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Haley Barbour: Kemper plant will rival Grand Gulf’s performance

Mississippi BudgetBy JACK WEATHERLY 

Former Gov. Haley Barbour predicts that Mississippi Power Co.’s Kemper County coal-powered plant will in the long run rival the performance of Entergy’s Grand Gulf nuclear plant in Port Gibson.

“Grand Gulf took more than twice as long to build and cost more than twice as much [as originally planned].  And after it went online it initially caused a spike in rates, Barbour said.

“Today, Grand Gulf is the cheapest baseload power generated in Mississippi,” Barbour said in an interview.

Rates went up 17 percent in 1985 when the nuclear plant started producing power, rising to 49 percent in 1993 before starting a slow decline since, according to Mara Hartmann, Entergy Mississippi spokeswoman.

» READ MORE: Gag order on Kemper employee extended. 

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Barbour and Gray Swoope, who was executive director of the Mississippi Development Authority during Barbour’s tenure, announced in a news release on Monday the formation of VisionFirst Advisors, an economic development subsidiary of the Butler Snow law firm.

They were asked about their economic development efforts in Mississippi.

Cost of building the Kemper plant has risen to nearly $6.2 billion from the original projection of about $2.8 billion. The oft-delayed project will turn lignite, a low-energy coal mined in a near-the-surface formation in east-central Mississippi, into gas to fuel the power plant. Its carbon-capture and gasification technology qualifies it as a “clean-coal” plant.

The Mississippi Supreme Court last month ordered Mississippi Power to refund more than $200 million of a rate increase granted by the state Public Service Commission to pay for the facility.

The court found the commission at fault for not conducting its due diligence properly and transparently.

Entergy Mississippi spokeswoman Hartmann said Tuesday that Grand Gulf’s delay and cost overrun were caused by a shutdown and reexamination of all nuclear construction projects after the Three-Mile Island partial meltdown in Pennsylvania in 1979.

One effect of the Grand Gulf cost overrun was the passage of the Baseload Act in 2008, which allows Mississippi utilities to collect increased rates while a facility is still under construction. As governor, Barbour promoted the act. The Supreme Court did not address that law in its ruling on the commission’s handling of the case.

The Washington, D.C.-based BGR Group, which he founded in 1987, claimed credit for persuading the U.S. Department of Energy to shift $270 million to Mississippi from a proposed Southern Co. project in Florida.

Barbour is listed on the BGR website as founding partner. He said that he is “nonexecutive chairman” of the board for VisionFirst and that Swoope, as president and chief executive, is the “head honcho.”

Swoope said that the fact that Butler Snow has offices in 18 cities provides a “large footprint’ for the startup company, which will be based in Tallahassee, Fla.. Barbour has been associated with Butler Snow since he left office three years ago.

Swoope said that during his four-year tenure as Florida secretary of commerce, the goal of a net gain of 700,000 jobs was surpassed by 28,000, and in less time than had been projected.

Donald Clark Jr., chairman of Butler Snow, said in the news release that “this is an exciting opportunity for our firm and our clients with economic development needs both here and abroad.”

During Barbour’s tenure as governor, a Toyota assembly plant built at Blue Springs and a steel plant at Columbus were signal achievements.

The Toyota plant employed 2,000 and accounted for 2,699 indirect jobs as of 2013, the automaker states.

The Steel Dynamics plant, formerly Severstal, has about 640 workers, according to the Mississippi Development Authority.

But two others — Twin Creeks Technologies and KiOR Mississippi — are shuttered. Twin Creeks was to create 1,500 jobs, directly and indirectly, but it was closed in late 2012 before producing and selling solar panels. The Mississippi Development Authority provided $27.7 million to Twin Creeks, and is now trying to find a buyer for the 80,000-square-foot building in Senatobia.

The MDA made a $75 million loan to KiOR, but it never  produced the quality or quantity of  motor fuel from wood chips it had expected. And it laid off its workforce of about 100 in January 2014, falling far short of the projected 1,000 direct and indirect jobs.

KiOR owes Mississippi about $79 million, but the state has first lien on the $230 million KiOR plant. The Pasadena, Texas-based parent of the Mississippi plant has filed for Chapter 11 bankruptcy protection, though the state is seeking to force it into Chapter 7 liquidation.The filing by the company excluded the Columbus plant.

Barbour said that “the likelihood is that the state is going to come out fine on those, though it is  disappointing that those potentialities didn’t come into full fruition.”

“But I think that, because the state did its due diligence, the taxpayers of Mississippi should be made whole.”

As for the Kemper County plant, Barbour said he foresees “the same thing with Kemper. There has been a couple of billion dollars in cost overruns, but the stockholders of the Southern Co. paid every dime of that.”

The project is not without its critics.

Louie Miller, state director of the Sierra Club, said that “bottom line . . . Haley Barbour  continues to be the chief lobbyist for the Southern Co.,” parent of Mississippi Power.

BGR had listed Southern Co. on its website as a client until 2010. However, Southern paid BGR $200,000 as a lobbyist in 2014, according to the Center for Responsive Politics website.

 

About Jack Weatherly

5 comments

  1. So sayeth the man that is paid to say it!

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