Mississippi Allows MS Power Co to Continue Building Coal Plant

 Mississippi PSC Allows Southern Co (MS Power) to Continue Building Coal Plant

(Important reports from Reuters today, Friday, March 30, 2012 on MS PSC Hearing)

Compiled by Tom Baldwin,  Biloxi, MS on March 30, 2012

http://www.reuters.com/article/2012/03/30/idUSL2E8ETCUG20120330

Fri Mar 30, 2012 1:02pm EDT

* Commission says delaying plant not in public interest

* Utility has spent more than $1.1 billion so far

* Opponents argued there abundant natural gas

March 30 (Reuters) – Mississippi utility regulators on Friday issued a temporary certificate to allow a unit of Southern Co to continue building an $2.8 billion coal-gasification power plant in the state despite a court ruling that overturned the existing certificate issued in 2010.

With only two days meeting notice and no discussion, the Mississippi Public Service Commission voted 2-1 to allow Southern Co’s smallest utility, Mississippi Power, to keep building the 582-megawatt integrated gasification combined-cycle (IGCC) power plant in Kemper County, according to the commission order obtained by Reuters.

The order, supported by commissioner chairman Leonard Bentz and commissioner Lynn Posey, stated that the halting the project would lead to “unnecessary costs” that would cause substantial injury to the utility and its customers.

“The commission finds that avoiding unnecessary costs is in the public interest; and that allowing the Kemper Project to proceed at this stage serves the public interest,” the order states.

Commissioner Brandon Presley who has consistently opposed the Kemper project for its high price tag and untried technology called the action to issue a temporary certificate “squarely contrary to state law.”

In a dissenting opinion, Presley said the order “totally misinterprets” the state statute “to Mississippi Power’s advantage and to the detriment of MPC’s customers.”

“It’s an absolute bailout of Mississippi Power,” said Louie Miller, director of the Sierra Club in Mississippi which successfully challenged the Kemper certificate in state court.

Miller suggested that Mississippi Power customers would be better served if the plant were converted to run natural gas rather than lignite as gas prices have fallen dramatically since Kemper County was proposed several years ago.

According to state filings, Mississippi Power has spent more than $1.1 billion on the Kemper County IGCC plant so far. It is expected to begin producing power in 2014. The utility has less than 200,000 customers.

The Kemper certificate, issued by the PSC in May 2010, was thrown into doubt earlier this month when the Mississippi Supreme Court ruled 9-0 that the commission failed to show evidence that the plant would benefit the utility’s customers as required by state law. The court sent the case back to the PSC.

Mississippi Power did not immediately respond to a call for comment on Friday.

Kemper opponents, including independent power producers, said Mississippi Power could only justify customer savings by using a long-term, high-priced gas scenario that did not take into account the abundant supply of gas from shale-rock formations.

IGCC technology heats coal to convert it into a synthesis gas that is processed to remove numerous pollutants before being sent to a traditional combined-cycle power plant to produce electricity.

Kemper was designed to showcase a gasification technology developed by Southern Co to burn Mississippi lignite and had support from state economic development groups and then-Governor Haley Barbour.

Click here to obtain a link to Brandon Presley’s dissent to the majority opinion.  http://www.psc.state.ms.us/commissioners/northern/press%20releases/2012/Presley%20Issues%20Statement%20On%20Kemper%20Vote%20Today%2003-30-2012.pdf 

_________________________________________________________

Reuter’s Notes received via email on Friday, March 30 by Louie Miller, MS Director, Sierra Club

16:39 30Mar12 RTRS-UPDATE 1-Mississippi allows Southern Co to keep building $2.8 bln coal plant

    * Utility says delay could cost $250 mln-$500 mln

   * Sierra Club appeals commission order late Friday

   * Dissenting commissioner says action contrary to state law

(Adds court appeal, comment)

   By Eileen O’Grady 

   March 30 (Reuters) – Mississippi utility regulators on Friday voted to allow a unit of Southern Co <SO.N> to continue building an $2.8 billion coal-gasification power plant in the state despite a court ruling that overturned the existing certificate issued two years ago.   

