Brandon Presley: Consumers lost in Mississippi Power’s planned Kemper County plant | Better MS Report

Brandon Presley: Consumers lost in Mississippi Power’s planned Kemper County plant | Better MS Report.

From Better Mississippi Report:

JACKSON (Tuesday, July 6, 2010) – Public Service Commissioner Brandon Presley says consumers lost in Mississippi Power Co.’s planned Kemper County coal plant because the utility doesn’t have to guarantee the technology behind the project will ever work.

Mississippi Power’s plant, the first of its kind in the world, will use a new technology that converts a soft coal called lignite into a gas to fuel turbines and create electricity. The concept is high risk because no one can guarantee that the technology to be used in the plant will work.

Presley said Gov. Haley Barbour and U.S. Energy Secretary Steven Chu sent letters asking for support of the Mississippi Power plant. But Presley voted in April and May against forcing Mississippi Power ratepayers to finance the plant.

“I received letters urging me to support the project from everyone from Gov. Barbour to Steven Chu, secretary of energy in the Obama administration,” said Presley, who represents the Northern District on the three-member PSC.

“If they thought it was such a good project, why didn’t they find a way to pay for it rather than forcing Mississippi Power’s customers to be the sole investors in the plant?” Presley told the Better Mississippi Report.

The PSC voted 2-1 in April to allow Mississippi Power Co. to build the Kemper County plant at a cost of no more than $2.4 billion. Commissioners said they would decide at a later date whether to grant Mississippi Power’s request for ratepayers to finance the plant before it begins operating.

Less than a month later in May, the PSC voted 2-1 to increase the cost cap of the Mississippi Power plant to $2.88 billion and also allowed the company to charge ratepayers for financing costs before the plant is completed.

Presley cast the sole no votes at the April and May meetings.

Presley, 32, a lifelong resident of Nettleton, is in his first term on the PSC – winning the position in 2007 after serving as mayor of Nettleton from 2001 to 2007. He talked about the Mississippi Power plant and other issues in an interview with the Better Mississippi Report.

Better Mississippi Group: You were the only member of the Mississippi Public Service Commission to oppose the Mississippi Power Co. plan to build a coal-burning plant in Kemper County. Can you explain your concerns about this proposal and why you voted against it?
Brandon Presley:
Very simple. Mississippi Power wanted the ratepayers to pay in advance hundreds of millions of dollars in financing costs and then $2.4 billion (now up to $2.88 billion) for the plant itself, and after hours and hours of sworn testimony and days of hearings they would not, and to this day, still will not, guarantee their new technology to be used in this plant will work.
If I had voted yes for this plant, I would have been a part of forcing ratepayers in one of the poorest states in the nation to pay, in advance, for something the company can’t even guarantee will work and that was, obviously, a big concern to me. I strongly support innovative technology, and I have a deep admiration for the scientists and engineers who bring about groundbreaking ideas that could make our lives better. But I believe the companies themselves and private sector investors should be willing to take some of the risks and not force all the risk on ratepayers who don’t have a choice in their providers. Remember, customers of Mississippi Power can’t choose who provides their electricity. They must use Mississippi Power or be in the dark, literally. So they are now being forced, via their electric bill, to invest in this plant.
I received letters urging me to support the project from everyone from Gov. Barbour to Steven Chu, secretary of energy in the Obama administration. I wondered if they thought it was such a good project, why didn’t they find a way to pay for it rather than forcing Mississippi Power’s customers to be the sole investors in the plant?
Also, I felt strongly that since there are so many unknowns out there, especially about the technology itself, that nothing would have been harmed by waiting. As I have said, Henry Ford built a better car five years after he started on his first one.
In a few years, we should have a better idea about other discoveries going on now, such as the impact of shale natural gas and also about the technology in the plant. Maybe then Mississippi Power will be able to guarantee that it will work. In a few years, we should also have a better understanding of the current energy legislation and environmental regulation that is being debated in Washington.
If Mississippi Power is going to ask consumers to pay up to $2.88 billion, plus hundreds of millions in banking fees (before the plant puts out any electricity), they need to have their ducks in a row with technology that they can guarantee works and share some of the risk. They didn’t. So I voted “no” twice.

