Price per kilowatt of Kemper plant stretches credulity by Wyatt Emmerich

Wyatt nemmerich--photo 2Republished here by permission of Wyatt Emmerich.

By  Wyatt Emmerich (Published about October 3, 2013

The Kemper power plant is 20 times more expensive per kilowatt than five natural gas plants recently acquired by Entergy and the Tennessee Valley Authority (TVA).

Imagine being forced to pay $70 for a gallon of gas from a government-sanctioned monopoly. That’s Kemper, the most expensive construction project in the history of Mississippi.

Last month, TVA spent $400 million to purchase a 774-megawatt natural gas plant in Southhaven.

Compare this to Kemper, which has cost $5 billion for a 500-megawatt lignite plant.

Kemper is 50 percent less power for 10 times the money. No amount of spin can hide that.

TVA’s price per kilowatt was similar to Entergy’s 2012 purchase of two natural gas plants: a 450-megawatt plant here in Jackson for $246 million and a 620-megawatt plant in Hot Springs for $277 million.

In 2010, Entergy paid $300 million for a 580-megawatt natural gas power plant in Eunice, La. Last year, TVA paid $436 million for the 968-megawatt Magnolia gas plant in Benton County, Mississippi.

Kilowatts per dollar, the Kemper power plant is about 20 times more expensive than the five natural gas plants recently purchased by Entergy and TVA.

Paying 20 times more per kilowatt is bound to raise rates for the one-third of Mississippians who must buy electricity from Mississippi Power Company (MPC).

Already a 22-percent rate increase is being implemented. Many Kemper critics believe rates will eventually go up 60 percent.

Even before Kemper rate hikes are implemented, MPC rates are 40 percent higher than either TVA or Entergy. According to the federal government’s Energy Information Agency, Entergy charges $8.38 per kilowatt hour. TVA charges $7.90 and  Mississippi Power charges $11.40.

If Southern Company succeeds in getting Mississippi ratepayers to pay for Kemper, MPC rates could end up twice as high as Entergy or TVA rates. That’s an extra $500 million annual electricity tax on the residents of southeast Mississippi.

Kemper is being built by MPC, which is a wholly owned subsidiary of Atlanta-based Southern Company. Southern does $17 billion a year in sales, which makes it one of the biggest utility companies in the world.

MPC, Entergy and TVA all sell about a billion dollars a year of electricity in Mississippi. They do not compete against each other. Each has a monopoly on electricity in their section of the state.

The Republicans who have supported Kemper lockstep wouldn’t be caught dead raising taxes that much.  Yet a mandatory rate increase imposed by a monopoly works just like a tax. Kemper is basically a huge tax increase imposed by the Republican Party on one-third of the households of Mississippi.

State law 77-3-33 states: “No rate made, deposit or service charge demanded or received by any public utility shall exceed that which is just and reasonable.”

Unless MPC’s electricity has some special quality that makes it superior to TVA’s or Entergy’s electricity, then the numbers speak for themselves. MPC’s rates are not “just and reasonable” and should not be allowed.

The Public Service Commission (PSC) is supposed to be a watchdog agency to protect consumers and keep rates low. Instead, the PSC has become a governmental central planning commission and it’s doing about as well as all central planning commissions do.

Clarke Reed, one of the deans of the Mississippi Republican Party, is in a state of shock. He is working furiously to get the Republican leadership to stop this disaster. Reed worked for decades to bring Republicans to power in Mississippi. He sees Kemper wiping out his life’s work in one fell swoop.

It gets even worse: Natural gas is a proven technology. The Kemper plant is experimental. Lignite gasification has never been done in the history of the world. The Wall Street Journal recently did a feature story on the failure of gasification technology as an alternative energy.

Coal gasification has been around for decades. When Hitler ran out of gas at the end of World War II, he gasified coal.

Since then, coal gasification has never gotten off the runway. There are only two gasification plants in the world, both are much smaller than Kemper and use coal.

kemper plant--Sierra Club photo from webLignite has one-fifth the carbon content of coal, so gasifying lignite is even more of a challenge. It is, in essence, heavy wet dirt. Something in between coal and peat.

