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Regulator: Day’s departure due to his withholding Kemper information

Mississippi Power Co. has made an abrupt change at the top.

Southern Co.’s board of directors voted Monday to name G. Edison “Ed” Holland the utility’s new leader. Holland replaces Ed Day, who has been president since 2010. Day has spent a total of 30 years with Southern Co.

The change will be effective immediately. Holland will be “responsible for the operations of Mississippi Power, including overseeing the continued construction of the Kemper County energy facility,” said a company press release.

Southern Co. gave no reason for Day’s departure, but it comes about a week after the Mississippi Public Service Commission learned that Day had ordered that documents containing details of when the utility knew about cost overruns at the Kemper County coal plant be withheld from regulators.

The PSC in April 2012 affirmed the project’s certificate of public convenience and necessity, after the Mississippi Supreme Court ruled that the original certificate – issued in 2010 – did not cite sufficient evidence from the record of proceedings.

In May 2012, Mississippi Power revealed that the Kemper facility would cost roughly $300 million more than it had originally estimated.

Southern District Commissioner Leonard Bentz, who counts as his constituents most of Mississippi Power’s 190,000 ratepayers, said in an interview Monday morning that regulators asked about a year ago for information that outlined when the company knew about the overrun, in response to it being revealed right after the PSC reaffirmed the project’s certificate.

Day, Bentz said, ordered that the information be withheld.

“My investigation revealed about a week ago that there was information not being given to us under the direction of Ed Day,” Bentz said. Bentz said regulators received the requested overrun information last week. He added that his office will continue to investigate the matter.

“We’re not done,” he said. “This is an absolutely ridiculous way of doing business. Corporations sometimes hide behind trying to protect the shareholders. If this is what that is, they live in a different society than what’s right. We were not fed and given the proper information. What does that do to the credibility of Mississippi Power moving forward?

“This is a culture that has kind of somewhat become acceptable in the corporate world, to put a spin on everything,” Bentz continued. “Talk straight and give me the truth. A spin is a lie to me. We are not done. We are going to protect the ratepayers. Ed Day’s departure is a direct result of us as regulators doing our jobs and protecting the ratepayers.”

Bentz said Southern Co. CEO Thomas Fanning “has done everything he said he would do” since becoming involved in the matter. “He deserves a lot of credit.”

The Kemper County coal plant is scheduled to begin production in May 2014. Mississippi Power last month revised the project’s cost estimate upward, bumping it to just over $3 billion. Per the terms of a settlement with the Mississippi Public Service Commission, the utility can charge ratepayers only for the first $2.4 billion in construction costs. Lawmakers approved in the session that ended in April up to $1 billion in bonding authority that would cover cost overruns. The bond falls outside PSC jurisdiction.

“They told us they could build this plant for $2.4 billion, and that’s what we expect them to do,” Bentz said.

  1. Daniel-Mississippi
    May 20th, 2013 at 15:10 | #1

    Bentz is a Southern Company stooge.

  2. bckcast
    May 20th, 2013 at 17:53 | #2

    Bentz is a good man trying to do the right thing. I believe
    the Southern Company is getting ready to feel the terrible sword
    of his righteous indignation.

  3. Ed
    May 21st, 2013 at 07:29 | #3

    Remember that Posey and Bentz made this all happen in the first place. I think he doth protest to much. Maybe they will listen to Presley for change. ( I doubt it.)

  4. DC
    May 21st, 2013 at 07:44 | #4

    The last sentence stating that the bonds are outside PSC jurisdiction is incorrect. The PSC must issue an order approving the $1B cost overrun. That order will then be used as security to finance the bonds. Additionally, the PSC, in their settlement agreement, is allowing Mississippi Power to recover $2.4B for the plant, plus the cost of the mine and pipeline, etc. (approx. $700m). The total the PSC will be put in rate base, with a return, will exceed $3B. When you add on the $1b in cost overruns bonds you have a total recovery from ratepayers of approximately $4B. When this project started 5 or so years ago, it was sold to the public as a $1.2B project. It then went to $1.8B, then $2.4B, then $2.88B, and now in excess of $4B.

    You have to also remember that this is not even a large power plant, only approx. 580MW. For comparison, Georgia Power Company, another subsidiary of Southern Company, recently completed a 2500MW state-of-the-art efficient combined cycle gas plant for $2B!! That’s right, a plant was just completed in Georgian that is five (5) times larger than Kemper at one-half the cost.

    While Commissioner Bentz is having priate conversations (is that legal?) with the CEO of Southern Company to figure out how to deal with this mess, he should also explain to ratepyers how he is going to vote on the cost overrun bonds without violating his statements to the public that he will not approve any cost for the plant above $2.4B.

  5. Rob Worden
    May 21st, 2013 at 09:18 | #5

    My my my the chickens are coming home to roost. This is now and always has been a farce of the worst kind. It starts off with balloons and fried chicken and ends with perp walks and ‘outraged’ politicians.

    This type of good ol boy project always blows up eventualy. Kemper is just going to be bigger than most

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