Archive for the ‘Mississippi Public Service Commission’ Category

Presley to file challenge to new oversight removal law

July 3rd, 2012 No comments

Northern District Public Service Commissioner Brandon Presley intends to challenge the constitutionality of a new law that removes the “carrier of last resort” mandate from AT&T and other layers of oversight from phone companies operating in Mississippi.

Presley, the Commission’s lone Democrat, said in an interview Monday that he sees the potential for rural customers to have their landline phone service eliminated, now that AT&T is no longer mandated by law to provide service to those areas. Presley also said the law’s removing single-line phone service rates from PSC jurisdiction violates the Mississippi Constitution.

Specifically, Presley cites Article 7, Section 186, which requires the Legislature to pass laws that allow for the “supervision” of telephone companies, among others, either by a commission or other entity.

“I intend to challenge this on behalf of little communities like Randolph and Dennis and Dumas – little places where customers have been paying a phone bill all these years, and they don’t deserve to have the rug jerked out from under them or have to pay out the nose is this bill stands,” Presley said.

Presley, who is challenging the bill as a private citizen and not in his capacity as a public service commissioner, said he hopes to file court papers in Hinds County Circuit Court either late this week or early next week.

Fitch downgrades Miss. Power’s credit rating after rate increase denied

July 3rd, 2012 No comments

Fitch Ratings on Tuesday downgraded Mississippi Power Co.’s Issuer Default  from “A” to A-.”

Fitch also revised the company’s rating outlook from “stable” to “negative.”

The rating agency said the downgrades were in response to the Mississippi Public Service Commission’s order from late June in which commissioners denied a revenue increase the company had requested in connection with the Kemper County coal plant. MPC officials testified at a hearing that in order to raise about $58 million to apply toward the plant, customer rates would need to increase by 13 percent.

In denying the rate increase, commissioners said they would take no action on rate increases associated with the Kemper facility until the Mississippi Supreme Court has its say on litigation surround it. The Sierra Club currently has the issue before a Harrison County chancellor for the second time.

No matter the outcome at the chancery court level, it’s expected to reach the state’s high court again.

Fitch also expressed concern with the 15 percent cost overrun MPC revealed to monitors in May. Currently, the plant’s projected cost sits at $2.76 billion, 15 percent more than the original estimate of $2.4 billion.

“Fitch’s financial analysis indicates that if the project becomes operational within the currently projected capital costs and schedule, and based on the assumption that the MPSC authorizes a timely recovery of both capital and operating costs, Mississippi Power’s credit metrics are expected to revert to Fitch’s guideline ratios of a low risk ‘A-‘ rated utility company by 2015,” Fitch said in a press release. “Until then, however, Fitch expects Mississippi Power’s credit metrics to remain considerably weak.”

Miss. Power: Kemper costs to exceed original estimate by 15 percent

June 8th, 2012 No comments

Mississippi  Power Co. announced late Friday afternoon that the Kemper county coal plant’s costs are close to butting up against the $2.88 billion cap the Public Service Commission imposed on the project.

A company press release says the news was revealed during a meeting with independent monitors. It does not say how far along construction is. It also does not say when the meeting in which the cost information was revealed took place. There was a meeting set for early May between monitors and the company to address the project’s contingency being close to depletion.

The plant’s latest figures would have been included in the independent monitor’s June report. The monthly reports have not been made readily available to the public as far as being posted on the PSC website like the orders and various other filings  associated with the project have been.  The Mississippi Business Journal filed an open records request on June 1 for the June report.

The release also does not say how far along construction is. The PSC voted 2-1 — Northern District Commissioner Brandon Presley was the dissenting vote — April 24 to reissue Kemper’s certificate. Part of the order granting that certificate said that monitors and company officials would meet in early May to discuss the dwindling contingency and other matters.

Here’s the press release, verbatim:

Mississippi Power, in its monthly meeting with the Mississippi Public Service Commission (PSC) Independent Construction Monitors, reports the Kemper plant construction is progressing on schedule and continues to be the best generation option for customers. The plant will be on line May 2014 and immediately begin saving customers on fuel costs.