To gasify lignite, Southern has a new patented technology called TRIG, which has never been proven on an industrial scale. It has only worked in small-scale experiments, 100 times smaller than the Kemper plant. As an industrial rule of thumb, the maximum you can scale up experimental results to a manufacturing process is seven times. Past that, the unexpected results — like huge unanticipated cost overruns.

It gets even worse. Gasification is a chemical process. Southern has never built a chemical plant.

There’s an old saying: Pioneers get arrows in their backs. So far, that’s turning out to be true. The first cost estimate for Kemper was $1.2 billion. Now the cost is $5 billion and climbing. Southern just announced $500 million in cost overruns because they put in the wrong size pipe.

Given the incredible cost overruns, why anybody thinks this plant will meet its ambitious operation projections is a complete mystery to me. Not only has it cost 20 times more than a natural gas plant, I predict it will cost far more to operate year in and year out.

No bank would ever finance Kemper. So the Mississippi state Legislature, in its wisdom, passed “the baseload act” which allows Southern to raise residential electricity bills before the plant produces a single kilowatt.

Under the baseload act, Mississippi homeowners could be charged for Kemper even if it totally fails. That would be $25,000 per customer.

At the $25,000 per customer cost of Kemper, every one of Southern’s 186,000 customers could have installed rooftop solar panels and cut their electric bill in half. Instead, we have a 22-percent rate increase before the plant is even producing electricity.

This January the state Legislature allowed Southern to issue a billion dollars in bonds to pay for Kemper cost overruns. Securing those bonds are the homes of the ratepayers.

Tom Blanton, a Hattiesburg oil man, is outraged by this. He has spent thousands of his own money filing suit against Southern. His lawsuit argues the baseload act is a violation of the “takings clause” of the federal and state constitutions.

Blanton’s lawsuit asserts that the PSC only has the power to set the price of electricity. In Kemper’s case, ratepayers are being charged  for electricity they have yet to receive. You can’t just take somebody’s money without due process. The Mississippi Supreme Court will hear oral arguments this fall.

Two years ago, the Mississippi Supreme Court rescinded the Kemper construction permit stating there was not “substantial evidence” justifying its construction.  A few billion dollars more makes its justification presumably even more difficult.

Meanwhile, the pro-Kemper faction has mounted a PR blitz with radio ads blasting Kemper dissidents Kelley Williams and Ashby Foote.

The attack group is called JobKeeper Alliance. There is no way to trace the money behind it, but you can make a pretty good guess. We know JobKeeper is allied with the Alabama unions who want to protect their Kemper construction jobs.

Once Kemper is built those Alabama union members will be long gone while the bill will be with Mississippi ratepayers for the next 40 years.

It’s interesting to note the pro Kemper folks aren’t disputing the facts. Instead, they are attacking the messenger, Bigger Pie, saying it received state money over a decade ago.

So what? Lots of nonprofits get government grants. Nothing new or shocking there.

Bigger Pie is an offshoot of the Institute for Technology Development (ITD), which Williams heads. ITD is an independent non-profit with its own board. It can do what it wants. ITD is audited annually.

Fighting crony capitalism is a great cause and certainly one which will help Mississippi’s economic development. Excessive energy costs will stifle industrial development for years to come.

It is unprecedented for a $17-billion utility monopoly to mount a media attack against two private individuals. To claim Foote is in cahoots with the natural gas business because he’s a stockbroker is laughable, to say the least.

The professionals behind this media barrage are well known in Alabama circles for being “black ops” pros who employ vicious tactics. It’s a smokescreen. When you have no defense, try offense.

By exposing the Kemper boondoggle, Bigger Pie has already saved Mississippians a billion dollars. That’s how much of Kemper Southern has written off as a loss rather than pass along to the ratepayers.

Kemper will be built. Whether it can operate as designed is doubtful. Regardless, the full $5,000,000,000 cost of Kemper should be paid by Southern’s 500,000 shareholders, not Mississippi’s 186,000 ratepayers. There’s plenty of time and opportunity to do that if Mississippi’s Republican leaders have the best interest of our state at heart.

