Baaaaaaa: Mississippi Power Downgraded

Rating Action: Moody’s Downgrades Mississippi Power to Baa2, negative; affirms Southern, stable

Global Credit Research – 14 Aug 2015

Approximately $2.2 billion of debt securities downgraded

New York, August 14, 2015 — Moody’s Investors Service, (“Moody’s”) downgraded Mississippi Power Company’s senior unsecured rating to Baa2 from Baa1 and its preferred stock rating to Ba1 from Baa3. The rating outlook is negative. This rating action concludes the review of Mississippi Power’s rating initiated on 27 May 2015. Moody’s affirmed the ratings of The Southern Company (Southern, Baa1 senior unsecured) with a stable outlook.

Ratings Rationale

“The downgrade of Mississippi Power’s ratings reflects the lack of permanent cost recovery provisions in place for the Kemper IGCC plant since the Mississippi Supreme Court invalidated the utility’s 2013 rate plan earlier this year,” said Michael G. Haggarty, Associate Managing Director. “The downgrade also considers the increased concentration risk, financial exposure and liquidity pressure on the utility following the exit of its electric cooperative utility partner from a planned 15% ownership in the Kemper plant,” added Haggarty.

Although the Mississippi Public Service Commission (MPSC) approved interim rates by a two to one margin yesterday, providing the utility with some limited, potentially refundable rate relief on the plant’s in-service assets and averting a potentially more negative rating action, there is still no permanent cost recovery plan in place for the Kemper plant. The lack of a unanimous decision on a utility’s appeal for emergency financial relief is a particular credit concern. In addition, some interveners may challenge the approval of these interim rates.

The negative outlook reflects the financial uncertainty still facing Mississippi Power as it strives to obtain permanent rate relief on the Kemper plant with only two of the three commissioners supportive. Under a scheduling order issued by the MPSC earlier this week, hearings on designating these interim rates as permanent, including determining the prudency of the costs incurred for the in-service assets, are scheduled for November with a final order to be issued by 8 December 2015.

Near-term approval of some permanent rate relief on the Kemper plant has become all the more important because of the upcoming change in the composition of the MPSC on 1 January 2016 following elections this November. Several of the candidates running for the MPSC have voiced their opposition to the Kemper plant, as well as for the rate increases necessary for the utility recover the costs incurred under the MPSC’s previously established construction cost cap. A less credit supportive regulatory commission in place without some permanent rates in effect will likely lead to a further rating downgrade.

The negative outlook also reflects Mississippi Power’s constrained liquidity position and high reliance on parent company Southern for liquidity support.

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12 thoughts on “Baaaaaaa: Mississippi Power Downgraded”

  1. Thanks for the link. First time I had a chance to look at the downgrade. Something caught my attention, down at the bottom:

    Downgrades: ..Issuer: Harrison (County of) MS – (Supported by Mississippi Power Company)

    ….Senior Unsecured Revenue Bonds, Downgraded to Baa2 from Baa1

    Will stop by EMMA later this evening if I have time and report back.

  2. MS Power owes their thanks for their downgrade to former governor Haley Barbour, former Southern Public Service Commissioner Leonard Bentz, Governor Bryant and all the legislators in our corrupt state who fell for their unnecessary, unproven, over-priced, no way environmental friendly, boondoggle named Kemper, and are putting the bill on the backs of southern Mississippi counties since they voted for this monstrosity.

  3. https://www.youtube.com/watch?v=GQa657vtDoo#action=share This is our next challenge. Watch the attached Tom Blanton interview and go to the 30 minute mark where they talk about the bills and laws that were passed that allowed for all of this to take place.You will be shocked to know that every rate payer’s home or business structure is being used for collateral for the Kemper project. Please watch the video.

    1. I haven’t watched the video yet and I am just commenting on the words you present BB. How can a private citizen’s property be put up as collateral from a utility investment or lean. This seems highly illegal even if the RRRSM passed a law or not.

  4. I agree with you Eye-Spy. Go to the 30 minute mark.They actually read the language from the bill which is not vague or grey. I would like your thoughts once you do.

      1. Sorry for the late response.I have been on a short road trip but finally got back to my computer. I agree with everything you are saying about the legalities of what they are reading in the video. I went online to Ms.House Bill 1134 and could not find a section 9 or that language. He also mentioned the bond bill. Maybe there is another document somewhere. Going to research further. Thanks

        1. No need for apologies. I have a thick layer of skin and understand your busy. 😉

          Another thing that I found interesting about the video is the comment about corporate socialism. How true it is. For those who have not observed. Take a look at the second half of the video.

          The RRRSM is the true socialist regime.

  5. Biloxi Blues,

    I examined the video earlier today and this makes absolutely no sense. I am certainly not a lawyer by any means but the content that was delivered in the video clearly appears to violate the Constitution of the United States whereby the government enacted a law that places debt among it’s citizens from the result of a public/private entity or investment.

    As History depicted, the good ol’ boys of the south were “Pro-England” and it looks like this a major step back to the society Americans fought against.

    The radical Regime of Mississippi likes to claim “less government” when in fact, they are driving us towards total government control.

    A law that places public burdens and private corporate investments against it’s citizens may hold up in Mississippi Supreme Court but would never hold a candlestick in the rest of modern society.

  6. Last night I read some information about a new product that may help ease some of the frustration or angst that the JC Supervisors, SR Hospital Higher Ups and their Attorneys are experiencing because of the pension crisis they are all involved in. Pay attention all of you people in positions of power and authority in Jackson County. This is important. You are probably all suffering from ED(Excessive or Election Dishonesty)Just ask youself the following…. Are you having trouble speaking or remembering the truth these days? Are you worn down because you are getting caught in lie after lie in public? Do you find yourself spending way too much time dreaming up new things to tell people just to get Their vote? Are you having nightmares about 70+ year old people picketing in the 95 degree heat outside of your air conditioned building demanding the truth? Have you ran out of answers about the many conflicts you are involved in? Are you an attorney at Dogan and Wilkinson? Do you feel downright dishonest and think you just can’t go on anymore? If so, you are in luck!!! NOW AVAILABLE TO ALL OF THE WORN OUT AND FRUSTATED LIARS IN JACKSON COUNTY. YOU KNOW WHO YOU ARE. FINALLY, SOMETHING THAT WILL MAKE YOU FEEL LIKE A MORE RESPECTED LIAR IN YOUR OWN MIND. -LIAGRA!!!!!! Just 100 mg. per day will give you stronger and longer lasting fabrications….you will be able to tell lies faster and with more energy….you will have no sense of remorse…you will even believe your own stories!!!! VIVA LIAGRA!!!! Warnings…Do not use this product if you have a conscience…Loss of long range vision may occur…Expect some hearing loss due to criticism…The speed of lies coming from your mouth may exceed your ability to think… If you feel short of breath when being chased by nonbelievers please consult a track coach. Get your 100mg LIAGRA (sildenaflimflam litrate) today. No prescription required but a lie deflector test recommended. GET YOURS TODAY.

  7. If any of you are interested in reading about how you are being screwed by MS Power and the Kemper deal, read 2 letters to the editor in today’s Sun Herald. One is written by a former state representative from Harrison County and the other by the Sierra Club President of the Gulf Coast Chapter.

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