in a June 29 filing.

For Blanton, the answers are simple: "The refund should be a check to customers. The money was unjustly taken from the customers and should be returned immediately."