Gulfport, Miss. – Following Hurricane Katrina’s landfall on Aug. 29, 2005, and the devastating impact on the region, every one of Mississippi Power’s 195,000 customers lost electric service. Over the next 12 days, 1,200 Mississippi Power employees, with assistance from electric utilities across North America, turned into a restoration team of more than 12,000 with one goal in mind – getting the lights back on in south Mississippi.
Mississippi Power’s uninsured losses following the storm were more than $300 million and today, the company is announcing that the bonds used to finance the recovery effort have been retired. At a work session in Jackson, the Mississippi Public Service Commission unanimously approved Mississippi Power’s request to adjust customer bills to remove the $3.45 monthly System Restoration Charge.
“The destruction caused by Hurricane Katrina surpassed anything we could’ve imagined, but the efforts of the 12,000 people who helped us get service back to our customers will never be forgotten,” Mississippi Power President and CEO Anthony Wilson said. “Following the storm, Mississippi Power had the privilege of working with state and federal leaders, the Mississippi Bond Commission, the Mississippi Public Service Commission and our legislature to come up with a reasonable plan to avoid an extreme rate increase that would have otherwise impacted our customers.”
Federal Community Development Block Grants, allocated for customer rate mitigation, handled a large portion of the company’s costs. The remaining $121 million was addressed by the Mississippi Legislature in 2006. The “Hurricane Katrina Electric Utility Customer Relief and Electric Utility Restoration Act” called for the issuance of low-interest bonds for utilities to recover restoration costs.
The original length of the payback period was 12 years, but Mississippi Power asked the Public Service Commission to remove the monthly charge nearly two years early.
“These bonds provided Mississippi Power with access to lower-cost capital to rebuild our power delivery system and replenish our storm damage fund, so we could be prepared for future storms,” Wilson said. “And they helped protect our customers from excessive increases in their electric bills. It was a true win-win agreement.”
After Hurricane Katrina passed through the company’s service territory, every Mississippi Power customer was without electric service for the first time in the company’s history. All but three of the company’s 122 transmission lines were out of service, while 65 percent of the distribution facilities were damaged.
More than 9,000 utility poles, 2,300 transformers and 1,100 miles of power lines were replaced. In addition, Plant Watson in Gulfport suffered extensive damage and was knocked out of service for several months.
“The storm had a tremendous impact on Mississippi and our region,” Wilson said. “I am proud of the performance of every Mississippi Power employee for making a difference in restoring normalcy to our customers during this critical time.”
Mississippi Power, a subsidiary of Southern Company (NYSE: SO), produces safe, reliable and environmentally responsible energy for more than 186,000 customers in 23 southeast Mississippi counties. Mississippi Power earned the 2015 ReliabilityOneTM Award for outstanding midsize utility for excellence in storm restoration and recovery efforts as well as being a leader in reliability, customer service and safety. Visit our websites at mississippipower.com and mississippipowernews.com, like us on Facebook, and follow us on Twitter, LinkedIn, Google+ and YouTube.