Biloxi Sun Herald:
Moody’s Investors Service on Wednesday downgraded Mississippi Power’s ratings, saying the action in part reflects the expected battle the company will have to wage to recover its costs for “the increasingly uneconomic Kemper integrated gasification combined cycle plant.”
The downgrade is on approximately $800 million of debt securities.
Moody’s began the rating review Feb. 6 after Mississippi Power again delayed the in-service date of the energy facility in Kemper County using lignite. Mississippi Power has since announced that at current low natural gas rates, the facility can operate more economically on gas than on lignite coal.
That could raise questions about the merits of operating on lignite at all, which Moody’s said “will lead to a higher degree of regulatory, political, and public scrutiny of the plant at a time when the utility intends to pursue critical rate recovery proceedings and a determination of prudency, which has not yet occurred.”
Mississippi Power is required to file a rate case on the Kemper plant by June 3 and Moody’s said, “The construction delays, higher operating costs, and lower natural gas prices will put the Mississippi Public Service Commission in a difficult position of being asked to approve rate recovery and a return on a plant that is much less competitive and more expensive to run than originally envisioned.”