The 3-4 Billion Dollar Kemper “Clean Coal” Power Plant
By Thomas Baldwin, Biloxi, MS
February 4, 2013
Definition: Corporate Fascism (or Corporatism) is a term usually attributed to Benito Mussolini in Italy from the 1930’s and is otherwise just described as Fascism. It implies the merger of corporate power with that of the “state” or the government. Now we often dismiss that as just “lobbying” but in the past it has also been associated with “bribery.” In short Fascism is total control of the people by corporate influence which is not in anyone’s benefit except the corporate power. America is becoming a Corporatist nation.
PURPOSE OF ESSAY:
It is my purpose to illustrate a specific example of this practice in the State of Mississippi. This will be just one important illustration of this subject but will be specific to something which is imminent and critical in the State of Mississippi (MS). The focus will be the MS Power/Southern Co. Kemper Coal Power Plant. Though this may seem to be insignificant to many who are not familiar with it, let me put it in perspective.
HISTORY: First the Kemper Coal Plant was presented as a “Clean Coal” electricity generating plant at an initial cost of about 2 billion dollars and to represent state of the art technology in converting coal to gas with the purpose of generating electricity. It would use lignite coal in MS (the lowest heat content, dirtiest coal available) and convert it to gas to drive the turbines and generate electrical power. It had been tested on a much smaller scale in AL by the Southern Co. with money made available by the federal Department of Energy for those experiments. When the opportunity to do “clean coal” became available to expand that commercially, the Southern Co. jumped forward and said “let us do it.” They tried to sell it to the State of Florida but the state said no thanks. Then Governor Barbour of MS stepped up and said “we’ll do it in MS.” About 300 million dollars in federal funds was made available and the promise of loan guarantees.
But no private sources wanted to invest in this risky idea with Southern. So Mr. Barbour, who had been a lobbyist for the Southern Co. prior to his becoming Governor of MS in 2003, said “I’ll arrange for a way to do it.” A law has just passed in the state legislature in 2008 to allow the Public Service Commission to permit public utilities such as MS Power Co. to charge the entire costs of construction of this monstrosity to the ratepayers in their district whether the plant generated electricity or not! It is referred to as the “Baseload Act”. Also the Southern Co. (MS Power’s parent) could benefit from selling their technology all over the world. Now that’s a sweetheart deal, huh? The magnitude of this project was much bigger than the sales or assets of MS Power (about a billion) and nearly equivalent to about 60% of the annual budget of the State of MS.
THE SIERRA CLUB INVOLVEMENT:
The Sierra Club of MS under the able leadership of its director, Louie Miller, attempted to intervene and challenge this scheme almost from the start. The Sierra Club has been immensely successful in their challenges through the courts, not simply based upon environmental reasons, but from the false representations of the MS Power Co. and the complicity of two of the three members of the Public Service Commission (PSC), Leonard Bentz and Lynn Posey. The commercialization of the technology had not been proven; it was much more expensive than alternatives; and it would be destructive to the environment.
But also, the MS Supreme Court in early 2012 by a record 9-0 decision ruled decided that the decision the PSC had made by a 2-1 vote to approve the plant costs from 2.44 billion to 2.88 billion was improper and thus placed the license to continue in doubt.
But MS Power Co. and the PSC have persisted and ignored the MS Supreme Court’s decision and they agreed in a previously unannounced meeting on January 24, 2013 to approve an agreement which allowed MS Power to proceed with construction and present rate increases to pay for the plant at the limit of 2.44 billion. And MS Power had a plan to pay for the increased
Photo: Southern MS citizens visit the Supreme Court Hearing on 1/28/13 (by John Tuepker)
costs by presenting legislation to allow for bonds to pay additional cost overruns which were now obvious. Needless to say, their stockholder investors were not about to pay for this! The MS Supreme Court had scheduled previously a case only four days later on January 28 to consider a challenge to the Constitutionality of the original 2008 Baseload Act bill. This was the legislative bill which allowed a utility to be able to charge ratepayers for “Work Construction in Progress” which was MS Power’s intent by increasing ratepayers monthly rates.
THE RESPONSE OF MS POWER AND THE PSC: Simultaneously, on January 21, 2013, there were two identical bills introduced in both branches of the state legislature: SB2755 and HB1134. Those copies can be seen at these links and as one can see they are IDENTICAL.
They were sponsored by Senator Burton in the Senate and Representative Beckett in the House, chairmen of the Senate Energy and the House Public Utilities committees, respectively. Would anyone dare to guess who wrote those bills for them? Would anyone like to guess what they might have been offered to be sole sponsors of those bills simultaneously and urge quick passage? The purpose of these bills was to offer bonding authority for up to one billion additional dollars to pay for cost overruns which were predicted in the beginning for the Kemper Coal Plant boondoggle and debacle. Would anyone like to guess why the executives at MS Power and the Southern Co. thought these were important? Clue: Their investors and stockholders are not going to be happy if this piece of crap bombs which is highly likely! The jobs of the CEO and their subordinates of the Southern Co. and the MS Power Co. are on the line. The fact that they could not get private investors in the beginning should have also been a clue. In effect, the MS Power/Southern Co. are trying to shift all of the risk of this boondoggle to the ratepayers and the taxpayers!
Folks, the MS Power Co./Southern Co. may succeed in their financial efforts in the short term, but they will soon be fully disclosed. It’s a complicated web of deceit and manipulation by a corporation over a corrupt state government but when examined in detail it’s pretty simple. It is the essence of corporate fascism which we face all over the country and MS is a great example due to the example set by former Governor Haley Barbour and the fact that we are the poorest state in the nation as well as least informed.
If many people continue to remain silent about this atrocity, then you should just be ready to put on your high boots and say “Seig Heil” when you pay your electricity bill in Mississippi!!
Postscript–As this blog was about to be published this Letter to the Editor was published in the Sun Herald newspaper:
Julia O’Neal: Legislators bowing to Southern Company.
And this excellent report on the current status of this fiasco by Eileen O’Grady appeared in the January 31 edition of Reuters.
About the author; Thomas Baldwin, Ph.D. has a doctorate in Physics and a Masters degree in Management. He has had long careers in both physics and management consulting including university appointments as a professor both at the Southern Illinois University and Colorado Technical University. He has been a corporate consultant to many well known large firms in project management and is current “officially” retired. In the last four years or more he has been focusing on applying his skills to better understand the political sector including socioeconomic conditions which are affecting our welfare and basic economic health. He can be reached at firstname.lastname@example.org