Mississippi Supreme Court Questions Kemper Coal Plant

Supremes Question Kemper

Residents near a planned 582-megawatt coal plant protested the project that threatens to raise their electric rates by 45 percent.

by R.L. Nave
Dec. 21, 2011

In all the pages of court records regarding a dispute between environmentalists and an electric utility company–pages that one Mississippi Supreme Court justice characterized as the most voluminous he has seen in his eight years on the court–one important piece of information eluded the justices.

What changed between April and May for the Mississippi Public Service Commission to reverse itself and allow Mississippi Power Co. jack up the cap on a 582-megawatt Kemper County coal plant by $480 million dollars?

“So far I don’t find anything in the commission’s order itself–and haven’t yet found in the record–what it is that would help me understand that the commission is justified in making this factual conclusion that the risks are now balanced,” presiding Justice Jess H. Dickinson said last week.

Brandon Presley, the PSC’s northern district commissioner, has an idea. Presley voted against fellow commissioners Lynn Posey and Leonard Bentz, of the central and southern district respectively, on the cap increase.

“The only thing I saw change was letters came in from Barack Obama’s energy secretary and Haley Barbour,” Presley said.

Last summer, Energy Secretary Steven Chu and Gov. Barbour wrote letters asking Presley to reconsider his opposition to Mississippi Power raising the price tag of the plant, which is now under construction. Presley balked at the idea, calling the project a bad deal for consumers.

“If President Obama or Governor Barbour like this plant so much, let them come up with a way to pay for it,” he told the Jackson Free Press last week.

Presley, along with consumer and environmental advocacy groups, has fought to oppose the plant, albeit for slightly different reasons at times.

“I have no problem whatsoever with clean coal technology,” Presley said. “I have a problem with asking the people of Mississippi to be guinea pigs.”

The Sierra Club opposes the 582-megawatt plant because it is slated to use experimental internal gasification combined technology to burn low-grade lignite coal. As the basis for its lawsuit against Mississippi Power and the PSC, the suit before the Mississippi Supreme Court, the Sierra Club also argued that the commission failed in its obligation to publicly explain its rationale for the reversal.

On April 29, 2010, Commissioners Posey and Bentz issued a decision limiting the ratepayer cost of the plant to $2.4 billion. Mississippi Power stockholders of Company would have to pick up any costs above $2.4 billion, they said at the time.

The Atlanta-based utility complained that it should be able to pass any additional costs down to the ratepayers, and warned that it could not afford to build the plant if not allowed to pass on all the costs, including those above $2.4 billion.

Less than one month later, the commission revised its decision May 26, allowing the company to charge ratepayers up to $2.88 billion for the plant. Mississippi Power did not publicly release the amount of the rate increase customers would shoulder as a result.

After being pressed by justices at the hearing, Sierra Club attorney Robert Wiygul said he obtained confidential information showing that ratepayers’ energy bills could rise as much as 45 percent.

Since the hearing, the justices are reviewing the remainder of the court documents and could bring the parties back to clarify some points before the three-judge panel or the full nine-member court. From there, they can remand the issue back to the PSC for review or strike provisions of the deal.

PSC Commissioners Posey and Bentz did not return calls by press time.

“I’m not counting any chickens before they hatch,” said Louie Miller, state director of the Mississippi Sierra Club. “I’m going to remain cautiously optimistic.”

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Jackson Free Press Picks up on the Kemper Related Elections

Why the PSC Race Matters

File Photo

by Adam Lynch
July 27, 2011

Few people attend the monthly meetings of the Mississippi Public Service Commission, outside of utility company officials and their host of attorneys. Generally, when the talk is about electricity, gas or telecommunications, eyes glaze over.

But the Public Service Commission is an essential body of state government charged with overseeing the behavior of the state’s biggest power-producing monopolies. It also makes sure telemarketers adhere to cold-call rules set by federal and state laws, but the monopoly-overseeing bit is the part that dictates how much your monthly power bills go up or down.

Power companies must approach the three-member commission for permission to implement rate increases. Commissioners, who are elected, receive political backlash for allowing those rates to jump up noticeably. It’s a workable relationship, but some new candidates are trying to see how far they can push the most recent backlash.

A majority of the commission voted last year to allow Mississippi Power Co. to charge ratepayers for construction of a $2.88 billion coal-burning plant in Kemper County–after some coaxing by Gov. Haley Barbour. Barbour’s former Washington lobbying firm helped secure some federal money for the project (thus, he arguably benefits from the construction because he receives a income in the form of a blind trust from the firm). But Mississippi Power Co. ratepayers have to fund the brunt of the thing, and commissioners did not release its potential rate increase impact to the public. Nor have they allowed the rate increases, which could end up as a 50 percent increase, to slip into customers’ monthly statements prior to the election.

The two commissioners favoring the construction of the plant, incumbents Leonard Bentz and Lynn Posey, say the coal plant will pave the way to a future of stable or cheap electricity prices because coal is one of the country’s most plentiful energy resources. They say they are not only looking to the state’s long-term future, but that the plant will put Mississippi at the forefront of a carbon-neutral energy revolution. The Sierra Club, an environmentalist group, says the plant’s carbon capture technology is unproven and unreliable.

Only Northern District Democrat Brandon Presley opposed the construction of the plant. Presley screamed into every microphone his reasons for opposing the new plant, and protested the power company’s desire to keep the rate increases private. He was a minority of the board, however.

Candidates are lining up to attack the incumbents for that decision. Republican and self-professed Tea Party candidate Travis Rose said the Kemper County plant decision was his main reason for running against incumbent Bentz.

“As a Tea Party member … the Kemper County decision really upset me,” said the St. Martin resident. “Our elected officials like to claim they’re transparent and accountable. Yet, when I go on their website regarding the Kemper plant I see one press release on Kemper County, and you have to go into their archives to see something from last April with them bragging about it capturing CO2. They don’t tell us about any estimate of what it’s going to do to our utility rates.”

Democratic candidate James M. Buckhaults, a former Ellisville alderman, said he was waiting to take Bentz on in the general election for the same reason. “They decided to go along with the Legislature in making us pay for that thing before they even start building it, which I think is crazy,” he said.

Buckhaults will first have to beat southern commission Democratic candidates Thomas Blanton and Mike Collier before he gets that privilege. Neither Blanton or Collier returned calls.

Republican Lynn Posey faces no opposition from his party; Haley Barbour’s nephew Charles Barbour politely ducked out of the race. Posey adhered to Barbour’s wishes in favoring the Kemper County plant. Posey must contend with Democratic opponents Bruce Burton and Addie Green, and Independent Danny Ayers, however. Burton and Ayers could not be reached, while Green did not return calls by press time.

Presley faces no primary candidate, but is up against either Boyce Adams Jr. or Marvin Cox after the winner survives the Republican primary. A Tea Party of Mississippi founding member, Cox pushes no real issues on his campaign website (http://www.votemarvincox.com), but touts himself as a “Christian Conservative Republican who seeks to provide better access to commissioners and staff.” His website reveals no insight he may have upon PSC business.

Adams, who co-owns with his father a bank software developer BankTEL Systems, has a Vanderbilt University bachelor’s degree in economics and political science. On his website (http://www.boyceadams.com), he says he worked in the George W. Bush White House focusing on presidential appointments to energy regulatory institutions. He plans to “keep energy costs low and maintain reliable energy sources.” He does not say whether he would have voted differently from Presley on any decisions.

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