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(UPDATED) PSC requests proposals for Kemper County coal plant


JACKSON — State utility regulators have asked Mississippi Power Co. and the Sierra Club to submit proposals on how to proceed with the Kemper County coal-fired power plant.

The Mississippi Supreme Court ruled on March 15 that the Public Service Commission failed to lay out its reasoning clearly when it changed the terms under which Mississippi Power could build what it calls Plant Ratcliffe in Kemper County in the eastern part of the state.

The Supreme Court told the PSC to clarify how it decided to allow construction of a Kemper County power plant last year. The court the absence of specific findings clouded the PSC’s decision. The justices said without such details they could not determine if the PSC decision was supported by the evidence.

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In an order filed this past week, the PSC gave the two sides an April 2 deadline to submit proposals.

The key issue is not whether the plant is a good idea, but whether the PSC adequately laid out its rationale.

“We received a request last week from the PSC for proposed orders for the Kemper Project. The request for proposed orders is entirely consistent with and in response to the Supreme Court’s decision. We will comply accordingly. We stand firm that the merits of the project speak for themselves,” said Mississippi Power spokeswoman Cindy W. Duvall.

The Sierra Club wants the plant construction stopped. Mississippi Power has said it will continue construction of the $2.7 billion coal power plant and is confident regulators and courts will green light the deal.

Mississippi Power officials said Wednesday they were reviewing the order.

Louie Miller, director of the Mississippi Sierra Club, said in a statement that the order essentially asks the two sides to prove why the PSC made a decision on the plant two years after the fact.

“I thought the commission knew why it approved the plant and the 45 percent rate increase,” Miller said. “It almost seems like the commission is asking Mississippi Power to justify their approval of the plant. Sierra Club showed that the Kemper plant should never have been approved because it is dirty, expensive, and unnecessary.”

Miller said the PSC’s order asks for comments based only on information from the original Kemper plant proceedings held in March 2010. He said the PSC should be requesting new information reflecting changes in the market since then.

“The energy market has fundamentally changed since 2010, with natural gas prices at historic lows, making any new coal project uncompetitive,” Miller said.

Mississippi Power’s Duvall said the Sierra Club was ignoring the facts.

“This is more sensationalism from a desperate organization that is clearly not working with the facts or concerned with what is in the best interest of our customers,” Duvall said.

Mississippi Power has said rates will go up about 33 percent to pay for the plant.

A unit of Atlanta-based Southern Co., Mississippi Power would buy lignite mined nearby, turn it into a synthetic gas, and burn the gas, capturing byproducts such as carbon dioxide and selling them.

The technology is supposed to allow coal to be burned more cleanly and cut emissions of carbon dioxide, which scientists say contribute to global warming. Mississippi Power says the plant is needed to provide more electricity for its 193,000 customers scattered from Meridian to the Gulf Coast.

The PSC originally voted in 2010 to cap at $2.4 billion the amount that Mississippi Power could charge ratepayers for the plant. Commissioners also said the power company couldn’t charge ratepayers for the plant before it started operation.

Mississippi Power said it couldn’t build under those conditions and asked the PSC to reconsider. Lawyers for the company said it needed wiggle room for cost overruns, and wanted to charge ratepayers early to cut the interest customers would pay on money borrowed for the project.

A month later, commissioners voted 2-1 to give Mississippi Power what it wanted, raising the cost cap by 20 percent, to $2.88 billion. It also allowed Mississippi Power to start charging before the plant’s scheduled start in 2014.

— Jack Elliott, The Associated Press


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About Ross Reily

Ross Reily is editor of the Mississippi Business Journal. He is a husband to an amazing wife, dad to 3 crazy kids and 2 dogs. He is also a fan of the Delta State Fighting Okra and the Boston Red Sox.

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