– See more at: http://www.northsidesun.com/content/price-kilowatt-kemper-plant-stretches-credulity#sthash.lbar4QmJ.dpuf

 

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PSC COMMISSIONER PRESLEY SLAMS MISS. POWER CO.

http://www.clarionledger.com/apps/pbcs.dll/article?AID=2013306040017  FROM THE CLARION LEDGER.COM

But project, he says, ‘past point of no return’

Jun. 3, 2013   4 Comments 

Written by Geoff Pender
  • Brandon Presley, Public Service Commissioner

Brandon Pressley 

 Public Service Commissioner Brandon Presley on Monday blasted Mississippi Power’s embattled and over-budget Kemper County coal plant, but noted the $4.3 billion project is “past the point of no return” and “too big to fail.” 

The decision has been made, and the train is on the track,” Northern District Commissioner Presley said. “I feel for those 185,000 customers on the Coast that are going to have to pay for this. Let’s hope it works.”

Presley spoke at the Stennis Institute of Government’s monthly press luncheon on Monday. Presley has often been the lone dissenting vote on the three-member commission as it has granted various approval for the “clean-coal” plant the company is building in Kemper County. The company had originally pledged to build the plant — much of which rate payers will finance — for $2.4 billion.

This is the greatest transfer of wealth from customers to a monopoly in the history of the state of Mississippi,” Presley said. “Where are all these so-called conservatives on that?”

The PSC this year approved a 15 percent rate increase for Mississippi Power customers to finance the plant, to be followed by a 3 percent increase next year. The company is expected to seek another 2 percent to 4 percent increase later.

Last month saw the abrupt departure of Mississippi Power’s president and a vice president shortly after the PSC learned documents about cost overruns were withheld. The company announced it was another $540 million over budget, but said shareholders of its parent, Southern Co. would cover those costs.

The state Legislature this year approved a bill allowing Mississippi Power to sell up to $1 billion in bonds for overruns.

Mississippi Power spokesman Jeff Shepard, in a written statement on Monday said: “Mississippi Power believes the Kemper County energy facility remains the best option to ensure clean, safe, reliable energy for our customers at a stable price for decades to come. … the company had a specific need for an additional baseload unit — a plant that runs 24 hours a day, seven days a week. … The project is a massive pioneer effort on the cutting edge of technology and is expected to offer significant long-term benefits to customers. We have worked hard to minimize the rate impact to our customers and we will continue to work with the PSC and provide any and all information they request as we continue the construction of this state-of-the-art facility.”

(Page 2 of 2) 

Presley said he is unchanged in his belief that the plant was too ambitious for the company, and the technology untried. But power company and other state officials have said Mississippi Power needs to diversify its sources of energy and not be too dependent on natural gas.

Duke Energy is building a similar plant in Indiana. That plant, too, has seen delays and cost overruns, inflating its price from $1.9 billion to $3.5 billion, part of which ratepayers will cover with their utility bills.

Presley said that early on, former Gov. Haley Barbour, Gov. Phil Bryant and other conservative state leaders lobbied hard for approval of the plant.

Elected officials were saying, ‘Please pass this plant,’” Presley said. “But then they’ve been lockjawed and mute on the impact it’s having on the family budget and the small business budget. … I am just blown away by so-called conservative groups saying it’s OK to raise people’s utility rates. If there was a 20-percent increase in property taxes, they would be marching in the streets.

What’s awful and outrageous is a senior citizen on the Coast having to split a pill in half so they can pay their power bill,” Presley said. “This is an area already hit by Katrina and the BP oil spill.”

They want their monopoly status, but don’t want any, any, any responsibility to the rate-paying public … If this was such a wonderful idea, why didn’t they go to Wall Street and get the money instead of asking little old ladies and small businesses to put up the money?”

 

RAMPANT CORPORATE FASCISM IN MISSISSIPPI WITH “THE GREAT KEMPER DEBACLE”

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

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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.