   With only two days meeting notice and no discussion, the Mississippi Public Service Commission (PSC) voted 2-1 to issue a temporary certificate so that Southern Co’s smallest utility, Mississippi Power, can keep building the 582-megawatt integrated gasification combined-cycle (IGCC) power plant in Kemper County, according to the commission order.  

   The Sierra Club, which successfully challenged the Kemper IGCC project, immediately filed an appeal at the Mississippi Supreme Court to block the certificate.  

    The PSC order, supported by commissioner chairman Leonard Bentz and commissioner Lynn Posey, stated that the halting the project would lead to “unnecessary costs” that would cause substantial injury to the utility and its customers.    

    According to a state filing, Mississippi Power said interrupting construction at the Kemper site could cost between $250 million and $500 million. 

   ”Any delays to this project would mean significant costs to our customers,” said Jeff Shepard, Mississippi Power spokesman in a release. “Today’s ruling means we can continue building a sound energy future for our customers.” 

    The Kemper certificate, issued by the PSC in May 2010, was thrown into doubt earlier this month when the Mississippi Supreme Court ruled 9-0 that the commission failed to show evidence that the plant would benefit the utility’s customers as required by state law. The court sent the case back to the PSC. [ID:nL2E8EGETM]    

   Commissioner Brandon Presley who has consistently opposed the Kemper project for its high price tag and untried technology called Friday’s action to issue a temporary certificate “squarely contrary to state law.”    

    In his dissent, Presley said the order “totally misinterprets” the state statute “to Mississippi Power’s advantage and to the detriment of MPC’s customers.”  

   ”There is no way allowing construction to continue at Kemper is a temporary act,” Presley told Reuters. “Nobody with any sense would argue that. It’s not what the law says.”  

   Bentz who represents most Mississippi Power customers in the southeast corner of the state, declined to comment through a spokeswoman while Posey, who represents Kemper County in central Mississippi, could not be reached late Friday. 

   ”It’s an absolute bailout of Mississippi Power,” said Louie Miller, director of the Sierra Club in Mississippi.  

   In its appeal filed after Friday’s meeting, the Sierra Club asked the Supreme Court to rule that “Mississippi Power is not exempt from the law, and the Public Service Commission does not have the authority to bypass state law, according to a statement.   

   Miller suggested that Mississippi Power customers would be better served if Mississippi Power converted the plant to run natural gas rather than lignite as gas prices have fallen dramatically since Kemper County was proposed several years ago. 

   According to state filings, Mississippi Power has spent more than $1.1 billion on the Kemper County IGCC plant and has committed to contracts valued at $1.5 billion. It is expected to begin producing power in 2014. The utility has less than 200,000 customers.   

   Kemper opponents, including independent power producers, said Mississippi Power could only justify customer savings by using a natural gas scenario that projected gas prices would rise from $11 per million British thermal units in 2014 to $22 per mmBtu in 2050.  

   U.S. gas prices are the lowest in a decade due to booming output from shale-rock formations.  [ID:nL2E8EU3JT] 

   IGCC technology heats coal to convert it into a synthesis gas that is processed to remove numerous pollutants before being sent to a traditional combined-cycle power plant to produce electricity.   

   Kemper was designed to showcase a gasification technology developed by another Southern Co subsidiary to burn Mississippi lignite and had support from state economic development groups and then-Governor Haley Barbour. 

 

(Reporting By Eileen O’Grady; Editing by Bob Burgdorfer and David Gregorio)  ((eileen.ogrady@thomsonreuters.com)(+1 713 210 8522)(Reuters Messaging:eileen.ogrady.reuters.come@reuters.net))

Keywords: UTILITIES SOUTHERN/KEMPER

 

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 Friday, 30 March 2012 16:39:12RTRS [nL2E8EUAHQ] {EN}ENDS

Eileen O’Grady
Houston Correspondent

Thomson Reuters

Office: 713 210 8522
Mobile:  281 691 4100

eileen.ogrady@thomsonreuters.com
thomsonreuters.com


This email was sent to you by Thomson Reuters, the global news and information company. Any views expressed in this message are those of the individual sender, except where the sender specifically states them to be the views of Thomson Reuters

Louie Miller

State Director

Sierra Club Mississippi

601-624-3503 (mobile)

louie.miller@sierraclub.org

 

 

 

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