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Completion of the power plant in Kemper County is more than three years behind schedule.

PSC starts clock ticking on resolution of Mississippi Power case

 

By JACK WEATHERLY

The latest chapter in the saga of Mississippi Power Co.’s troubled 582-megawatt “clean coal” power plant in Kemper County started Thursday.

“The clock starts ticking today,” Public Service Commission Chairman Brandon Presley said of the order laying out what the PSC says are Mississippi Power’s options.

The plant, construction of which began in 2010, was initially expected to cost $2.4 billion but has ballooned to $7.5 billion. Its completion is more than three years behind schedule because of failure after failure in efforts to make the first-of-its kind technology work consistently.

Even the original projected cost of building the facility would have been several times the cost of constructing a natural-gas-fired plant from the start, according to data from the U.S. Energy Information Administration.

The 45-day “clock” is the timepiece set up for the utility to comply with the commission’s three-point proposed settlement, which was announced June 21 but made formal Thursday:

  • No further rate increases for customers, and perhaps even a rate reduction.
  • No costs associated the project’s gasifier and related assets.
  • Relicense the plant as a natural-gas-only facility.

The company announced June 28 that it was suspending operation of the coal-gas aspect of the facility and continuing to produce electricity with natural gas, which it has been doing since August 2014.

» CLICK HERE to read how the MBJ has documented this story during the last 8 years

The introduction to the order laying out the framework notes that the commission’s “focus has been squarely on customer value” for more than eight years, and “the obligation of [Mississippi Power] to bring the Kemper Project into commercial operation in a manner that provides and maintains that customer value.”

“If an appropriate settlement is not reached [within the 45-day period] the commission reserves its right to exercise its full authority . . . which could potentially result in revocation of the Kemper Project certificate.”

Presley said that at the end of the period, public comments would be taken in another 45-day period.

He said after the meeting that what the PSC terms a “settlement” does not suggest the willingness on the commission’s part to compromise.

He said in response a question as to whether Mississippi Power could take the matter to court, “They have every right afforded to them by law.”

The case has already been in court.

The state Supreme Court ruled in 2015 that Mississippi Power had to repay rate increases of 15 percent in 2013 and 3 percent in 2014 because the PSC improperly approved them.

The utility said that the rescinding of the increases would bankrupt it, and persuaded the commission to approve a new increase, 15 percent.

Currently at stake is $3.4 billion that the company says is costs from coal-gasification facilities, as well as a lignite-coal mine and carbon dioxide pipeline and other items not currently in rates paid by customers, according to a Securities and Exchange Commission filing on June 28 by Mississippi Power, for which the company said it “would be required to [take] as a charge to income in the second quarter of 2017.”

Mississippi Power’s continuing vulnerability was underscored last week when it received an injection of $1 billion from Southern Co. after the Mississippi utility decided to halt operations relying on coal from which two-thirds of carbon dioxide is removed and used in oil exploration to drive crude to the surface.

Mississippi Power, which serves 23 counties, is the state’s second-largest regulated utility, with nearly 190,000 customers, far behind Energy’s 445,000.

Mississippi Power spokeswoman Cindy Duvall said in an email: “Today’s proceeding is in line with the framework the Commission laid out two weeks ago. We look forward to reviewing the order.”

Southern Co. has already made proposals toward the settlement, the Associated Press quoted on Thursday the man in charge of negotiations as saying.

“They want a settlement in this and I think that now that the gasifier is off the table, there’s a lot better prospect that will happen,” said Virden Jones, executive director of the Public Utilities Staff, which is separate from the commission.

About Jack Weatherly

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