If MPC wants to build coal plant, it should do so with private financing
In the grand scheme of things, it’s hard to be critical of a company that is trying to grow, create more jobs and make America more energy independent.
Unfortunately, Mississippi Power Company (MPC) doesn’t have all of its ducks in a row in regard to building a $2.4-billion lignite coal plant in Kemper County at the ratepayers expense.
Mississippi Power would like for its ratepayers to trust them when it says there is a need for a new plant, and that the reason it is needed is because natural gas is too volatile of a commodity to be trusted as a primary source of energy spanning the next 25 years.
A couple of weeks ago, Mississippi Power was given the opportunity to respond to comments from experts saying that because of recent discoveries of natural gas, an increase in production has lowered the commodity’s price, therefore contradicting MPC’s “need” to build a new lignite coal power plant.
MPC’s CEO Anthony Topazi did not respond to interview requests at the time.
However, we did provide testimony Topazi made before the Mississippi Public Service Commission, where he said “gas is simply unpredictable.”
“Any long-term energy strategy,” he said, “that is relying on some optimistic forecast for natural gas is dangerous and exposes our customers to enormous cost risks going forward.”
After the story ran, MPC asked for an editorial board meeting with us to explain in detail the issues it has with natural gas pricing.
In that meeting, Mississippi Power reiterated its position it had made to the Public Service Commission that natural gas is too volatile. Using their experts’ range of natural gas forecasts, they had determined that energy from lignite coal would be cheaper for customers than energy from natural gas over the life of the plant.
“Great,” we said. “Put us in touch with those experts, so we can put their comments on the record.”
They wouldn’t do that, citing competitive reasons.
They told us to contact an expert twho had testified before the Public Service Commission. We did.
He declined to be interviewed.
So, we asked to see the MPC forecasts it was providing to the Public Service Commission.
They wouldn’t do that.
What we were left with for another story is a lot of experts who have continually said that while natural gas has been volatile in the past, it will not be in the foreseeable future.
In fact, just a week after Mississippi Power submitted its findings to the PSC, but made them unavailable to the public, the federal Energy Information Agency released its latest findings.
The results from the EIA shows gas prices rising at a consistent rate over the next 25 years. However, at the end of 2035, prices will only be two cents more than they were two years ago.
That is hardly volatile.
Mississippi sits on a gigantic pile of lignite coal.
Mississippi Power believes it has new cutting-edge “clean coal” technology that can put Mississippi on the map. MPC believes it can make money doing that.
But don’t make the case for the plant with claims that cannot be backed up in a public forum, particularly when the public is going to be on the hook for billions of dollars.
As stated before, we would love to see Mississippi Power Company grow, create more jobs and make America more energy independent.
It just seems that the ratepayers of Southeast Mississippi ought not be on the hook for the bill, if it doesn’t work out.
Mississippi Power Company should get private financing for its project. The model of putting everyday Mississippians on the hook for the financing this project is not a good one, particularly since the plant is not expected to provide savings for customers until 2024.
Contact Mississippi Business Journal editor Ross Reily at firstname.lastname@example.org or (601) 364-1018.
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