Clean coal image 1--schoolsThe blog focuses on several articles which have been published in the last two months on what I have come to call, “The Great Kemper “Clean Coal” Debacle.   It has been called other names like a “boondoggle”, a scam, a theft, etc.  But it is going to be an impending disaster for the State of Mississippi and I give that at least an 80% probability.  It will take a miracle for that to change.

But it is also a prime example of Corporate Fascism at work.  That’s when a corporation or a group of corporations also “merge” with the government and take control.  In this case, the primary culprit is the Southern Co. which is the owner of Miss. Power.  What they have tried to do is to buy the executive and legislative branches of the Mississippi Government, and its agencies, to authorize a totally unwise expenditure and charge it to the citizenry (rate payers) even before there is ample proof that this is prudent. And Miss. Power is, of course, a regulated monopoly.  Have you ever tried to buy your electricity from another supplier?   It is not unlike being controlled by a mafia ring and  the primary mafioso members are the CEO of the Southern Co. Tom Fanniing and the CEO of Miss. Power, Ed Day.

The way corporate fascism succeeds is that it also gains control of the media.  In this case, Miss. Power has shown clearly that it has control of the Sun Herald, the major newspaper in So. MS and WLOX, the major TV station. How does that work?  It’s simple;  you just fork over the dollars.  It’s exactly the way they have worked with the executive and legislative branches.

These articles are from the “alternate”, non corporate media for the most part though there are other publications outside of So. MS which have also made reports.  I have focused on two outstanding publications, Emmerich Newspapers (Northside Sun) and a blog site, Bigger Pie Forum.  These two are fearless in this matter and present objective views of what is happening even though the environmental aspects of this enormous debacle are not adequately presented.  Why won’t these articles appear locally?  Because of what I said in the paragraph above! It’s basically the same reason they won’t touch the blogs I have been writing for at least 18 months or even some “Letters to the Editors”.

Thomas Baldwin,  Biloxi, MS


Court rules in favor of Bigger Pie public records request

Complete article: http://www.biggerpieforum.org/blog/court-rules-favor-bigger-pie-public-records-request 

Posted by Amy McCullough on April 19, 2013

UPDATE APRIL 22: Hearing on Bigger Pie Forum’s contempt motion is 9 a.m. tomorrow, April 23 in Hinds County Chancery Court, 316 S. President St., Jackson, Miss. in Judge Dewayne Thomas’ court room.


Hinds County Chancery Court has ruled that the Mississippi Public Service Commission must give Bigger Pie Forum records related to the Kemper County clean coal plant.

>> Read the judge’s order here.

The Mississippi Public Service Commission has failed to comply with the order from Chancellor Dewayne Thomas.

In July 2012, Bigger Pie Forum filed a public records request with the Commission requesting records containing Mississippi Power Company’s 2009 natural gas price forecasts that were used to economically justify the company’s $3-billion clean coal plant under construction in Kemper County. The case was heard in September.

Miss. Public Service Commission fails to comply with court order



Cost of Kemper power plant keeps growing

Wyatt Emerich photoFROM THE DELTA DEMOCRAT TIMES—4-21-2013

Wyatt Emmerich

Posted: Sunday, April 21, 2013 12:00 am

While Mississippi Power was building the $4 billion Kemper coal plant, Entergy bought a natural gas plant for $250 million — one twelfth the cost per kilowatt. 

Last year, South Mississippi Electric Power Association purchased an 837 megawatt 12-year-old gas plant in Batesville for $286 million. Per kilowatt, the Kemper plant is 19 times more expensive than the Batesville gas plant.

Natural gas plants are proven technology. The Kemper lignite gasification plant uses a new technology that has never been applied on a commercial scale. 

Mississippi Power and its regulatory agency, the Mississippi Public Service Commission, have made a huge bet that natural gas priceswill rise. So far, the opposite has happened. This bad decision could cost 356,000 households in our state an extra $580 a year on their power bill. If Kemper doesn’t meet its rosy operating projections, the price tag could easily be a thousand dollars per household per year. 

