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.”

Mississippi High Court Justices Seek Reasons why PSC Reversed Itself to allow Kemper Co. Coal Plant

JACKSON, Miss. — Three Mississippi Supreme Court justices asked repeatedly Wednesday where the state Public Service Commission laid out its reasoning when it modified its decision to allow the construction of a Kemper County power plant last year.

The Sierra Club is trying to get the Supreme Court to derail the $2.7 billion power plant, now under construction in Kemper County’s Liberty community. The environmental group argues the PSC broke the law by failing to lay out its reasoning clearly when it eased the financial terms under which Mississippi Power Co. could build what it calls Plant Ratcliffe.

A lawyer for Mississippi Power said the commission didn’t have to provide such reasoning, though. He said judges could find reasons to support the decision in the 30,000-plus pages of testimony and records submitted as part of the appeal.

Mississippi Power says rates will go up about 33 percent to pay for the plant. However, Sierra Club lawyer Robert Wiygul told the court Wednesday that confidential documents he has reviewed show rates would rise as much as 45 percent. The Mississippi Business Journal reported the same amount in August 2010, citing documents obtained through a public records request.

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 Sierra Club opposes the project, saying that the technology behind the plant is unproven and that it’s undesirable under any circumstances to build new coal mines and new coal-fired power plants. The environmental group says it would be cheaper for Mississippi Power to build a natural gas plant or buy power from independent natural gas generators.

“The law requires the Public Service Commission to choose the cheapest and most reliable technology and power plant,” Louie Miller, executive director of the Mississippi Sierra Club, said at a pre-hearing news conference. “This is neither.”

The PSC originally voted in April 2010 to cap at $2.4 billion the amount that Mississippi Power could charge ratepayers for the plant. The company is also getting about $300 million in federal assistance. 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.  (Previously suggested most corrupt in MS) Lawyer Ben Stone  said Wednesday that 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.

"Uncle Ben Stone", Haley Barbour, and Steven Palazzo

"Uncle Ben Stone", Haley Barbour, and Steven Palazzo

“We could not go to the financial markets without some relief in both of those areas and finance the plant,” Stone said.

If this scheme had any merit it could have found investors.  With a negative credit score and historical pattern of Lignite Coal plant failure, Investors know Mississippi Power and Southern Company’s Kemper Coal Plant is a money pit with no intention of making money. It will be fined, regulated with fees, and taxed right out of any possible profits.  Among other costs to run problems they will encounter.  The profit comes in when MS power can charge a percent of its overall costs to the ratepayers.  Criminal and truly un-American, isn’t it? 

 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. The commission must still agree that company spending is “prudent” for it to collect any money, even below $2.4 billion. It also allowed Mississippi Power to start charging before the plant’s scheduled start in 2014. Under state law, Mississippi Power can keep the money even if the plant is never completed.

It is not prudent to charge ratepayers for an experimental CO2 capturing mechanism that fails to produce any electricity, and  is founded on global warming science fraud, and a cap-and-trade system not yet in adopted. 

The key issue in Wednesday’s case is not whether the plant is a good idea, but whether the PSC adequately laid out its rationale for what Miller labeled a “flip-flop” by commissioners Leonard Bentz and Lynn Posey, who voted for the amended conditions.

The Sierra Club said the PSC didn’t adequately explain. “That’s going to require some evidence you can see and really get your arms around,” Wiygul said.

He said judges shouldn’t have to pick and choose reasons from the overflow of material submitted with the appeal, and the three justices sitting Wednesday seemed sympathetic to that argument.

“I did not see and still do not find anywhere where the commission explained to the court why this was now not too risky,” said Associate Justice Randy “Bubba” Pierce. “I want to know what happened between April 29 and May 26. What additional facts were submitted to the record?”

Stone said the new facts were contained in Mississippi Power’s motion to reconsider and its post-hearing briefs. “It’s very obvious to us that all those matters are supported,” he told the justices.

More importantly, though, he said the PSC was not required to summarize its reasoning for court review. Stone said that a prior court case says that as long as the court can find the reasoning in the record leading to the decision, the court must let the PSC’s decision stand.

JEFF AMY  Associated Press

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