Better Mississippi: The vote was a total change from a stand the PSC took days earlier. Can you tell us what led to the about-face on the PSC?
Presley:
I’ve been consistent – I voted no both times. You would have to ask the other two commissioners that question. Even though I could not support the project after hearing and studying the facts presented to us for months, I felt the first order on April 29th was strong and at least had some good protections in it for the ratepayers. I do not know why the majority voted to ease up on that order and grant the company another $480 million in spending authority under certain circumstances.

Better Mississippi: Mississippi Power Co. won’t release the possible increase in electric rates that customers may have to pay to finance construction of the Kemper County plant. Is this something that should be released to the public? Why?
Presley:
Absolutely. They should have been disclosed before the plant was approved. It was one of the reasons I voted against the project. Two times before the final votes, I asked if the rate impacts were going to be made public before the project was approved, and both times the answer was “no.”
The customers of Mississippi Power have a right to know how this plant is going to impact their bills. They shouldn’t have to wait until they get the bill out of their mailbox to understand how much it is going to cost them. I had proposed changing the rule that allowed Mississippi Power to deem these rate impacts “confidential” prior to the final vote on Kemper. I raised the issue of changing this rule in May but was out-voted. The issue was taken up in our June meeting, at which time it passed unanimously.

Better Mississippi: With the Sierra Club taking the Mississippi Power Co. Kemper County issue to court, how do you see things working now? Will this be a long, protracted case?
Presley:
All I know is that I will keep fighting for taxpayers and ratepayers no matter what happens.

Better Mississippi: You are one of three commissioners on the PSC. Can you tell us about your relationship with the other commissioners? Do you all tend to get along? How do you handle disagreements on major issues, such as the one with Mississippi Power Co.?
Presley:
I like my fellow commissioners and think they’re good men. As with any three-member commission, we are going to disagree from time to time.
With that said, I tend to be very passionate about the job the people elected me to do. I’m passionate about what I believe a regulator is supposed to do. I won’t back down when I believe consumers are getting a raw deal or when I see something unfair about the process. I think that’s what the ratepayers expect and it’s certainly how an elected official who is protecting the public’s interest should act, in my opinion.
When you have the courage of your convictions, you don’t mind going against the grain or standing alone. I recently heard a pretty good saying that fits this situation, “Even a dead fish can go with the flow.” I don’t plan to be a “go with the flow” commissioner.

Better Mississippi: What do you see as the biggest challenge of the PSC these days?
Presley:
The single biggest challenge is making sure that consumers aren’t left out of the picture at the PSC. It seems that almost every rate plan, service plan, rule and regulation was written for and by the utilities for their benefit. Too many times the people who actually have to pay the utility bills have just been left out of the process and forgotten. The simple fact is that if the PSC doesn’t stand up for the consumer, nobody else is going to.
We desperately need balance at the PSC. And by that, I mean that we need to remember that there are real people, families, small businesses and industries that have to pay for these rate hikes and proposals. The utilities have a vast reservoir of attorneys, lobbyists, experts and cheerleaders. All the general public has is the PSC.

Better Mississippi: What do you see as the most important regulatory issues facing the PSC and consumers in the state?
Presley:
So many Mississippians are facing very tough economic situations in their homes and at their businesses. My mission is to do everything possible to keep money in the pockets of taxpayers and ratepayers and not help the big utilities make undeserved profits. That is our single biggest challenge. I believe we can craft policies that are pro-consumer and pro-business. Letting utilities increase rates whenever they want hurts so many small businesses that are the backbone of our state’s economy. I am proud to say that I have voted against more spending and rate increases than any other commissioner in the history of the PSC.