The construction costs are currently projected to be approximately $2.76 billion or 15 percent above the original construction estimate prepared in 2009. The PSC established a cost cap of $2.88 billion for plant construction.

 Mississippi Power will deliver additional economic value for the Project from increased byproduct sales, such as CO2, and savings from lower financing costs. Because of these benefits to customers, the new estimate will not increase the rate impact of Kemper.

 “We are committed to bringing the Kemper Project on line, within the cost cap, to provide clean, safe and reliable energy to our customers,” said Cindy Duvall, company spokeswoman. “We work every day to find ways to bring value to our customers while preparing to meet their future energy needs.”

 Mississippi Power, a Southern Company subsidiary, serves approximately 188,000 customers in 23 southeast Mississippi counties.


Indiana coal plant’s rate impact will be smaller than Kemper’s

May 2nd, 2012 No comments

Mississippi Power Co.’s Kemper County plant isn’t the only coal-fired generation facility the Sierra Club has fought recently.

In Indiana, Duke Energy is building an integrated gasification combined cycle plant that will use bituminous coal, which sits a little deeper in the ground than lignite, which is abundant in East Mississippi and will serve as the main fuel source for the Kemper plant.

The company is catching it from a number of consumer groups, to go with the Sierra Club.

Duke Energy recently settled a round of litigation sparked by who would pay for the plant, the company or its ratepayers. Much of the hand-wringing had to do with who would foot the bill for $920 million in cost overruns on the roughly $3 billion project.

The settlement terms spelled out the rate impact for Duke customers: Electricity bills would go up 14.5 percent as the plant’s costs (at least some of them) were passed through. Various media reports in Indiana said that without the settlement, ratepayers’ bills would go up 22 percent.

Why that’s interesting is lignite coal is cheaper to recover, because its beds are generally closer to the surface than those of traditional coals like bituminous, making it easier to mine. The Kemper plant will use lignite, and like the Indiana plant, its costs — up to $2.88 billion — will be passed through to Mississippi Power ratepayers. It’s worth noting, though, that the ratepayer cost cap for the Indiana plant is $2.59 billion, about $300 million less than the Kemper facility. A really good overview of the plant’s finances can be found here.

The April 24 order the Mississippi Public Service Commission issued granting a new certificate of public convenience and necessity for the Kemper plant said rate increases would peak at 30 percent in 2014, when the facility is scheduled to start commercial operation, before declining as Mississippi Power pays off the plant’s debt. That figure was arrived at after months of proceedings before the plant was approved, litigated and approved again last week.

The 30 percent number differs from documents MPC filed with the PSC in 2009, in response to a set of data requests from Florida-based Entegra, which wanted to know how the plant would affect power bills in South Mississippi. Mississippi Power filed the information confidentially, but the Mississippi Business Journal obtained it via an open records request in 2010.

The rate impact data MPC filed then said hikes would be a touch more than 45 percent. That number has been disputed recently, most vehemently by Southern District Commissioner Leonard Bentz, whose territory includes the vast majority of Mississippi Power’s 186,000 customers.

PSC votes 2-1 to reissue Kemper certificate

April 24th, 2012 No comments

The Mississippi Public Service Commission voted 2-1 Tuesday morning to reissue the certificate of public convenience and necessity for Mississippi Power’s coal-fired plant in Kemper County.

Northern District Commissioner Brandon Presley was the dissenting vote.

The Mississippi Supreme Court ruled in March that the PSC failed to cite sufficient evidence from the record in granting the first certificate. The court’s 9-0 ruling kicked proceedings back to the PSC. Preserved in the latest certificate is the $2.88 billion cap on construction costs MPC can pass to its ratepayers. Any cost overrun above $2.4 billion still must be approved by the PSC. Also, any construction costs above $2.4 billion cannot be recovered until the plant is in commercial operation.

MPC spokesman Jeff Shepard said after Tuesday’s hearing the plant would begin full-scale commercial activity in May 2014.

Louie Miller, executive of the Mississippi chapter of the Sierra Club, said after the meeting his organization would file for a stay on Tuesday’s ruling by the end of the day. It was unclear whether that filing would be made in Harrison County Chancery Court or with the Mississippi Supreme Court.

