* Electronic Copy * MS Public Service Commission * 9/19/2018 * MS Public Service Commission * Electroni

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1 * Electronic Copy * MS Public Service Commission * 9/19/2018 * MS Public Service Commission * Electroni BEFORE THE MISSISSIPPI PUBLIC SERVICE COMMISSION ÛQg MISSISSIPPI POWER COMPANY DOCKET NO UN-39 EC IN RE: NOTICE OF INTENT OF MISSISSIPPI POWER COMPANY FOR A CHANGE IN RATES TO ESTABLISH A RATE MITIGATION PLAN IN CONNECTION WITH THE KEMPER COUNTY IGCC PROJECT SUPPLEMENTAL NOTICE OF INTENT COMES NOW, Mississippi Power Company, ("MPC" or the "Company"), through its undersigned counsel and pursuant to the Mississippi Public Service Commission's ("Commission") Final Order issued on March 5, 2013, in Docket No UN-14 respectfully files this its Supplemental Notice of Intent for a Change in Rates to Establish a Rate Mitigation Plan in Connection with the Kemper County IGCC Project ("Supplemental Notice of Intent"), which will be applicable to MPC's customers in its certificated areas in the twenty-three (23) counties of southeast Mississippi, and in support thereof would show unto the Commission the following: INTRODUCTION 1. MPC is a public utility as defined in Section (d)(i) of the Mississippi Code of l972, as amended, and is engaged in the business of providing electric service to and for the public for compensation in twenty-three (23) counties of southeastern Mississippi, having its principal place of business at Gulfport, Mississippi. MPC's mailing address is Post Office Box 4079, Gulfport, Mississippi, MPC is the holder of a Certificate of Public Convenience and Necessity issued in Docket No. U-99, as supplemented from time to time, authorizing its operations in specified 1

2 areas of the twenty-three (23) counties of southeastern Mississippi and is rendering service in accordance with its service rules and regulations and in accordance with schedules of rates and charges, all of which are a part of its tariff that has been previously approved by order of this Commission. 3. MPC is a Mississippi corporation. A copy of its corporate charter, articles of incorporation, the names and addresses of its board of directorsand officers, and the names of all persons owning fifteen percent (15%) or more of its stock are on file with the Commission and are hereby incorporated by reference. BACKGROUND 4. On January 25, 2013, pursuant to the terms of a Settlement Agreement between MPC and the Commission,' MPC filed a Notice of Intent in Docket No UN-14 requesting an approximate 21% rate adjustment related to the Kemper Project consistent with the "Mirror" CWIP provisions of FASB No. 92. Thereafter, on February 26, 2013, MPC filed a Notice of Intent in this docket, pursuant to and in compliance with the terms of the Settlement Agreement, to establish a rate mitigation plan to govern rates related to the Kemper Project for the first seven years of plant operations. 5. On March 5, 2013, following a full hearing on the Company's Mirror CWIP request in Docket No UN-14, the Commission issued its Final Order adopting the Stipulation between the Mississippi Public Utilities Staff and MPC in nearly all respects, but choosing not to award the full 21% Mirror CWIP retail revenue adjustment requested by the Company. Under the Final Order, rather than providing one revenue adjustment in 2013 to apply 1 On January 24, 2013, MPC and the Commission entered into that certain Settlement Agreement that was designed to settle pending litigation between MPC and the Commission, and which established certain procedural requirements for both parties. 2

3 during the entire construction period, the Commission chose to stagger the Mirror CWIP revenue requirement over a two-year period beginning in Based upon the language of the Commission's Final Order, the decision to stagger or "ramp up" the revenue adjustment was based upon a desire to balance the needs of the Company with the impacts to customers. According to the Final Order, the approved adjustments will better allow families and businesses needed time to budget and prepare to absorb the full impact of the Mirror CWIP rate increase. 6. Specifically, the Commission reduced the Company's $172million Mirror CWIP annual revenue request to a maximum of $156million to be staggered and applied as follows: a) beginning with the first billing cycle of April 2013 and continuing through the last billing cycle of December 2013, the Company's annualized Mirror CWIP retail revenue requirement shall be $125million; and b) beginningwith the first billing cycle of January 2014 through April 2014, the Company's annualized Mirror CWIP retail revenue requirement shall be escalated to $156 million. These revenue adjustments represent increases of 15% for 2013 and 3% for The purpose of this Supplemental Notice of Intent is to present the required modifications of the Company's proposed and currently pending 7-Year Plan filed in this docket. While the Kemper Project retail revenue requirements contained in the 7-Year Plan remain unaffected by the Commission's March 5* rate Order, the modification of the "Mirror" CWIP recovery in the manner described above, affects the amortization of these funds in the 7-Year Plan, as well as the revenue collection required by the rates proposed under the 7-Year Plan, as shown in the supplemental direct testimonyand exhibits of Moses H. Feagin submitted herewith. 8. The proposed modified 7-Year Plan will still be effective beginning in January 2014, but the rate level approved in the March 5* rate Order will be equal to the rate level required under the revised 7-Year Plan presented herein. Therefore, the rate level for 2014 will 3

