Ellington

With a series of court fights and regulatory uncertainty mostly behind them, Mississippi Power Co.'s stockholders will get a clear picture of the utility company's financial wellbeing at a first-quarter earnings call on Wednesday, April 24. If recent trends hold up, it could be a good day for shareholders of MPC and its parent, Southern Co.

MPC's 582-megatwatt Kemper IGCC coal-fired power plant is now more than 80 percent complete. Since January, Southern's stock price has risen steadily from just above $42 in January to around $48.50 this week.

Last week, Southern announced that it would pay out a dividend for the 12th consecutive year. Stock awards bolstered incomes of Mississippi Power executives who earned $5 million in compensation in 2012. Edward Day, MPC's chief executive officer, saw his base salary and stock awards go from $694,660 in 2011 to $721,652 in 2012.

Investors are likely breathing a sigh of relief at the positive motion. This time last year, it seemed that Kemper was dragging Mississippi Power and Southern over a financial cliff. Two separate credit agencies downgraded the utilities' credit ratings amid an ongoing dispute with environmental advocates and strident coal foes, the Sierra Club.

A win against the Sierra Club and action by Mississippi officials seems to have stopped the bleeding. But as the profit picture gets rosier for MPC's investors, its ratepayers have far less to celebrate.

In addition to Mississippi legislators' authorizing the Kemper companies to issue up to $1 billion in bonds on the $2.8 billion plant, the Mississippi Public Service Commission signed off on a 15-percent electric-rate increase on customers, effective immediately.

The decision also affected nonprofit rural electric cooperatives, which maintain their own infrastructure but purchase electricity wholesale from MPC. One such organization, East Mississippi Electric Power Association, cited the Kemper-
related rate increase for having to raise rates on its 37,000 customers by 9.3 percent.

Mississippi Power argues that state law empowers the company to recover prudent costs through rate hikes, but we question the prudence, to say nothing of the fairness, of stacking the burden of paying for Kemper on the backs of ratepayers, in a county where more than 20 percent of families and people over 65 live below the poverty line.

The imbalance seems even more unjust considering the spoils coming to investors and top executives if Wall Street continues rewarding Southern Company.

We understand that to meet America's energy needs, especially in sweltering southern states like Mississippi that use a disproportionate share of the nation's electricity, everyone is going to have to pay more for power.

But it is wrong for investors and executives to reap large dividends while forcing customers to bear the full brunt of that responsibility.