In latest filing, Miss. Power seeks permission — with conditions — to exceed Kemper cost cap

April 23rd, 2012 No comments

Mississippi Power Co. is asking the Public Service Commission to allow it to exceed the $2.88 billion cost cap on its Kemper County coal plant, under certain conditions.

Those are claims the Sierra Club, an opponent of the plant, made in a conference call Monday.

The company filed April 12 a revision to its proposed final order (which it filed April 2) that essentially seeks permission to go beyond the cost cap as long as it:

* Produces what the company calls “efficiencies” that are netural or favorable to the ratepayer. In other words, as long as it doesn’t cost the ratepayers any more money, or it saves ratapayers money over the life of the plant.

* The proposed cost increase is accompanied by an equal or greater revenue requirement decrease  associated with one or more of the other estimates (like operational performance or sales of byproducts) in the company’s original proposal.

* The cost increase is caused by a natural disaster, terrorist strike, change in utility law, some sort of sabotage or a related event.

* To the extent the PSC does not allow 100 percent construction work in progress (CWIP), which MPC assumed when it made the $2.4 billion cost estimate, it will allow an increase in that figure to reflect the allowable funds used during construction (AFUDC) that CWIP would have obviated.

Mississippi Sierra Club’s Louie Miller said what MPC is asking for amounts to the company “reneging on everything they’ve agreed to.”

“We’re going from a mandatory-type environment to a permissive environment. This is what we’ve been concerned about all along.”

Commissioners have called a special meeting for Tuesday morning, where they will take up the Kemper project.

UPDATE: MPC spokesperson Jeff Shepard said after Tuesday’s hearing that the company was not trying to exceed the outer hard cap of $2.88 billion, but trying to “supplement the record” with more information.

Kemper coal plant on agenda for special PSC meeting Tuesday

April 19th, 2012 No comments

The Mississippi Public Service Commission will hold a special meeting Tuesday, and only two items are on the agenda.

One of those is Mississippi Power Company’s Kemper County coal plant. The other has to do with Willmut Gas and Oil Company and EnergySouth seeking approval of a transfer of control. Obviously, one will get a lot more attention than the other.

Commissioners have had a couple weeks to review the three proposed final orders they received related to Kemper. The Sierra Club and Entegra Power Group, a Florida-based company that operates and markets electric power from natural gas-fueled power plants to wholesale customers, each proposed that the PSC reopen the Kemper docket with the aim of exploring options to include natural gas instead of lignite coal as the plant’s main fuel source.

Mississippi Power proposed an order that the PSC re-issue the certificate of public convenience and necessity for the plant. Commissioners can adopt one of the three orders, or issue their own.

Central District Commissioner Lynn Posey told the Mississippi Business Journal in early April that it’s almost certain Commissioners will issue their own order. He added that it would probably contain parts of each of the three proposed orders, but wouldn’t go into detail beyond that.

Tuesday’s agenda says there will be discussion “and possible action” on the two agenda items. So it’s no guarantee the PSC will do anything definitive. Like every other Kemper hearing, though, Tuesday’s should be a show.

Bentz: MBJ’s Kemper coverage inaccurate

April 3rd, 2012 1 comment

The Mississippi Public Service Commission held its regularly scheduled meeting Tuesday morning, and it was more noteworthy for what happened afterward than what happened during it.

The good news: Southern District Commissioner Leonard Bentz finally spoke with a reporter about Mississippi Power’s lignite coal-fired generation plant in Kemper County. The bad news: It was a brief conversation.

“Y’all haven’t printed one thing that’s accurate,” Bentz said, referring to the Mississippi Business Journal’s coverage of Kemper from the PSC’s 2010 approval of the $2.8 billion plant to the Mississippi Supreme Court’s recent ruling that the Commission’s decision to grant a certificate of public necessity and convenience was not based on “substantial evidence presented.”

Bentz wouldn’t say what he felt was inaccurate. “Just quote that,” he said, walking away and pointing his finger at a reporter. “Quote that.”

Bentz joined Central District Commissioner Lynn Posey in 2010 in granting the certificate for the Kemper plant. Northern District Transportation Commissioner Brandon Presley dissented.

