Mississippi Power Co. − a wholly owned subsidiary of electric
) - has received approval from the Mississippi Public Service
Commission (PSC) to increase customer rates by 15%. As a result
Mississippi Power will be able to recover the construction cost
of a new power plant in Kemper.
The new integrated gasification combined-cycle (IGCC) plant is
under construction at Kemper County and will have a capacity of
582 megawatt. Management forecasts construction costs of roughly
$3.5 billion, up from $2 billion projected earlier.
Mississippi Power had requested the commission to increase the
customer rate by 21% annually, in order to recover the financing
cost of the new plant. But the state regulator has approved to
increase the rate by only 15% for this year. However, as per the
commission's order, Mississippi Power will charge $156 million
annually from its customers from 2014 through 2020.
For those customers using 1.000 kilowatt-hours of power, the
commission has approved a 12% to 13% hike in rates. This would
come to a $16 increase in the monthly bill from Apr 2013 onwards.
Monthly bill will rise by additional 3% in 2014.
Mississippi Power - one of the four electric utilities that make
up Southern Company - is engaged in providing retail and
wholesale electric services to approximately 200,000 customers in
23 counties from the Gulf Coast to Meridian. It owns or has major
ownership interests in six generating facilities with net
dependable generating capacity of 3,166 MW.
Headquartered in Atlanta, Georgia, Southern Company is one of the
largest generators of electricity in the nation, along with the
Duke Energy Corporation
). Southern Company serves both regulated and competitive markets
across the southeastern U.S.
Southern Company's heavy reliance on coal-generated energy supply
and a lack of meaningful contribution from renewable energy is a
matter of concern. In the current age of growing emphasis on
'environment friendly or green' energy, the company may be forced
to divert cash flows to ensure regulatory compliance, which can
adversely impact profitability.
Southern Company currently carries a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one-to-three months.
In the electric utility space
Brookfield Infrastructure Partners LP
) displays better fundamentals and currently holds a Zacks Rank
#1 (Strong Buy).
BROOKFIELD INFR (BIP): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
EXELON CORP (EXC): Free Stock Analysis Report
SOUTHN COMPANY (SO): Free Stock Analysis
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