4 be the same under both the Mirror CWIP rates approved in Docket No UN-014 and under the 7-Year Plan as supplemented and modified herein.2 Beginning with the first billing cycle of May 2014, the Company will no longer be collecting Mirror CWIP and the rates and revenue collection levels prescribed under the 7-Year Plan will continue, such that customers will not experience a rate change in May Mr. Feagin's supplemental direct testimonyexplains that $126million in Mirror CWIP is required to be collected by the end of April 2014 to mitigate the rate impacts and to stabilize rates for the Kemper Project over the 7-Year Plan. Therefore, the Company also proposes, in the event that the CWIP revenues collected by the end of April 2014 are less than $126million, to use funds from other regulatory liabilities to make up the shortfall to fund the balance of $126 million. If the Mirror CWIP revenues exceed $126 million, the Company proposes to record these amounts to the regulatory liability to be used as directed by the Commission. SUPPORTING DOCUMENTATION AND INFORMATION 10. In support of this Supplemental Notice of Intent, the Company hereby submits the following supplemental information on which it will rely at any hearing on this request, all of which is incorporated herein by reference as if fully set forth in this Supplemental Notice of Intent: (a) The sworn pre-filed supplemental direct testimonyand revised exhibits of Mr. Moses H. Feagin, Vice President, Treasurer, and Chief Financial Officer, Mississippi Power Company; 2 TO clarify, throughthe revisions to the 7-Year Plan presented in this filing, MPC is not attempting to request an additional rate increase in 2014 above and beyond the increase provided in the May 5* Order. Rather, MPC's revisions are designed to ensure the 7-Year Plan is consistent with the rate relief granted in the May 5* Order. 4

5 (b) Exhibit (MHF-3 REVISED) which provides the revised amortization of the "Mirror" CWIP Regulatory Liability; and (c) Exhibit (MHF-4 REVISED) which is a revised Kemper Rate Recovery Rate Schedule "KRR." 11. Through its initial Notice of Intent and this Supplemental Notice of Intent, MPC has provided herewith all the information required under Section of the Mississippi Code of1972, as amended, RP 9.100(3) of the Commission's Rules and Schedule 2 of Appendix C of the Commission's Rules that is relevant to its request for rate relief. MPC submits that good cause exists to grant a waiver of any and all remaining filing requirements, and MPC respectfully requests a waiver of any remaining filing requirements. In addition, MPC respectfully requests that a limited waiver of RP 9.101(1) be granted, such that MPC may provide a supplemental notice to customers beginning with the first billing cycle following the conclusion of the Company's original notice to customers regarding the original 7-Year Plan filing, which date may be greater than 9 days from the date of filing of this Supplemental Notice of Intent. WHEREFORE, PREMISES CONSIDERED, Mississippi Power Company hereby requests that this Supplemental Notice of Intent be received and filed; that notice, if any, be given in the manner prescribed by law; that the Commission schedule and hold hearings on the Company's request in a timely manner; and that, after fully considering all the relevant information, this Commission enter an order approving the proposed 7-Year Plan and all related requests for relief connected thereto and granting any such further relief that the Commission deems necessary. 5

6 RESPECTFULLY SUBMITTED, this the 2Ä day of March, MISSISSIPPI POWER COMPANY BY: BALCH & BINGHAM LLP BY eo E. Manuel BEN H. STONE Mississippi Bar No TIMOTHY A. FORD Mississippi Bar No RICKY J. Cox Mississippi Bar No LEO E. MANUEL Mississippi Bar No BALCH & BINGHAM LLP P.O. Box 130 Gulfport, MS FAX 6

7 STATE OF MISSISSIPPI COUNTY OF HARRISON PERSONALLY appeared before me, the undersigned authority in and for the said County and State, within my jurisdiction,the within named LEO E. MANUEL, who after being duly sworn on oath acknowledged that he is Attorney for MISSISSIPPI POWER COMPANY and that for and on behalf of the said MISSISSIPPI POWER COMPANY and as its act and deed, he signed and delivered the above and foregoing instrument of writing for the purposes mentioned on the day and year therein mentioned, after first having been duly authorized by said MISSISSIPPI POWER COMPANY so to do, and that the statements contained in the foregoing instrument are true and correct to the best of his knowle ge, information and belief. EO E. MANUEL SWORN TO AND SUBSCRIBED BEFORE ME, this the day of March, Commission Expires: My : TRACY J. BOUMA : 7

8 CERTIFICATE OF SERVICE I, Leo E. Manuel, counsel for MPC in the above and foregoing filing with the Mississippi Public Service Commission on even date herewith, do hereby certify that in compliance with RP 6 of the Mississippi Public Service Commission's Public Utilities Rules of Practice and Procedure: (1) An original and twelve (12) copies of the filing have been filed with the Commission by delivery of the same to: Brian U. Ray Executive Secretary Mississippi Public Service Commission 501 North West Street Suite 201A Jackson, MS (2) An electronic copy of the filing has been filed with the Commission via to the following address: efile.psc@psc.state.ms.us (3) A copy of the filing has been mailed via U.S. Mail and electronic mail to all parties of record as provided below: Virden Jones Michael Adelman, Esq. Executive Director Adelman & Steen, LLP Mississippi Public Utilities Staff P. O. Box North West Street, Suite 301B Hattiesburg, MS Jackson, MS Robert C. Grenfell Robert B. Wiygul, Esq. Jeremy C. Vanderloo, Esq. Waltzer Wiygul & Garside Entergy Mississippi, Inc Iberville Drive P.O. Box 1640 Ocean Springs, MS Jackson, MS

9 (4) MPC has complied with or requested a waiver of all other requirements of the Commission's Rules. This the N day of March, E. MANUEL

* Electronic Copy * MS Public Service Commission * 8/13/2018 * MS Public Service Commission * Electroni

* Electronic Copy * MS Public Service Commission * 8/13/2018 * MS Public Service Commission * Electroni 5. The Company has repeatedly declared its need for pre-commercial operation rate relief since the