LETTER TO THE EDITOR: Barbour sets record straight on Kemper County Coal Plant

Gov. Haley Barbour

Recently Louie Miller, spokesman for the Sierra Club, criticized the Legislature and me for “costing Kemper County residents millions.” Let me set the record straight.

The Sierra Club is fighting the construction of a cutting edge, clean coal electric power generation facility by Mississippi Power in Kemper County. It will be the first commercial scale carbon capture and sequestration system on an electric generation plant in the United States and will reduce CO2 emissions to that of a natural gas-fired power station.

The Mississippi Public Service Commission (PSC) has found Mississippi Power needs more baseload electric generation capacity (baseload means a plant that runs 24 hours a day, seven days a week).

The PSC has also determined the plant being built in Kemper County will be the safest, most reliable, cleanest and most affordable source for that baseload electricity for the forty to sixty year life expectancy of the plant.

The plant will use lignite coal, mined in Mississippi, and convert it to gas to generate the electricity. Mississippi landowners will sell the plant some $300-400 million of lignite over forty years of operation. Before this facility, that lignite had essentially no value.

During construction the Kemper County project is creating some 12,000 direct and indirect jobs. After completion the plant will have created more than 1,000 permanent direct and indirect jobs.

The Sierra Club, a liberal environmental group, nationally opposes any new coal-fired power plants. For years their “Beyond Coal” campaign said new power plants should be fueled by natural gas, not coal. But now, the Sierra Club nationally opposes natural gas-fired electric utility plants, too.

So the Sierra Club’s position of no coal and no natural gas plants must mean they oppose new baseload plants in Mississippi. Reliability in providing electricity is essential to economic prosperity and job creation, not to mention the basic quality of life Americans demand and deserve.

Look at the poor people in the Northeast with no electricity because of Sandy. Or remember the days after Katrina before our electricity was restored in a heroic performance by Mississippi Power and our co-ops.

Some advocated to the PSC that the plant should run on natural gas, but the PSC studied this issue and made the right decision: Lignite is likely to be far cheaper in the long-term.

While today’s cost of natural gas is $3.60 per thousand cubic feet, after falling below $1.80 less than a year ago; twice in the last decade it went above $10 and on a third occasion to $8. Some analysts are already predicting natural gas above $5 next year.

The best measure of the volatility of natural gas prices came when the PSC required Mississippi Power to seek binding contracts from suppliers to buy natural gas at a fixed price for ten years. Through this certification process, it was revealed that no one would even make an offer to supply the gas for ten years, at any price.

Further, the company has contracts to sell byproducts of the plant, including captured CO2, for approximately $2 billion over forty years – all of which will be used to reduce ratepayer bills.

As with every new electric generating plant, rates will increase when Kemper first goes online, just as they did when Mississippi Power’s other generating plants, Watson and Daniel, went online. Today these plants continue to provide stable rates and reliable low cost electricity, as they have for decades.

The Sierra Club’s claim that Kemper County residents will lose millions because of legislation related to this project is not true. The Kemper plant and its affiliated lignite mining operations will pay the county more than $7 million annually. That doubles the local tax base and is a huge tax windfall for the county.

Kemper County officials supported 2009 legislation co-authored by some of the county’s legislative delegation to reduce taxes on the power plant because it was a win-win situation. Kemper County will see its tax base double while Mississippi Power customers will, as a result of lower taxes, save millions of dollars on their power bills over the life of the plant.

Because of a lawsuit filed by the Sierra Club to stop the Kemper County plant, the PSC did not allow an 8% “construction work in progress” rate increase to go into effect. This rate increase, according to the court testimony, would have saved Mississippi Power customers $500 million through lower rates during the first forty years of the plant’s being in service.

Mississippi Power’s two biggest customers, South Mississippi Electric Power Association (SMEPA) and East Mississippi Rural Electric Power, both voluntarily put the pre-construction rate increase into effect to save themselves and their ratepayers hundreds of millions on light bills for the next forty years. Thanks to the Sierra Club, regular customers didn’t get that relief.

— Gov. Haley Barbour, Yazoo City

Public land in Delta impacted by river flood

Every year, hunters flock to the Delta to take advantage of some of the best public hunting land in the state offered by the Mississippi Department of Wildlife, Fisheries & Parks’ wildlife management areas (WMAs) and the U.S. Fish & Wildlife Service’s Theodore Roosevelt National Wildlife Refuge Complex.

This year, however, hunters are wondering if they should find somewhere else to hunt.

As the deer and turkey hunting seasons approach, many hunters worry that they will not have access to these public lands, will not be able to navigate them and/or will find nothing to shoot once they get there due to this year’s massive Mississippi River flood.

The historic flood has, indeed, impacted public hunting land in the Delta, destroying infrastructure and habitat and taking a yet-to-be-determined toll on the region’s turkey population.

However, considering the magnitude and duration of the flood, the state’s WMAs as well as the federal Theodore Roosevelt National Wildlife Refuge Complex in the Delta suffered relatively little damage, and most all of the damage is expected be repaired by the opening of the deer and turkey seasons.

