How Corporatism Works in Mississippi to Enslave and Bankrupt its Citizens–Exhibit I: The Kemper Coal Plant

In what will turn out to be a series of blog posts, I intend to present concrete evidence that major corporations with key elected officials are attempting to exploit the poorest state in the nation by expanding their businesses at our expense!  The MS Power Co. (owned by the Southern Co. of GA) is Exhibit I.  In this case, they are trying to force the ratepayers to pay the full cost of their construction of the experimental, dirty coal plant in Kemper County which will amount to a total cost of nearly $16,000 per ratepayer and/or nearly $1000 for every woman and child in the State of MS.— Dr. Tom  Baldwin, Biloxi, MS


Chu-Backed Coal Plant Faces Tough Questions


March 19, 2012 8:59 AM EDT

(This story is reproduced verbatim with some underscoring.)

The Mississippi Supreme Court is questioning the high costs local citizens face for building an innovative carbon-capture coal plant that has been the subject of financial support and personal intervention from former Gov. Haley Barbour and Energy Secretary Steven Chu.

On Thursday the Mississippi Supreme Court ruled that the local public utility commission needs to back up its unusual decision allowing Mississippi Power Co. (owned by Southern Co.) to charge customers for the construction of a $2.88 billion coal-fired power plant while it is being built.

The Mississippi Public Service Commission made that decision only after Southern Co. said it would have to halt the project for lack of funding. At that point, Chu jumped into the fray, finding himself the unlikely bedfellow of Barbour, the former chairman of the Republican National Committee.

The project is of national importance “because it provides a viable option for using our abundant coal resources in a cost-effective and clean manner and for reducing power plant emissions,” Chu said in a May 19, 2010, letter to Northern District Commissioner Brandon Presley. He said reliance on coal is important to national security and in that sense the plant could help protect the country from volatile and unstable international energy markets.

When complete, the 582 megawatt coal-fired power plant would capture around 65 percent of its carbon dioxide emissions and use that CO2 in oil drilling projects elsewhere in the state.

And in the letter Chu also tugged on a couple of purse strings: He noted that more than $400 million has already been invested by DOE and Southern Co. for technology used at the plant. And if the project was delayed, Chu said he may have to reallocate $270 million of DOE direct funding for the project. And he warned any delay would also put $412 million of investment tax credits authorized by congress “in jeopardy.” It could also affect Mississippi Power Co.’s credit rating, he said.

The viability of commercial scale carbon capture and sequestration is key to the Obama administration’s plans to limit greenhouse gas emissions at new power plants. (Currently holed up at the White House is a rule to require that new power plants hold a line on carbon dioxide emissions similar to those from a natural gas-fired plant.)

“Without the Kemper County Project, DOE may not have the opportunity to demonstrate this technology and make it available for the cost-effective use of low rank coals for power generation,” Chu wrote.

So whether the Kemper County project is even remotely cost-effective speaks at the very least to the perception of whether carbon capture is actually an “available” technology.

“There’s a certain chicken-egg problem,” said John Thompson, director of the fossil transition project for the Clean Air Task Force. “There’s limited deployment of the technology until the rules come out. And it’s always hard to get the rule to come out until there’s more technology out there.”

The reality of the coal-fired power business is that carbon capture and sequestration is not yet operating at commercial scale, and given the current low price of natural gas, it is in comparison exorbitantly expensive.

And that high price tag falls, generally, only to local power customers who often have no choice in where they draw their power.

“I’m not going to try to prejudge what the public service commission is going to decide … what is fair for Mississippi,” Thompson said, while noting that the project is of global significance.

The Sierra Club, however, is hopeful things will swing in the other direction. The environmental group has been fighting the project and called Thursday’s ruling “a major blow to the dirty, expensive and unnecessary proposed Kemper coal plant project,” saying the technology is “expensive and untested.”

Louie Miller, the director of the Mississippi chapter of the Sierra Club, said that the change-of-heart by two of three commissioners was due to outside pressure from Southern Co. and Chu.

“They came back and gave them another $488 million on top of the $2.4 billion” and also allowed the company to draw reimbursement before the plant is online, Miller said. Traditionally, “all the risk is borne by the Fortune 500 Corporation and the stockholders.”

But the commission was under extreme pressure from “the Secretary of Energy [who was] sending very forcefully worded letters … to our Podunk public service commission to reconsider their vote” and from then-governor Barbour, who has strong lobbying ties to Southern Co., Miller said.

Barbour has charged that the project is important for Mississippi and the nation’s energy future and spoke at the project’s groundbreaking. And Miller charges that DOE went barreling forward with the project without carefully considering the federal investment or whether the permit would even be finalized at the plant.

Commissioner Brandon Presley, the lone-dissenter on the three-man panel , was thrilled with the 9-0 decision by the Mississippi Supreme Court, saying in a statement Thursday that it “deals a serious blow to the company’s corporate socialism.”

“In this case, Mississippi Power Co. gave new meaning to the phrase ‘We got the gold mine, they got the shaft,’” he said, arguing that the company is hiding rate impacts and mistreating customers who risk a 45 percent rate hike.

“I believe in ‘pay as you go,’ I just don’t believe you should pay BEFORE you go,” Presley’s statement said.

The Mississippi Supreme Court only asked the commission to provide more evidence to the record for its decision, and to that end, Mississippi Power is confident nothing will change, said company spokesman Jeff Shepard.

Southern Co. spokeswoman Stephanie Kirijan said the company “will work closely with the commission to resolve the issues raised by the Supreme Court.”

So far, she said, the project has received $245 million from DOE and is awaiting $25 million more “following commercial operation.”


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