Better Mississippi: How do you see your role on the PSC?
Presley:
I see my role as a watchdog for the public interest – period.
A commissioner I’ve gotten to know from another state says it best. One time, when the hearing room was full of attorneys and high-paid lobbyists for the utility companies, he called the meeting to order by asking everyone who was there on behalf of the utilities to please stand up. Almost the whole room, of course, stood to their feet. Then he told them to sit down. He then asked, “Who is here on behalf of the ratepayers?” Nobody responded and he stood up and said “You see, folks? That’s why I’m here. That’s my job.” I couldn’t agree more.

Better Mississippi: Statewide and district elections will take place in 2011. Do you plan to run for re-election? Why or why not?
Presley:
I honestly haven’t given it much thought. I’m consumed daily with issues at the PSC and getting my job done. I will make a decision about the election in the coming months.

 

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AEP Drops Carbon Storage Project On Lack Of Federal Carbon Limits – WSJ.com

AEP Drops Carbon Storage Project On Lack Of Federal Carbon Limits – WSJ.com.

   By Cassandra Sweet
   Of DOW JONES NEWSWIRES

American Electric Power Co. (AEP) will stop work on a low-carbon coal-fired power plant as political support shrinks in the U.S. for regulating heat-trapping emissions linked to climate change.

The facility, which had been touted as a leading project to make the complex technology commercially viable, is the latest sign that the U.S. power industry is moving away from carbon dioxide emission-reduction technology. A lack of consensus in Washington over regulating carbon dioxide emissions, coupled with sluggish demand for power, has pressured AEP and other utilities to cut investment in so-called clean coal technology.

AEP Chairman and Chief Executive Michael G. Morris said the project to capture and store carbon emissions from an existing coal-fired plant in West Virginia doesn’t make economic sense while U.S. climate policy remains uncertain and the economy is weak.

West Virginia regulators had prohibited the company from passing on the project’s costs to utility customers until federal greenhouse-gas reduction rules are in place, further weakening the project, Morris said.

AEP designed the system to capture at least 90% of the carbon dioxide from a 235-megawatt piece of the company’s 1,300-MW Mountaineer coal plant in New Haven, W.Va.

The second part of the system would treat and compress about 1.5 million metric tons of CO2 from the plant per year, then inject the gas into rock formations about 1.5 miles (2.4 kilometers) below the surface, where it would be permanently stored.

The company said it would terminate an agreement with the U.S. Department of Energy, which had offered AEP $334 million to cover part of the costs of the carbon storage project. The project was to be completed in four phases and begin commercial operation in 2015.

A similar plant using different technology, proposed for Taylorville, Ill., by privately held power generator Tenaska, was scuttled in January after Illinois lawmakers defeated legislation that would have allowed the company to pass through the $3.5 billion cost of the project to utility customers. The Energy Department had offered the company up to $2.6 billion in loan guarantees and a $417 million tax credit to support construction of the plant.

Other low-carbon coal projects are moving ahead.

Southern Co.’s (SO) Mississippi Power utility is building a $2.4 billion, 580-megawatt low-emission coal-fired power plant in Kemper County, Miss. The plant, which was approved by state regulators, is designed to convert coal or lignite into a gas, which is then used to generate electricity, with lower emissions than a traditional coal plant. The company obtained a $270 million grant from the Department of Energy and $412 million in federal tax credits to support construction of the project.

Another low-carbon coal project is being developed by a coalition of utilities and coal companies called FutureGen. The $1.3 billion project would retrofit a 200-megawatt Ameren Corp. (AEE) coal plant in Meredosia, Ill., with so-called advanced oxy-combustion technology and build pipelines to ship captured CO2 to a nearby storage facility. A federal environmental review of the project, which has $1 billion in federal funding, is still pending.