While there are questions about the impact on the turkey population, some researchers believe the flood actually boosted the area’s deer herds.

“Hunters should not have any access problems,” said Sabrina Chandler, deputy project leader at the Theodore Roosevelt National Wildlife Refuge Complex. “Visitors to the Complex shouldn’t notice much difference at all.”

Chad Dacus, assistant director of the Wildlife Bureau at the Mississippi Department of Wildlife, Fisheries and Parks, said all the WMAs in the Department’s Delta region “should be wide open” Oct. 1.

Wildlife management areas

Of the Mississippi Department of Wildlife, Fisheries & Parks’ 12 WMAs in the Delta, only one suffered significant damage.

The only WMA located between the Mississippi River and the mainline levee system, the damage at the 3,500-acre Shipland WMA near Mayersville reflects the magnitude of the 2011 flood. The Department is still tallying the losses.

Shipland’s facility took six to eight feet of water, and is a total loss. The road system was heavily impacted after being underwater for more than a month.

The flood deposited six-foot sand dunes in the middle of the woods, and Dacus estimated Shipland lost perhaps as much as 30 acres of land.

“It washed away — it’s somewhere south of Vicksburg now,” Dacus said.

Other Delta WMAs that were impacted are Twin Oaks near Rolling Fork and Mahannah near Redwood. Floodwaters at these locations were comparable to the last significant flood in 2008.

But Dacus added, “While the flood was not abnormal, the length of time the land stayed underwater was significant.”

The flood produced some positives. Dacus said once the floodwaters receded, the re-silted land exploded with spring-like growth.

He said the flood could have benefited the deer population. Since there was no levee breach, floodwaters crept in, giving deer time to move to new land. Often this new land was farmers’ fields, and deer fattened on soybeans and other row crops.

Concerns for turkey are high, however. Ground-nesting birds, the flood hit during the brooding season. Dacus said the Department was currently conducting a brood survey to assess the losses. The findings could be in as early as next month, but it could stretch into November.

Dacus said if the losses are found to be significant, the Department might have to add turkey hunting restrictions, probably reducing the turkey season by a few weeks. He added that there were carry-over birds from last year, meaning that there will be turkey hunting on the WMAs this year.

Theodore Roosevelt

National Wildlife Refuge Complex

The U.S. Fish & Wildlife’s 100,000-plus-acre Theodore Roosevelt National Wildlife Refuge Complex is made up of seven refuges, six of which permit hunting.

The largest of Roosevelt’s refuges is Panther Swamp National Wildlife Refuge encompassing 38,697 acres.

At its deepest, the floodwaters covering Panther Swamp reached 25 feet, and heavily damaged the refuge’s road system. Chandler said when the floodwaters receded, it left wash-outs “large enough to lose a truck in.”

At press time, only one access road was in disrepair. Chandler said the refuge was looking for funding for the repairs, but she said the refuge hopes to have all roads restored by Oct. 1.

Because the flood’s impact was not as great at Panther Swamp, Chandler said there are no plans to alter the hunting season regulations for deer or turkey.

Judge affirms Kemper decision

By Amy McCullough

kemper-decision (Click this link to read full text.)

Harrison County Chancery Judge Jim Persons has affirmed the decision of the Mississippi Public Service Commission to allow the construction of Mississippi Power Company’s $2.4 billion clean coal plant in Kemper County.

The decision states:

“Under the laws of this State, this Court must give great deference to the judgment of the Commission. Its orders are presumptively valid and the party appealing a Commission decision has the burden of proof. This Court does not sit as a fourth Commissioner, but as an appeals court with a limited standard of review. It may not substitute its judgment for that of the Commission. The Court finds that the Commission met the minimum standards required. Therefore, finding no error on the part of the Commission, the order of the Commission granting MS Power a certificate of public convenience and necessity for the Kemper Project is affirmed.”

Environmental group the Sierra Club sued the Mississippi Public Service Commission, calling its May 2010 decision arbitrary and capricious. After a series of hearings, the Commission issued an order in April 2010 containing financial restrictions that Mississippi Power said would make the plant impossible to rebuild. After Mississippi Power filed for a rehearing, the Commission issued its second order which eased restrictions. The power company then announced it would accept the conditions and build the plant.

Sierra argued that there was not sufficient evidence in the record to warrant a new decision.

The Kemper facility, called Plant Ratcliffe, is being built between Mississippi 493 and Mississippi 495 near the Liberty community. It will use a process that converts lignite coal into a synthesis gas that can generate electricity. The plant will produce 582 megawatts of usable generation and will also be the first commercial-scale plant in the nation to capture its carbon dioxide emissions.

Judge Persons’ decision in no way criticize the Commission, unlike his comments from the bench at the Feb. 14 appeal hearing.

“My issues are raised from the orders of the Commission … unprecedented risk, unprecedented cost. … I don’t find where the Commission has addressed the rate impact of Kemper. … The orders we have here – frankly, I don’t think are well done,” Persons said.

Judge Persons also said that in its second decision, the Commission did not address how the new, eased financial restrictions satisfied concerns the Commission had raised in its first decision regarding the public interest.