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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

https://proactvoice.wordpress.com/2013/04/22/cororate-fascism-in-ms-cost-of-kemper-power-plant-keeps-growing/

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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:

https://proactvoice.wordpress.com/2013/04/22/cororate-fascism-in-ms-cost-of-kemper-power-plant-keeps-growing/

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http://www.biggerpieforum.org/op-ed/mississippi%E2%80%99s-psc-not-looking-out-mississippians

 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

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http://www.biggerpieforum.org/op-ed/kemper-coal-plant-will-have-everyday-high-priced-electricity  

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)

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FROM  NORTHSIDE SUN,  MARCH 12, 2013

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.

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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.

http://www.biggerpieforum.org/op-ed/kemper

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

Cororate Fascism in MS: Cost of Kemper power plant keeps growing

biloxi-lighthouse-stamp-25This  is a very important article by Wyatt Emmerich, publisher and owner of Emmerich Newspapers and the Northside Sun.  Louie Miller of the State Sierra Club had first distributed this via email but I just found this version in print with the Delta Democrat Times.  Emmerich has been consistently one of our best allies in presenting the truth.  Isn’t that a contrast we get from our local corporate press, the Sun Herald?  I wonder if the fact that they continually yield to Miss. Power has anything to do with it??  hahahahaha–Thomas Baldwin.

 
 
FROM THE DELTA DEMOCRAT TIMES—4-21-2013
Cost of Kemper power plant keeps growing
 
Wyatt EmmerichWyatt Emmerich
Greg Campbell

Wyatt Emmerich

Greg Campbell
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?
 
MP officials are predicting Kemper will only cost $20 million a year to operate because sales of CO2, ammonia and other by-products will offset operating costs.Two problems here: The rosy forecasts of by-product sales could fail to materialize. And the operating and maintenance costs could well be far in excess of forecasts.For instance, MP projects $27 million a year in maintenance for a plant that cost $4 billion. That’s about half of one percent of the cost of the plant. Not likely for the 40-year life of the plant.
 
From 1990 through 2004, natural gas prices averaged around three dollars. From 2005 to 2008 gas prices suddenly spiked to eight dollars. At that price, the Kemper lignite plant could possibly be competitive with gas. In 2009, natural gas prices dropped back down to historical levels and have stayed there. With fracking, cheap natural gas is projected for years to come.
 
Dozens of coal projects were shelved when the price of natural gas dropped in 2009. The four billion dollar question is why the Kemper plant proceeded with construction — despite the fact that its authorization was under appeal.
As it turns out, the Mississippi Supreme Court ruled in 2011 against Kemper, throwing Kemper, the PSC and Mississippi Power into disarray. The high court said Kemper’s construction was not supported by “substantial evidence” and remanded its approval back to the PSC.
 
This was a problem. The plant was already under construction. Over a billion had been spent.  What was the rush? Kemper could have been altered to burn natural gas and the coal gasification could have been added later if gas prices did indeed double.Or Southern, Mississippi Power’s parent, could have paid for the chemical plant and kept the by-product sales, leaving Mississippians to pay for the only thing they want — affordable electricity. Southern had $2.35 billion in profit last year.
 
Southern will not release its forecasts of natural gas prices. It’s a trade secret, they say.  Experts are predicting low gas prices for years to come. Even if gas prices double in 10 years, losses in the meantime will make it hard for Kemper to ever break even.
 
Entergy customers pay about a third less for electricity than Mississippi Power customers. And that was before the recent 22.69 percent rate hike approved last month by the PSC to fund Kemper.(Press releases touted the increase as only 12 percent, but my calculations were confirmed by company officials.)
 
Here’s the reality: The bigger the project, the more money Southern makes because they get a guaranteed return on their investment of about 10 percent.
There are huge cost overruns. Three hundred Mississippi contractors are involved, including Mississippi’s Yates Construction as the recently-fired general contractor. Kemper has grown from $1.8 billion to $3.9 billion and rising. The independent auditor for the project concluded in November that Southern “is not utilizing some basic project management and project control tools and techniques that are available and customarily used in the industry for a project of this magnitude.”
 