AEP, one of the nation’s largest utilities and one of the largest coal-fired power generators, is still focused on cutting emissions. The company has estimated that it will likely to have to modify or shut down several of its older coal-fired power plants under pending federal limits on traditional pollution that could cost $6 billion to $8 billion over the next nine years.

Shares of AEP closed Thursday about 1% lower at $37.55.

-By Cassandra Sweet, Dow Jones Newswires; 415=269-4446; cassandra.sweet@dowjones.com

Power’s High Price Will Cost Jobs PSC LEONARD BENTZ:

PSC COMMISSIONER LEONARD BENTZ: Power’s High Cost Will Cost Coast Jobs

Sunday, February 08, 2009 12:53 PM

(Source: The Sun Herald (Biloxi, Miss.) tracking By Mary Perez, The Sun Herald, Biloxi, Miss.

Feb. 8–Leonard Bentz knows this week he has to sign off on a fuel-cost adjustment requested by Mississippi Power and he knows it will mean job losses in South Mississippi.

“I believe I’ve had every single casino call me,” said Bentz, chairman of the Mississippi Public Service Commission. He said they’ve told him, “The fuel-price increase is going to make us have to lay people off.”

Mississippi Power has requested a 9.2 percent increase for residential customers. The increase is higher for commercial and industrial customers because fuel costs make up a larger portion of their bills.

For Northrop Grumman it could mean an increase of $2 million this year. Beau Rivage Resort and Casino faces a $700,000 to $800,000 increase and Island View Casino around $300,000.

“Those are just some of the numbers we are hearing,” said Bentz.

He tells everyone who calls him about the increase, “If you have an idea, please give it to me.”

Bentz said, “I should have signed that order two months ago. I’ve not allowed them to put the new fuel prices in place yet.”

Business owners knew the increase was coming. In July and August representatives from Mississippi Power gave all major business customers an estimate of the increase, said company spokeswoman Cindy Webb.  (I strongly question the effectiveness of this communication, for I have asked multiple Business owners and members of Chamber and rarely did one say, “oh yes I heard about it.”  And no one said MS power told me.)  In November, when the utility filed for the fuel-cost adjustment, representatives went back and gave the businesses specific costs.

“It’s our annual true-up on fuel,” said Webb. It’s not the largest annual fuel adjustment. That was 10 percent in 2006. In 2008 Mississippi Power customers paid a 4 percent fuel-adjustment increase, and Webb said there were decreases in 2002 and 2003.

“It depends on the fuel markets,” she said.

Mississippi Power Company hasn’t had public hearings on fuel increases, but Bentz scheduled one for Dec. 29 in Gulfport. Only a handful of residents and business owners attended. (that is because no one knew about the meeting.  Bentz cares more about his no call list than a change that will affect the homes of every Mississippian.)“It was not the best time in the world to have a hearing,” Bentz said, “but I wanted to have a public hearing anyway.” He said at the meeting the dollar-for-dollar “pass-through,” in a regulated market such as Mississippi’s, allows the utility to pass on the cost of doing business to the customer. If the company spends $100 million on fuel and is allowed a rate of return of 10 percent, the company can bill the customers for the additional $10 million.

“Mississippi Power Company can only earn what the state regulators allow them to earn,” Bentz said.

Mississippi Power uses coal and gas to operate its power plants.

Mississippi Power CEO Anthony Topazi said gas was up 100 percent in 2008 and coal was at an all-time high.

“I’m spending more to provide the same amount of energy,” he said.

When the prices were steadily climbing last year, the company negotiated multi-year contracts on the futures market to lock in the cost and be assured a supply of coal and gas.

“It’s a great deal when you lock that contract price in and the prices skyrocket,” said Bentz.” It’s a horrible deal when you lock that price in and the prices go down,” as they did in this case.

Bentz said he doesn’t have the staff or the $1 million it would take to do an audit to see if the utility paid the lowest price possible for fuel.

“There needs to be a disincentive, or some type of incentive to the power company for purchasing fuel the cheapest they possibly can do it,” he said.

