Meridian Star

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December 29, 2012

Southern Co. faces risks on Miss. power plant

(Continued)

DEKALB — "We are the Saudi Arabia of coal — very high quality stuff. We've got to find a way to continue to preserve that important national energy resource to be used for the benefit of our citizens," Fanning said. "What we're doing here in Kemper County, I think, may be a way forward for coal in America. It is that important."

The Sierra Club — which opposes coal-burning plants nationally — claims the plant could harm the environment and raise customer bills by 45 percent or more. Mississippi Power says the rise in bills would be closer to 33 percent before falling.

Kemper, though smaller, may be financially riskier than Vogtle. In Georgia, Southern is already collecting its financing costs from ratepayers, and regulators are approving company expenditures every six months, though they can still challenge that spending at the end of the project. Mississippi Power — Southern's smallest subsidiary with 186,000 customers — hasn't won regulator approval to collect any money it's spent on Kemper.

The Mississippi Public Service Commission's decision to hold off on rate increases until legal challenges are resolved stunned executives and investors, especially considering a 2008 state law allowed rate increases during construction.

"That decision surprised the investment community and we saw it our stock price," Fanning said.

The Sierra Club says Southern should convert the plant to burn natural gas, an expense that could still be costly for shareholders and ratepayers. Opponents say Mississippi Power would end up spending less money than finishing Kemper, but the company would probably try to recoup the money it's already spent.

"I think they've painted themselves into a pretty tight little corner, said Louie Miller, head of the Sierra Club's Mississippi chapter. "They decided they were going to build this thing come hell or high water."

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