There is something wrong when millions of Southern Company stockholders can benefit by foisting an experimental technology on the poorest state in the country.
 
That’s why we have a Public Service Commission — to protect the public against the power company’s monopoly. Democrat Brandon Presley voted against Kemper because he didn’t think the technology would work. Such a disaster could cost Mississippi $300 million a year. It would be the beef plant times 80.
 
The other two commissioners, Lynn Posey and Leonard Bentz, Republicans, have supported Kemper lock step. Bentz was appointed by Haley Barbour, whose lobbying firm has received $2.6 million in payments from Southern Company. Getting the picture?
 
At Southern’s annual stockholders meeting, an investment firm raised the issue of political transparency. Southern does not disclose the recipients of its lobbying and political payments. It is in the tens of millions, perhaps more. New U.S. Supreme Court rulings allow companies to contribute an unlimited amount to whomever they please — even a company that depends on public officials for its profitability. For Southern, it has been money well spent.
There has yet to be a final prudency hearing on Kemper. That means it’s not too late for the Mississippi PSC or even the Mississippi Supreme Court to exit this bad deal. Unfortunately, that would require a change of heart of two PSC commissioners.
 
The defense of Kemper by Bentz and Posey rests on one concept — diversification of energy. They fear the volatility of natural gas.
 
There are three problems with this analysis: First, Mississippi Power is already diversified. Forty percent of its power comes from coal already, without Kemper. Second, volatility means natural gas prices can go down, as well as up. Placing a $4 billion dollar bet either way is extremely risky. Third, Bentz and Posey have bet on the wrong side. Gas prices have dropped like a rock and are forecast to remain low for many years to come.
 
Posey and Bentz said Kemper will last 40 years and who knows what will happen over that length of time. Indeed, who knows? That’s why Kemper was profoundly imprudent. It’s time for the PSC to admit it and take remedial action. If not, the Mississippi Supreme Court should do it for them.
 
Wyatt Emmerich is the owner of Emmerich Newspapers.

Reed says GOP officials ‘duped’ by MPC

biloxi-lighthouse-stamp-25This is a very significant publication and should show everyone that the issue with Miss. Power,the Southern Co. and the infamous MS Public Service Commission led by Leonard Bentz is not a political partisan issue.  It is about blatant corporate fascism in the State of MS and it will destroy us soon if we don’t vehemently oppose it.–Tom

http://www.clarionledger.com/apps/pbcs.dl/article?AID=/201304120100/OPINION/304120012

  • Reed says GOP officials ‘duped’ by MPC

Apr. 11, 2013 2:55 PM   |  

0 Comments
Written by
Bill Minor
  • FILED UNDER

You’d hardly expect to hear a diehard Reagan-era Mississippi Republican sharply criticizing a big utility company for building a costly, unneeded — and experimental — generating plant with endorsement from state GOP leadership.

Well, it has happened. Clarke Reed, of Greenville, pioneer of the state’s modern GOP, has spoken out against the controversial $4 billion lignite-fueled plant being built by Mississippi Power Company in Kemper County. MPC is the subsidiary of the Georgia-based Southern Company.

Reed, 84, both in an interview with Bigger Pie Forum the conservative economic advocacy group, as well as this writer, has broadly implied that not only former Gov. Haley Barbour but the state’s current elected Republican leadership were “duped” by the utility monopoly into throwing their support behind the Kemper plant.

Reed was outraged that the Kemper project would become the “signature” legislation of the first Republican-controlled state executive branch since Reconstruction. “It proves Republicans are for millionaires and don’t give a damn about the state,” Reed told BPF, adding “I think it is a political issue that could be used against us for years.”

The Kemper plant marks the first attempt to use lignite, a soft peat-like form of coal with low combustible quality that underlies a broad area of east-central Mississippi, in the generation of electricity. Using a large volume of water, it is to be converted into synthetic natural gas to fire generators.

Reed asks the same question that many outspoken Kemper critics have asked: “Why spend $4 billion to build a lignite-fueled power plant when you could build a natural gas plant for $800 million? It’s totally foolish. We’re going to have more natural gas down here than we’ll ever need.” The Greenville businessman added the argument of lignite proponents that natural gas is more expensive to use has been demolished by new technology to extract the gas from shale formations which he called a “game changer … there’s no way natural gas (price) is going to spike up.”