The Mississippi Chapter of the Sierra Club challenged the project in Harrison County Chancery Court, which ruled in favor of MPC. After the Sierra Club appealed, the state’s high court ruled 9-0 that the PSC would have to revisit the facts that led to it approving the project. Last Friday, the PSC voted — with the same split – in a 45-second hearing to temporarily authorize MPC to continue construction on the project.

Posey has not spoken with the media since the court’s decision, either.

Presley has said repeatedly that while he’s not against the use of coal to generate energy, he would rather MPC pay for the project itself, rather than passing the cost through to its ratepayers via increased power bills.

An MPC spokesperson said after last week’s hearing that the company has spent $1.1 billion on the project, most of that paying for the installation of underground utilities.

Split PSC allows Kemper to move forward (Updated)

March 30th, 2012 No comments

The Mississippi Public Service Commission voted 2-1 Friday morning to allow — at least temporarily — Mississippi Power Co. to continue construction on the Kemper County coal plant.

Northern District Commissioner Brandon Presley was the dissenting vote.

Commissioners will hold another hearing Tuesday morning to decide if they will issue a permanent certificate of public necessity and convenience. Friday’s hearing was in response to a 9-0 ruling in mid-March by the Mississippi Supreme Court that said the PSC — in the same 2-1 split — decision in 2010 that moved Kemper forward was not based on “substantial evidence presented.”

In his written dissent, Presley cited John Conlee’s classic country music hit “Rose Colored Glasses,” writing that “the rose colored glasses allow the majority to bypass state laws about certificate proceedings, redefine ‘temporary,’ and brush away apparent cost overruns while forcing customers to bear risk for untried technology.”

Presley, the only commissioner to speak to reporters, said after the hearing — which lasted less than one minute — that “(MPC) is already in a too-big-to-fail scenario. I guarantee you we’ll be bailing them out eventually, and I’m against that kind of corporate socialism.”

MPC spokesman Jeff Shepard denied that the coal-fired generation plant is experiencing cost overruns. He added that the company has spent $1.1 billion on the project since construction started in 2010. Construction is expected to finish in 2014. Halting construction would lead to massive cost overruns, he said, noting that contractors who have already been hired would continue to bill the company.

“The cash register is ringing the entire time,” he said.

Mississippi Sierra Club director Louie Miller called Friday morning’s hearing “patently illegal,” saying that such hearings should contain public testimony. “The reason they haven’t opened this docket up is because they know it couldn’t stand the light of day,” he said, adding that the Sierra Club will appeal Friday’s decision, whose legal journey will most likely lead right back to the Mississippi Supreme Court.

UPDATE: A small correction: I just finished reviewing the docket for Tuesday’s meeting, and Kemper isn’t on there. It could be added, up to 24 hours before the meeting. Or, if commissioners want to add it during the meeting, they could, if all three agree to do so. That’s highly unlikely. It’s also unlikely that it will be on the docket if it’s not on there by now.

That said, the issue will be taken up either at the PSC’s next regularly scheduled meeting in May, or during a special called meeting in April. Sorry for that confusion. Y’all have a good weekend.

MPC asks PSC to validate certificate in light of court’s ruling

March 29th, 2012 No comments

In advance of Friday morning’s hearing, Mississippi Power Co. filed Thursday a motion asking the Public Service Commission to issue a declaratory opinion affirming that the certificate of public convenience and necessity the Commission issued for the Kemper County coal plant last year is still valid.

The Mississippi Supreme Court ruled 9-0 March 15 that the PSC’s split decision to grant the certificate in 2010 was not based on “substantial evidence presented.” Northern District Commissioner Brandon Presley voted against the project. The Southern District’s Leonard Bentz and Lynn Posey of the Central District voted for it.  MPC said shortly after the high court’s ruling that it would continue construction on the project.

What MPC is asking commissioners to affirm is that, essentially, the Supreme Court’s ruling does not disallow construction on the $2.88 billion project from continuing.

The motion says that stopping construction would do “significant and potentially irreparable harm to MPC and its customers and to ensure the timely and cost-effective completion of the Kemper Project in order to assure maintenance of adequate service to customers.”

Commissioners will take up the matter Friday at 9 a.m. in the PSC meeting room of the Woolfolk building in Jackson.