According to its 2011 annual report, Mississippi Power has 3.2 gigawatts, of generating capacity without Kemper. The average daily need is 1.7 gigawatts and the all-time peak is 2.9. In addition, Mississippi Power can always buy electricity from other power plants for less than it costs to produce from its own plants. So why was Kemper needed?  Mississippi Power states in its annual report that its old coal plants can be retrofitted with scrubbers for $330 million and be EPA compliant. Why not do that instead?

Continued at link posted  above and here:




 Mississippi’s PSC is not looking out for Mississippians

By Wyatt Emmerich,

President, Northside Sun Newspaper

I attended my first Public Service Commission (PSC) hearing last week. I was not impressed.

Because power companies have monopolies, the PSC Is there to protect the consumer. But that’s not what I witnessed. Instead, PSC commissioner Leonard Bentz seemed irritated at some of the citizens who showed up to protest the new rate hikes precipitated by the new $3.7 billion Kemper lignite plant.

Bentz started the meeting by complaining about “misinformation” published by various reporters and columnists. I guess that includes me.

During a break, I approached Bentz, gave him my card and told him I would be happy to meet with him to straighten out any misinformation. I was not warmly received.

I can certainly understand the pressure Bentz feels. It would make me testy as well. But what about the 300,000 or so utility customers who will soon see a 25 percent increase in their utility bills?

Bentz takes issue with Sierra Club reports indicating rates will eventually go up 60 percent or more. He pointed out that the rate increase is 25 percent, not 60 percent. Regarding this first rate increase, he is correct. But who said this will be the last? It could well be the first of many.

The question is, why are rates going up at all? As a businessman, I buy new equipment to lower my cost of production, not raise it. I don’t recall any brownouts in Southeast Mississippi. So why was this plant built in the first place?

The tab for the new plant is $3.7 billion and rising rapidly. The total number of customers served by the plant is about 300,000 – about a fourth of the state. That comes to $12,000 per utility customer on average. The interest and principal to pay that off over 20 years could easily top $1,000 per year per customer. That’s why tensions are running high. …

The Southern Company will be looking to its Mississippi customers to pay for the cost of the plant, sooner or later.

There is something very wrong when a company making $3.75 billion in operating profit can force utility customers in the poorest state to pay for an experimental $3.7 billion power plant that isn’t even needed. …

A full-scale natural gas plant would have cost one-sixth as much and produced 50 percent more electricity.

Any private company would have pulled the plug long ago. But that’s not how it works in the world of a regulated monopoly. Instead, the Southern Company will spend millions to lobby influential government officials and make Mississippi’s families swallow a huge increase in their monthly power bills. This is the very thing the PSC was designed to prevent. Instead, the commission is enabling it. …

I have written about this misguided project for years now. Never once has anyone from Southern or the PSC disputed my facts or attempted to show me the light. I hope to meet with Southern Company officials in the near future and visit the plant. Nothing would make me happier than to discover I am completely wrong, for I feel sad that this economic albatross is going to be around the neck of my beloved state for the next 40 years. This is 72 times the size of the beef plant.

I recall taking a government course in college about how regulatory agencies end up getting cooped and manipulated by the very industries they are supposed to regulate. As far as I can tell, this is precisely what has happened here. Monopolies are simply bad for society. Don’t try to regulate them. Break them up and allow consumers choice. Given a choice of electricity providers, I seriously doubt many Mississippi utility customers would have chosen the one with the highest price – even if it is bleeding edge technology.

A longer version of this editorial appeared in the Northside Sun and other newspapers. Read the full version here.

Wyatt Emmerich can be reached at wyatt@northsidesun.com



The Kemper coal plant will have everyday high-priced electricity

By Ashby M. Foote III
Bigger Pie Forum board president

This is an excerpt from the full version of this editorial which ran in The Clarion-Ledger on March 30, 2013.