It won’t be just the customers who feel the pinch. Bentz said, “I told Anthony (Topazi) the other day, ‘Y’all need to put these planes on the ground,'” referring to corporate aircraft.

Bentz added, “Profitmargins are not going to be what they were in the good years,” and he said, “I don’t believe bonuses are going to be paid to the amount that they’ve been paid.”

Webb said Mississippi Power has a hiring freeze and, “we are doing everything we can to control costs. We’re looking at the things we can do that won’t impact customerservice.”

If Bentz doesn’t sign the increase, he said, the Mississippi Supreme Court would most likely overturn that decision and grant it anyway, as the court has done in the past.

He can amortize the increase over 12 months or possibly two years. “When you do that, it’s just like putting it on a credit card,” he said, with the customers paying the carrying costs.

“It’s a crap shoot,” he said. “If prices keep going down it’s a great thing. But if they keep going up, you’re just compounding costs on top of each other.”

—–

To see more of The Sun Herald, or to subscribe to the newspaper, go to http://www.sunherald.com.

Copyright (c) 2009, The Sun Herald, Biloxi, Miss.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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A service of YellowBrix, Inc.

via PSC COMMISSIONER LEONARD BENTZ: Power’s High Cost Will Cost Coast Jobs.

Mississippi Coal Comments are in Red and added for commentary

No Limit to the Fees Passed Onto the People

Mississippi Power could not approve of this plant construction until there was unlimited funding to be passed along to us, the ratepayers.  2 out of 3 Public Service Commissioners suddenly changed their mind to lift the limit so building could proceed.

Mississippi Power Says Thanks But No Thanks

To Coal-Fired Plant

April 29, 2010

The three member Public Service Commission voted 2-1 today approving Mississippi Power’s plan to build a $2.4 billion coal-fired generating plant in Kemper County. However, the company, which has been fighting for over a year to win approval for the plant, says they will not build the plant.

The reason for this decision by Mississippi Power was the conditions put in force by the PSC. This includes a condition that put a $2.4 billion cap in the “amount of construction costs the company would be able to charge to rate payers.” The company said this restriction made it financially impossible to construct the plant.

The member who voted against the proposal was Brandon Presley, a Democrat, from the northern district. The politics of this is interesting. Presley said rate payers were not protected by even the proposal put forth by the PSC so I imagine he will make a populist claim for opposition. Presley as you may know is thought of as a rising star in the Democratic Party. But while he may claim populism, he is also siding with groups like the Sierra Club and labor unions- not necessarily groups you want attached to your hip as a candidate in Mississippi.

Mississippi Power Says Thanks But No Thanks To Coal-Fired Plant « Majority In Mississippi.

DEMONSTRATION Unit in Wilsonville, Alabama = Unproven Technology

The public is told by a Mississippi Public Service

Commissioner that this Lignite Coal Gasification 

Process is proven, solid, even guaranteed technology.

However there is much to be learned from a scale 

model to be built in China in 2012.  The new Kemper

power plant will be paid for in advance by Mississippi

citizens no matter the cost no matter the risk.  

It is being built as you read this.

TRIG™ Project

Demonstration & Project Information

TRIG Demonstration Unit at Wilsonville, Alabama, USA

KBR and Southern Company developed TRIG™ and related systems for commercial implementation of power, chemicals and fuels applications in conjunction with the DOE at the Power Systems Development Facility (PSDF) in Wilsonville, Alabama, USA. The PSDF is an engineering-scale demonstration of TRIG™ and associated critical subsystems.

The operational experience gained by KBR and our partners at the demonstration unit is the basis of a planned, full-scale, commercial implementation of TRIG™ technology to produce 600 MWe power in Mississippi, USA. The IGCC project for Mississippi Power is based on lignite coal gasification and will employ two KBR TRIG™ gasifiers operating in air-blown mode to produce clean coal energy.