The longtime state Republican leader would not specifically embrace the term “conflict of interest” that Barbour is a staunch advocate for building the Kemper plant while the Southern Company is a client of Barbour’s Washington, D.C., lobbying firm. Reed, who was influential in launching Barbour’s rise in national GOP politics as a legislative aide in the Reagan White House, said he didn’t believe the former governor saw the Southern Company connection as a conflict. But he did not exclude Barbour in saying “how could our elected officials have been duped into this thing.”

Public Service Commissioner Brandon Presley, a Democrat, waged a lonely three-year battle on the commission trying to block Mississippi Power’s Kemper plant scheme. Presley has charged MPC’s making ratepayers bear the cost during the plant’s construction amounts “corporate socialism.”

Ironically, now a founding father of the modern Mississippi GOP has arrived at practically the same conclusion about the Kemper plant. Reed, who is still recovering from a near-fatal automobile collision several months ago, contended that Southern Company “bought” Mississippi’s government, by investing $5 million on lobbyists and getting a $4 billion return. “Where could they get a better return than that?”

The gray-maned Republican warhorse charged that “people are going to wake up at some point and see what happened.” Reed added that GOP political opponents will begin to say “When those Republicans came in — those conservatives that we thought were going to do everything right — look what we got out of it.” He concluded: “We ought to be thrown out.”

Page

Contact Bill Minor through Ed Inman at edinman@earthlink.net.

 

“CLEAN COAL” IS A SCI-FI WET DREAM OF DESPERATE ELECTRICAL UTILITIES

Clean coal image 1--schoolsBy Thomas Baldwin, Biloxi, MS

March 18, 2013

This is a brief paper which summarizes some of what has been reported on the technology associated with IGCC (coal gasification) power plants around the world.  As everyone may not recognize, the Kemper Coal Plant in Mississippi utilizes the latest technology to build a power plant to generate over 500 Megawatts of electricity. As power plants go, this is not a huge plant by generation standards.but it does represent a huge expense imposed on the citizenry of Mississippi to pay for this impending debacle. Although I will focus on the probability here of success, I will also comment on the financial aspects later.  I will leave the environmental aspects of this experiment for others who know much more than I do about this particular project.  I want to keep it as simple as I can!

Although the illustrious “genius” and the chairman of the three members of our MS Public Service Commission, Leonard Bentz, has maintained this technology has been “thoroughly tested”, I contend that he is does not even understand this project and merely a stooge for Miss. Power and its parent, the Southern Co.of GA.  I don’t believe he understands anything about the technology or anything about the risks and potential hardships involved for the citizenry/ratepayers of Mississippi.  He actually publicly scolded us in the most recent PSC hearing he chaired in Jackson to grant Miss. Power rate increases to pay for this boondoggle and ultimate debacle. He accused all of us for putting out false information.  Thus, he immediately showed his lack of understanding and disrespect in an afternoon session of the cost implications.  As Forrest Gump told us:  “Stupid is as stupid does.”  Mr. Bentz should watch the movie “Forrest Gump” again.

So let us explore briefly the record of “clean coal” technology to generate electrical power.  I will include my sources here for you to read but frankly it ain’t rocket science to understand the scam and atrocity being imposed on us in the State of MS.  So I will attempt to summarize as best I can.

THE HISTORY AND RECORD OF IGCC (COAL GASIFICATION) PLANTS

There are numerous sources here which you can easily explore yourself just by searching (Google).  I will present a few of those here and present excerpts from those articles.  This is about the plant that the Southern Co. (yes the parent of Miss.  Power!) is attempting to build in China!  I will add to that the experience of Duke Power in Indiana.  Oh how wonderful this “web” of progress, huh?

Some Recent History

This source now is nearly a year old but is still significant.  Read this message!!