You may have missed it but Mississippi Power (MP), the electric utility serving 23 counties in Southeast Mississippi, recently posted a blockbuster 57% increase in earnings for 2012. Headlines for this newsworthy item were hard to find, one had to dig to page II-359 ofSouthern Company’s (MP’s parent company) annual 10K filing with the S.E.C. to find the report. So just how good was 57% earnings growth in the lackluster economy of 2012? It was better than 95% of the companies in the S&P 500 index and better than all but one of the 33 U.S. publicly traded electric utilities. Or consider the premier growth company Wal-Mart, in 2012 they grew earnings by just 12% on sales growth of 5%. In short, +57% is the type profit growth that keeps Wall Street types drooling.

Even more amazing is that MP achieved this $54 million increase in profits in a year where they sold fewer kilowatt hours (kWh) and saw total revenues fall by 6.9%. Huh? Anyone who has ever run a lemonade stand is probably asking, “How do you increase profits by $54 million when production and sales are declining?” That is an important question. (Continued at link above)



Kemper coal plant will cost our state thousands of jobs

By Rich Sun 

Over the course of a 40-year career in banking and investing, I have rarely seen a project that makes less sense than the lignite mine and gasification plant under construction in Kemper County by Mississippi Power Company, a wholly owned subsidiary of Southern Company. From the estimates compiled by the Bigger Pie Forum and their engineering consultants, it appears that the gasifier and mine impose about $300 million of unnecessary excess annual costs on the 185,000 families and businesses in the Mississippi Power Company service area, compared to building a standard gas-fired generating plant.

The $300 million is an estimate by outsiders without access to Mississippi Power’s detailed estimates. The actual excess will vary with gas prices, and Kemper’s operating costs and efficiencies ….. Mississippi Power has been unusually opaque in its filings; many of its filings have been confidential and available only to the Public Service Commission and staff. The recent Special Purpose Entity (shell company) bond financing signed by the governor may reduce financing costs by a fraction, but is a bailout of Mississippi Power cost overruns beyond what had been approved by the PSC.

One thing is clear: At the time when Mississippi Power committed to build the mine and gasifier and ever since then, all public independent forecasts of gas prices have shown the mine and gasifier more expensive by far.

Southern has given several reasons for building Kemper; on close examination, none of them appears to justify the excess cost.

Higher taxes paid by Mississippi Power: Southern states that Kemper increases the tax base and tax receipts to the state and local governments from Mississippi Power. All those taxes are paid from ratepayers’ electricity bills.

The portion of construction and operating costs of Kemper that are necessary and prudent – the cost of the turbine electric generator (probably under $1 billion) – increase tax receipts reasonably. Mississippi residents will pay $300 million a year in higher electricity rates for Mississippi Power Company to recover the excess construction costs of the mine and gasifier ($3.8 billion versus $1 billion or less), the operating costs of the mine and gasifier and the taxes on both capital and operating costs.

If I sell you a dollar’s worth of goods for two dollars, you lose the extra dollar and sales tax on the extra dollar. How do you feel about the taxes on the overcharge? That is how you should feel about most of the increase in taxes Southern claims from Kemper.

Jobs: Southern Company has identified about three percent of its shareholders as Mississippi residents (there may be more since some registrations are in “street name”) and a portion of the cost will be spent locally. In any case, the vast majority of that $300 million is going out of state and will be a massive drain on the local economy.

The Kemper plant will employ about 250 workers when in operation, some of whom will be high-skilled workers from out of state. We estimate that job loss in the service area from the $300 million of excess electricity cost could be 5,000 to 15,000 jobs. Using an annual cost per employee of $60,000 (a high number) gives the 5,000 estimate; using the typical multiplier from the primary jobs (and perhaps lower costs per job) produces the 15,000 jobs lost.

So Mississippi gets 250 jobs at Kemper and loses 5,000 to 15,000 jobs: how is that good for Mississippi?

