Mississippi distributes $360 mil to utilities damaged by Katrina

Birmingham, Alabama (Platts)--31Oct2006

Mississippi Governor Haley Barbour late Monday said the state has awarded
$376 million to Mississippi Power and $81.4 million to Entergy Mississippi to
help the two investor-owned utilities pay for damage Hurricane Katrina caused
last year to their transmission and distribution systems.

Barbour reserved some $360 million in federal assistance block grants for
the two utilities. Two natural gas utilities -- CenterPoint Energy and Willmut
Gas -- received the remaining $2.6 million, the governor's office said.
Among the state's utilities, Mississippi Power was hit hardest by Katrina and
estimated the total damage costs at $302 million. All 195,000 of the utility's
customers lost power immediately after the storm and about 15,000 customers
still are not taking power, the utility said.

Entergy Mississippi had storm costs totaling $89.1 million, a spokesman
said. About 75% of its customers lost power.

The block grants from the US Department of Housing and Urban Development
can be used by the utilities to acquire, construct, reconstruct, rehabilitate
or install distribution lines facilities, Entergy Mississippi said.

The grants are designed to relieve customers of the responsibility of
paying the majority of the storm costs. They will pay the remainder, but at a
much lower rate through securitized bonds. The state has agreed to sell bonds
secured by a storm recovery rider to pay the utilities remaining of the storm
costs. The method will lower interest rates and stretch out the customer
repayment to 15 years.

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