“GreenGen and the handful of other IGCC coal plants in various stages of construction worldwide—including another plant in China and two in the United States—are the sole survivors among dozens of IGCC projects proposed and shelved over the past decade. Most fell by the wayside only in the past few years. A push for carbon legislation in the United States collapsed, as did the 2009 climate treaty negotiations held in Copenhagen. Without such measures, utilities have no incentive to invest in carbon capture. Over the same period, coal progressively lost its status as the cheapest fuel for power generation, as hydraulic fracturing operations flooded the natural gas market and slashed gas prices.


The resulting IGCC casualties include even FutureGen, the flagship project in the U.S. Department of Energy’s Clean Coal program and the inspiration for GreenGen. The Bush administration killed FutureGen in 2008 amid rising costs. The project may return under President Obama but as a test of a simpler but even less-proven low-carbon coal scheme known as oxyfuel combustion.”

Source:  The above is from a source entitled:  China’s first coal gasification power plant opened in Tianjin.  http://www.whatsontianjin.com/news-3524-china-s-first-coal-gasification-power-plant-opened-in-tianjin.html

I don’t want to overload with you with data or information here.  Just some facts, mam and gents. This little 3 billion dollar plant that Miss. Power and the Southern Co. of GA are building in Kemper County represent an enormous risk and potential disaster and the citizenry of MS are being asked to assume all of the risks by their corrupted state government. 

Let’s look at another specific example in the U.S.   The Edwardsport, Indiana, IGCC plant by Duke Energy was begun in 2007.  I can’t determine whether it is running yet but I believe the cost overruns were almost exactly what is being projected for Kemper, about one billion dollars. It’s not clear whether it is even operational or not.  Here’s a report on that from  the latest one I could find and here are some excerpts:

http://en.wikipedia.org/wiki/Edwardsport_Power_Stationhttp://en.wikipedia.org/wiki/Edwardsport_Power_Station 

IGCC units

“In 2007, Duke Energy Indiana began construction of a 618 megawatt (MW) integrated gasification combined cycle power plant. This plant was to be the first of its kind of its size. The gasification process at the new plant involves converting coal into a combustible syngas that will be used in a combustion turbine. The exhaust gases are routed through a large heat recovery steam generator that will be used in conjunction with a steam turbine to further increase the plant’s efficiency.The new plant is slated to be a base-load station. The construction of the plant has reserved the necessary space required for carbon capture and storage if Duke Energy decides to add this component to the plant at a later date.[2] However, when the plant was originally planned, it was thought the site was ready for carbon injection. After conducting further research, it was determined that the site is actually not geologically suitable for underground storage of carbon. Instead, Duke Energy Indiana would need to seek approval to construct a pipeline to transport carbon to a more suitable site.

Edwardsport’s pollution per unit of energy produced will be greatly reduced, as particulate matter and mercury will be removed from the syngas. The coal-derived synthetic gas is much cleaner than conventional coal combustion to begin with, and it is easier to clean to greater extent. Coal gasification allows carbon capture to occur before the fuel is combusted — a much easier and economically feasible operation than carbon capture of exhaust gases.

It is expected that Edwardsport IGCC will be online during 2012. 

Cost overruns and controversy

The construction of the Edwardsport IGCC has been clouded in controversy and legal troubles for both Duke Energy Indiana and the Indiana Utility Regulatory Commission. Thus far, the legal issues have resulted in the firing of the second highest ranked executive for Duke Energy, the dismissal of the Chairman of the IURC, David Lott Hardy, and Hardy’s subsequent indictment for three felony counts of official misconduct in cases concerning Duke Energy.[3]

So what are we to believe?  Well certainly not the arrogant attitude of Leonard Bentz, our PSC representative from So. MS.  I can’t put into words that might appear in the press anywhere which would describe my attitude toward this man. And this is only a brief blog which represents much more to come! 

THE FINANCIAL DISASTER

This part has become clear and the MS Sierra Club has done an extraordinary job of bringing this to the forefront.  It is so complicated with a web of political deceit that it is hard to simplify in a paper like this.  But it is analogous on a smaller scale to what the big banks have been doing to us forkemper-coal-take-action-picture hundreds of billions of dollars in the U.S.  Basically these big corporations like the Southern Co. are trying to use their political power to drive the rest of us into total poverty and dependency by gaining control over our political institutions including our Executive and Legislative branches of government. This is the essence of corporate fascism.  And folks, they’re winning their war and especially in MS!

