PSC votes unanimously to deny Mississippi Power’s proposed rate hike
by Clay Chandler
Published: June 22,2012
Public Service Commissioners voted 3-0 Friday morning to deny a rate increase proposed by Mississippi Power Co. for the Kemper County coal plant.
The company had asked for a 13 percent rate increase that would have lasted until the end of 2012. In their denial, commissioners said they would not consider rate increases associated with the plant until litigation surrounding it is resolved by the Mississippi Supreme Court.
The Sierra Club, which has long fought the plant, currently has the issue before a chancellor in Harrison County.
The vote came after about an hour of testimony from MPC officials and public comment from ratepayers, business organizations, and senior citizens advocates and groups who advocate for the disabled.
Those who opposed the plant all touched on variations of the same theme: The plant was an expensive risk for ratepayers. Of the 16 people who addressed the PSC, 12 voiced opposition to the plant.
“You don’t want to pay to build my home. I don’t want to pay to build your plant,” said Coast resident John Gooding, who spent most of his three minutes (the allotted time for people to comment) looking at attorneys representing Mississippi Power.
Blake Wilson, president of the Mississippi Economic Council, spoke in support of the plant, telling commissioners his organization commended their willingness to “look to the horizon” and make difficult decisions that would ensure dependable power generation that would aid economic development.
Tom Anderson, MPC’s vice president of generation development, became a target during his testimony for Northern District Commissioner Brandon Presley. Presley asked Anderson if he was confident the company’s latest cost projection of $2.76 billion, which is $112 million shy of the outer cap the PSC has imposed on the project, would hold up through the end of construction in May 2014.
Anderson made no guarantees that it would. “I’m confident we can build it under the ($2.88 billion) cap,” he said.
After the vote, MPC’s CFO Moses Feagin said he was a “little surprised” at the PSC’s vote. “We just have to go back and re-evaluate it,” he said. Feagin would not say what effect Friday’s vote would have on the plant’s future.
The Sierra Club’s Louie Miller said that the inability of the company to pass on construction costs to ratepayers while the plant is being built “puts this thing in jeopardy. They destroyed their credibility with the Commission when they revealed the $366 million cost overrun right after it had been reapproved.”
The Sierra Club has contended that the plant was dirty, expensive and unnecessary.
“I think this was the right vote,” said Presley, who has voted against the plant.
MPC can appeal Friday’s vote directly to the Mississippi Supreme Court. It was unclear Friday afternoon if officials planned to do that.
“It is imperative to understand that I believe that the IGCC Plant is the best option for the customers of Mississippi Power,” Southern District Commissioner Leonard Bentz said in a statement Friday. “The most important factor in generating electricity is the fuel source it takes to generate the power. We don’t know what the cost of natural gas will be tomorrow, next year or in 40 years. Likewise, we do not know what coal will cost in forty years. The crucial thing is that we do know what Mississippi lignite will cost for the next forty years. Another way to look at this is that if you could buy gas for your car or truck for $1 per gallon for the next forty years, you would do it.”
MPC said in a statement late Friday afternoon that it was “extremely disappointed” in the vote, but that construction would continue on the plant while the company weighs its appeal options. “The actions (Friday) do not negate the need for the Kemper facility,” the statement said.
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