Energy Partners Plans for Mississippi

Mississippi Lignite Coal Plant

Transport Inergrated Gasification Art

America eagerly seeks new energy technologies to make us independent.  The Southern Company, the parent company of Mississippi Power, in cooperation with the Department of Energy have been trying to develop a cleaner, possibly less expensive, and more dependable methods of producing power from coal.  The result of some of this research is gasification. According to the Mississippi power website this technology was developed at the Power Systems Development Facility (PSDF) in Alabama.

The gasification of coal breaks down coal into chemical components which can be burned and used to fuel power plants using a fancy term called, ” Integrated Gasification Combined Cycle technology (IGCC) “ unfortunately there is an undesirable environmental impact.

Southern Company partnered with KBR (much more on this company later) and further developed the technology to use a low quality mushy coal called lignite.  It is said that Lignite is abundant in Kemper County, Mississippi so construction has begun taking advantage of the geographically close fuel source, Lignite, to reduce logistic transportation costs.  That’s prudent.

  • (T R I G ™) Transport Integrated Gasification utilizes a low grade lignite coal burning method that will be used at the IGCC facility in Kemper County Mississippi.  We understand they will be testing the effectiveness of the cleaning of emissions of nitrogen oxides, sulfur dioxide, mercury, and other dangerous elements some of which may be unexpected.

The Kemper County Coal Power Plant project appears to be in full cooperation with and DEPENDANT  upon the Al Gore global warming agenda, the Environmental Protection Agency (EPA), Cap and Trade, and the redistribution of wealth.  A carbon dioxide capturing device was incorporated into the lignite coal burning process. Carbon dioxide is the gas that sustains human lives and is required in the process of photosynthesis to maintain the life of plants. The EPA determined carbon dioxide is poisonous needing regulation.  Is it ridiculous for Mississippi to jump into compliance to these progressive money grabbing scams?  Does someone believe we are getting into the bottom floor of a pyramid scheme?

The Kemper County Plant is fully preparing for carbon dioxide to be regulated by government entities by investing rate payers monies (that means most of you in Mississippi)  into this brand-new energy plant utilizing brand-new never used to scale technology.   The risk of budgeting failure  without costly changes is certain and it is reasonable to expect the new technology will need costly adjustments following the testing in China, 2012. Risk is clearly documented, noted, and white-washed for the trusting silent Mississippians.

It has also come to our attention that some of the current coal burning plants in Mississippi will be fitted with scrubbers to improve the removal process of harmful toxins and to meet or exceed environmental standards. That seems reasonable and efficient but what you have not been told is some plants may be closed as a result of Kemper Power plant.  That equals lost jobs in Mississippi.

Americans optimistically look to the future for environmentally safer and economically sound methods of producing electricity.  Developing and correcting these new technologies directly out of pockets of unsuspecting Mississippians labeled as a power bill is unethical.

SOUTHERN COMPANY 2010 SUMMARY ANNUAL REPORT

SOUTHERN COMPANY 2010 SUMMARY ANNUAL REPORT.

“Our research and development team – the nation’s most comprehensive in-house function of its kind among regulated utilities – has spent years developing a process called Transport Integrated Gasification (TRIG), which produces energy by converting low-grade coals, such as lignite, into a synthesis gas. In 2012, that technology is set to make its commercial debut in China, a nation better known for exporting, rather than importing, innovation.”

The Technology for the Kemper County Coal plant is not fully proven and has never been utilized in a commercial setting.  Our concern is that the cost of unpredictable expenditures could be endless passing the cost onto ratepayers will cripple Mississippi.  A request to expand the costs with an explanation can be sent to the PSC for approval.  Simple procedure.  The caps of 2.2 billion expanded to 2.88 billion have been quoted to the public as being a cap.  These quotes are not firm and appear to give a false sense of security.   There is no final cap to the cost the ratepayers will be responsible for so far as we have read in the legal documents.

 

http://bcove.me/hbq7nisu

 

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