Bentz: The whole Kemper story is not getting told
Published: May 14,2010
Tags: Anthony Topazi, Barbour, BGR Group, Bloomberg News, Brandon Presley, Clean Coal Power Initiative, Construction Work in Progress, CWIP, Florida, Gov. Haley Barbour, Griffith & Rogers Inc., Interpublic Group of Companies Inc., Kemper County clean coal plant, Kemper County clean coal project, Kemper County Coal plant, Leonard Bentz, Lynn Posey, Mississippi Business Journal, Mississippi Power Company, Mississippi State Ethics Commission, Orlando Gasification Project, Public Service Commission, Southern Company, The New Republic, Todd Terrell, U.S. Department of Energy
For better or worse, the economic future for the next 40 years in southeastern Mississippi will be greatly impacted by the decision of Public Service Commissioner Leonard Bentz.
Bentz is one of three members of the state Public Service Commission, which voted April 29 to conditionally approve Mississippi Power Company’s (MPC’s) $2.4-billion Kemper County clean coal plant. The company (then) said restrictions imposed by the Commission’s order would make it impossible to build the plant. MPC has since filed for a rehearing.
While Northern District Commissioner Brandon Presley opposes the plant and voted no to the order, Central District Commissioner Lynn Posey joined Bentz in approving it in a 2-to-1 vote.
Bentz disagrees with the notion that he is the one Mississippi Power needs to convince to get a different ruling on the plant. Bentz said he and Posey both favor the plant but are also looking out for ratepayers’ interests.
The commissioners’ views do differ, however.
Posey said in an April 29 Mississippi Business Journal interview that he wished the Commission “could have had an order that wouldn’t have been quite so tight on Mississippi Power.” Posey said he was specifically referring to the order’s stipulation of a $2.4-billion cost cap as well as the denial of Construction Work in Progress (CWIP) in rate base.
CWIP permission would allow the company to charge ratepayers for financing costs before the plant becomes operational. Mississippi Power is adamant that CWIP is necessary in order for the company to be fiscally responsible. The allowance would keep up the company’s credit rating, which would allow it to have access to capital and keep interest rates low, saving customers approximately $500 million over the plant’s life.
Posey said: “I think at some point in time … we’re going to have to come back and visit the CWIP provision … I think that’s the way the majority of plants are being built these days. In the long run — it does have some up-front costs — but in the long run, there’s a tremendous amount of savings that can be there. I’m very much for the plant, and hopefully we can get that done.”
Bentz, on the other hand, stands by the $2.4-billion cap and is skeptical of whether CWIP is in the best interest of ratepayers.
“I am 150 percent for this plant. What I am not for is strapping the ratepayer when they are not able not to afford this plant. If they can’t pay their bills, it does them no good … I am struggling with the economics of the plant,” Bentz said.
“I am 100 percent for allowing this plant to be built, but in order to do that you have got to put some type of stipulations on the company. We live in a totally different day and age than 40 years ago when they built plants (in Mississippi) … As a regulator you have got to make sure that you’re not going to end up with some type of prices at the end of the day where the ratepayers are not protected.”
Regarding MPC’s assertion that restrictions in the order would make building the plant too risky for stockholders, Bentz said, “Didn’t anyone ever think about what might be too risky for the ratepayers?”
Bentz said he fully understands Mississippi Power’s argument that it needs CWIP authority in order to have capital to build the plant, but his job as a regulator is to find the balance between the ratepayer and the utility. “We want the power company to prosper, but at the same time, ratepayers’ interests must be taken into account … Everybody and their grandma knows that we are in tough economic times. I’m having trouble getting the power company to understand that.”
Bentz: Rate impacts shouldn’t be confidential
MPC has filed rate impact information confidentially with the Commission. By law, a utility is allowed to designate what information is considered proprietary.
Bentz said, “Those numbers should be made available to the public … The ratepayers need to know the impacts. When the bills go up, they’re not going to call (company CEO) Anthony Topazi. They’re going to call me … The whole story is not getting told.”
“It is frustrating. I want to build this plant, but I want everybody to know exactly what is going to happen when we build this plant. I have to look Gulf Coast residents in the eye and tell them I did everything I could to get the information on the table.”
Politics and economic development
Bentz is the lone Republican on the Commission. A Gulfport native, Bentz was the Harrison County deputy sheriff before leaving in 1999 to work for the Commission as a utility investigator. In 2003, Bentz was elected as a state representative for District 116 and served in that position until April 2006, when he was appointed as Southern District public service commissioner by Gov. Haley Barbour, one of the Kemper plant’s biggest advocates.
Bentz, who plans to run for his office in the next election, said, “I can’t understand why I would get any political pressure from the Republican party. I’m doing just what they’re asking their legislators to do in Washington and what they’re asking their legislators to do in Jackson — making sure they don’t spend money they don’t need to spend.”
Bentz said he has conservative fiscal values.
Numerous economic development groups and virtually every Republican politician in Mississippi has spoken in favor of Kemper as an economic development project.
Bentz’ said Kemper “will be economic development in the construction period. It’s not a very good long-term job creation economic development project. Spending $2.4 billion employing 200 people — the numbers don’t add up.
“All these economic development people are my friends, but I’m asking the questions they wish (U.S. Rep.) Barney Frank (D-Mass.) had asked when he gave all those financial institutions leeway.
“That is my job — to ask those tough questions.”
To sign up for Mississippi Business Daily Updates, click here.
2 Responses to “Bentz: The whole Kemper story is not getting told”
Top Posts & Pages
- DAVID DALLAS — Cannabis for the rest of us
- MARTY WISEMAN: The current racial strife and the failure to educate
- Source: Bryant has offered Glenn McCullough MDA job
- BILL CRAWFORD: Boyce takes hot spot as IHL commissioner
- Planters Bank promotes at 3 locations
- COMMERCIAL FINANCE 701: Loans disguised as government bonds (BOANs)
- (WITH VIDEO) Funding secured for Capitol Art Lofts in downtown Jackson
- Real Estate Forum panelists: Lenders, investors hungry for deals on residential rentals in Miss., elsewhere
- Two new casinos like the odds on Mississippi Gulf Coast