Mississippi Power Co. - a subsidiary of electric utility firm
) - has filed a request with state regulators to increase
customer rates, connected with the Kemper County energy facility,
by $172 million, in order to cover up the financing cost related
to the construction of the plant. The cost of the Kemper County
Lignite Plant is estimated to be around $3 billion.
Last week, Mississippi Power and Mississippi Public Service
Commission reached an agreement, which allows Mississippi Power
to seek higher customer rates for rising costs associated with
the plant. A day later the Mississippi power unit filed for the
current rate increase. If the regulators approve the company's
proposal, customer bills will rise by 21% by April.
Mississippi Power has planned to build the Kemper plant in the
Chickasawhay flood plain. The company will dig a hole of 100 feet
for extracting lignite - a wet, woody and low energy coal - to be
used as fuel for the 582-megawatt (MW) Kemper power plant. The
plant is one of the two integrated gasification combined-cycle
(IGCC) plants which are being constructed in the country.
The project is now almost 75% complete and is expected to be
online by May 2014. The development has already created roughly
12,000 direct and indirect jobs. Management believes that it will
create an additional 1,000 direct and indirect jobs once it
starts operation and will also contribute millions of dollars as
tax payment to the economy of Mississippi.
Mississippi Power 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
) - which serves both regulated and competitive markets across
the southeastern U.S.
Southern Company currently retains a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one to three
In the electric utility space
) displays better fundamentals and currently holds a Zacks Rank
#1 (Strong Buy).
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