State Sierra Club director Louie Miller said the group will continue to fight the decision.

“We will appeal this decision at the state Supreme Court. We respectfully disagree with the judge, and we think the flip-flop of the Commissioners was a bad decision and not based on any finding of fact. We will ask for a hearing on an expedited basis,” Miller said.

The Sierra Club originally filed its appeal in Harrison County Chancery Court in June 2010 and also at the Mississippi Supreme Court because the law was unclear regarding jurisdiction. Mississippi Power made a motion to keep the decision at the state Supreme Court. But in October the Court sent the suit back to Harrison County.

Judge: Kemper appeal decision in 2 weeks

By Amy McCullough

GULFPORT – While lawyers prepared for the hearing upstairs, more than 20 Gulf Coast residents rallied in the lobby of the Harrison County Chancery Court on Feb. 14, as Mississippi Sierra Club director Louie Miller explained a lawsuit with a pair of flip flops.

Miller held up a pair of the popular beach sandals with the names “Bentz” and “Posey” written on the bottoms.

Sierra Club says two Mississippi Public Service Commissioners, Leonard Bentz and Lynn Posey, issued a decision essentially denying the construction of the $2.4 billion Kemper County clean coal plant last April, only to “flip flop” and approve the plan in May without sufficient reason. Hence, Sierra’s lawsuit against the Public Service Commission and Mississippi Power Company claiming that the decision was arbitrary and capricious.

After three and a half hours of oral arguments, Judge Jim Persons said he would try to make a ruling within two weeks.

The Kemper facility, recently named Plant Ratcliffe, is being built between Mississippi 493 and Mississippi 495 near the Liberty community. It will use a process that converts lignite coal into a synthesis gas that can generate electricity. The plant will produce 582 megawatts of usable generation and will also be the first commercial-scale plant in the nation to capture its carbon dioxide emissions.

Sierra attorney Robert Wiygul said the Commission’s April 2010 order said Mississippi Power would be held to a $2.4 billion cost cap, instead of granting the company its requested cost overrun allowance that would make the project cost $3.2 billion. Then in May, the Commission said the company would be allowed to request cost overruns up to $2.88 billion. This, along with other changes, allowed Mississippi Power to finance the plant and begin construction.

“The record contains no alternate evidence to accept a higher number,” Wiygul said.

Wiygul also said that according to documents within the record, rate impacts to customers would be around 45 percent.

Mississippi Power Company attorney Ben Stone said that under the Mississippi Public Utility Act, the Commission is charged with determining whether a power plant is needed and approving or disapproving its construction cost estimate. It is not within the Commission’s jurisdiction to direct a utility regarding what type of plant ought to be built.

Stone said Kemper, which will be fueled by lignite coal, was key to Mississippi Power’s generation mix, so that the utility would not be overly dependent on natural gas.

Judge Persons interrupted Stone’s argument and said he had concerns regarding risk and rate impact to customers.

“My issues are raised from the orders of the Commission … unprecedented risk, unprecedented cost,” he said. “I don’t find where the Commission has addressed the rate impact of Kemper. … The orders we have here – frankly, I don’t think are well done.”

The Mississippi Public Utilities Staff allowed Mississippi Power to file rate impacts to customers confidentially in 2009. After a public records request, the Mississippi Business Journal published those rate impacts in the August 22, 2010 story, “‘About a third’ is really closer to about a half.” Mississippi Power said publicly that customer rate increases would be around 30 percent, but the company never submitted that figure in sworn testimony to the Commission.

Judge Persons said the Commission expressed concern over numerous risks to customers in its April order, which would not have allowed plant construction. But in its May order, the Commission eased the financial restrictions on Mississippi Power without addressing how the new conditions protected the public interest.

“Even if a 45 percent increase is reasonable under the (Baseload) Act … what if they can’t afford it? … And if you look at parts of the Commission’s orders, it would scare you to death,” he said.

Stone said “We’re not talking about a rate case here” and stressed that the Commission has the authority to disallow any costs it deems to be imprudent.

Stone did not contest Judge Person’s use of the 45 percent figure.

On behalf of the Attorney General’s office and in defense of the Public Service Commission, Christopher Lomax repeatedly reminded Judge Persons of the separation of powers within government. Lomax said that even if the judge disagreed with the Commission’s policies, the judge did not have constitutional authority to make policy decisions.

The decision could only be overturned if it were arbitrary and capricious, which means done with whimsy, and there were more than 30,000 pages in the record, Lomax said.

“Are you telling me we might as well have not come here today?” the judge asked jokingly.

Lomax said no.

Judge Persons said the Commission’s order was not clear as to the meaning of “stable, low-cost electricity.”
Wiygul closed on behalf of the Sierra Club, saying the decision should be remanded back to the Public Service Commission.

If the decision is reversed by Judge Persons and is appealed, the case would go to the state Supreme Court.
Sierra Club filed its appeal in Harrison County Chancery Court in June and also at the Mississippi Supreme Court because the law was unclear regarding jurisdiction. Mississippi Power made a motion to keep the decision at the state Supreme Court. But in October the Court sent the suit back to Harrison County.