Exhibit:  The Mississippi Power Kemper Plant. 

Kemper was originally proposed as the grand state of the art “clean coal” power plant near Meridian, MS even outside the Miss. Power territory.  When no other state wanted to build it, our former Governor Haley Barbour realized it was a great idea to serve his long term client, the Southern Co., and bring it to Mississippi.  There was about 300 million dollars from the Department of Energy to build a clean coal facility somewhere and Barbour said we’ll do it for you in MS.   The Southern Co, Mr. Barbour and others thought it was a great idea.  But the Southern Co., a large private company  could not get private investments to supplement their plans to do this.  Amazingly there was a bill in the Mississippi legislature in 2008 to allow public utilities like Miss. Power to charge their ratepayers to build a facility (whether it would come online or not) for the construction charges of a commercial private and experimental power plant.  Governor Barbour quickly signed a bill in the state legislature to fund it and guess what happened?  Lo and behold, a Kemper Coal Plant with hundreds of acres of a strip mine in Kemper County was designed.

It was touted as the numerous “jobs” it would produce.  Yes, there were construction jobs for a couple or more years and they were supposed to be for those in MS.  But that has not been the case.  The permanent jobs created were to be about 260 or so and no one knew whether they would be transfers or even new jobs.  But at the costs proposed for this plant, they would represent about 15 million dollars invested for each job with the “left overs” going to Miss. Power.  Not bad, huh?  Then there is the  cost for each ratepayer (186,000) expected to pay for this monster.  That’s about 15-20 thousand dollars a piece.

But of course, Mr Bentz, our PSC Commissioner was obviously not good in math either.  He has continuously touted what a great service he did by just authorizing Miss. Power to allow it’s first step in increasing rates for electricity by 12% followed by an additional rate increase of 3% within a year.  And this does not even include the rate increases which is anticipated by the additional one billion dollar bond issue to pay for cost overruns which could include an additional 5% cost increase in rates.  In other words, within a year, the total cost increase of our electricity in So. MS could be at least 20% or nearly what Miss. Power requested in the first place!

The financial aspects of this picture are a big “duhhhh”.  Never has any alternative like the uses of solar, wind, renewable energy sources, or conservation been considered. This would create many more jobs and represent the future.  But that’s because the Southern Co. under the “leadership” of CEO Tom Fanning,  and Miss. Power under the “leadership” of CEO Ed Day can’t figure out how to make money over “controlling” the energy from the sun. 

Oh my.  Is this what our corporate world which is controlling our government has come to??

**Photos are all from previous publications: Top photo is by Ralph Solonitz.  Others are originals and authorized for use by Thomas Baldwin.

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Tom at computer--new 011--cropped (1)About the author:  In approximate terms, Dr. Thomas Baldwin has had a 20 year career as a Physicist (Ph.D.) and a 30 year career as a Management Consultant (MBA).  He is currently retired in Biloxi, MS and looking for work other than just writing blogs like this which is a labor of love!  Have computer; will travel!

 

 

 

 

 

HOW TO BE SUCCESSFUL AT CORPORATE FASCISM! EXHIBIT I—MISSISSIPPI

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 biloxi-lighthouse-stamp-25the 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.

supreme-court-group-photo-tuepker--2

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.

http://billstatus.ls.state.ms.us/2013/pdf/history/SB/SB2755.xml

http://billstatus.ls.state.ms.us/2013/pdf/history/HB/HB1134.xml

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.  

http://www.sunherald.com/2013/02/02/4442683/julia-oneal-legislators-bowing.html#storylink=cpy

And this excellent report on the current status of this fiasco by Eileen O’Grady appeared in the January 31 edition of Reuters.

http://www.reuters.com/article/2013/01/31/utilities-southern-kemper-idUSL1N0AZMDT20130131

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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  doctom2010@yahoo.com