Natural gas price risk: Mississippi Power says building Kemper protects ratepayers from the price volatility of natural gas. Gas does vary in price. But if the cost of power from gas is always lower than from lignite, why pay for lignite?

Southern had the option to start construction of the mine and gasifier at Kemper if natural gas rose enough beyond the forecast levels to make the mine and gasifier economic. There was no need to build it immediately. Hedges could have reduced price increases during the construction period

If Kemper is such a bad idea, why aren’t businesses and local leaders speaking out against Kemper?

First, Mississippi Power has run a superficially effective public relations campaign, including heavy lobbying, commercials and multiple four-color full-page ads touting Kemper’s benefits – citing jobs, taxes and price stability, but has never documented any lower cost electricity compared to building a standard gas fired generating plant.

Second, because utilities usually pass through only legitimate costs, as reviewed and confirmed by the regulators, the business community does not look closely at utilities.

Third, the relevant facts and analysis were not available until recently.

Very few, if any, senior executives of well-run companies would approve a project like Kemper; the risk to their finances and reputation from the high operating and capital costs, and unproven technology would be far too great. They are experts in their own businesses, not so in electrical generation. 

Rich Sun, a Northsider, was an investment banker with Credit Suisse, Goldman Sachs, UBS and an investor with a global private equity firm backed by the World Bank, AIG, GE and Singapore. He arranged, advised or invested in 100 private transactions valued at over $11 billion, 60 percent of which were in the energy sector. Since 2001, he has been engaged in backing early-stage, high-potential companies.


Bigger Pie Forum is a discussion platform. Views expressed in this column are the opinions of the author and are not official opinions of the Bigger Pie Forum board or employees. Articles published in February-April 2013.


Blog posts in kemper


UPDATE APRIL 22: Hearing on Bigger Pie Forum’s contempt motion is 9 a.m. tomorrow, April 23 in Hinds County Chancery Court, 316 S. President St., Jackson, Miss. in Judge Dewayne Thomas’ court room….

Posted by: Amy McCullough on April 19, 2013

Bigger Pie Q&A with Rickey Cole

Rickey Coal is the chairman of Mississippi’s Democratic Party. He is a native of Ovett, Miss. in Southeast Jones County, which…

Posted by: Amy McCullough on April 16, 2013

Bigger Pie Forum Q&A with Clarke Reed

Clarke Reed is one of the founding fathers of Mississippi’s modern Republican Party. Reed, 84, chaired the party for…

Posted by: Amy McCullough on March 28, 2013

State regulators voted to allow Mississippi Power Company to start charging customers for its clean coal power plant under construction in Kemper County, despite the fact the plant won’t be operational until 2014….

Posted by: Amy McCullough on March 6, 2013

Bigger Pie Forum board member, Dr. Charles Grayson, has written a few editorials regarding the Kemper County clean coal plant for the Bigger Pie Forum 

Posted by: Amy McCullough on March 4, 2013

Gov. Phil Bryant has signed two bills Mississippi Power says will allow them to raise rates to pay for the multibillion dollar Kemper County power plant project by about 25 percent, instead of the company…

Posted by: Amy McCullough on February 26, 2013

Public electric utilities, which are allowed monopoly status, are required by state law to provide reliable electricity to customers at the lowest cost possible. Utilities are regulated by the Mississippi Public…

Posted by: Amy McCullough on February 16, 2013

The Associated Press has reported that a bill that would give Mississippi Power Company another $1 billion to fund its Kemper County clean coal plant has been approved by the Senate and sent to Gov. Phil Bryant for a…

Posted by: Amy McCullough on February 14, 2013

The Associated Press has reported:

Mississippi House members have blessed a settlement between the Public Service Commission and Mississippi Power Co. over the…

Posted by: Amy McCullough on February 11, 2013

Senate Bill 2755, the “Mississippi Public Utility Rate Mitigation and Reduction Act,” and its companion,…

Posted by: Amy McCullough on February 4, 2013

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