PSC Moving to Next Fight on $2.4B Coal Plant

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Commissioner Lynn Posey announced Monday that hearings for the proposed Kemper County plant will move forward.

by Adam Lynch
November 10, 2009

The Public Service Commission announced a unanimous agreement to continue hearings into the need for a new $2.4 billion coal plant in Kemper County. "The Public Service Commission finds that Mississippi Power Company (MPCO) has demonstrated that public convenience and necessity requires or will require additional generating capacity and energy as early as 2014. Further, after a review of the entire record, the commission notes that the record contains no credible evidence to support a finding that MPCO has no need or that this commission should not proceed to Phase two of these proceedings," Commissioner Lynn Posey wrote in a release Monday.

Neither Mississippi Power Company nor the Public Service Commission could be reached for a response to the PSC's decision.

While Phase 1 of the hearings determined the state's growing need for a plant, Phase 2 hearings, which begin Feb. 1, 2010, will compare the Kemper plant's cost effectiveness against other forms of power generation, such as the largely unused population of newer gas-fired power plants owned by independent merchant companies dotting the state.

The proposed Kemper County plant will cost $2.4 billion, according to Mississippi Power, though the company intends to take advantage of an incentive package from the Department of Energy that could bring that cost down to $2.2 billion.

Sierra Club Director Louie Miller, who is on record as opposing the plant as "a dirty-technology trying to sell itself as clean power," said Mississippi Power will have a harder fight in the next phase.

"Commissioners want a full analysis of existing plants and excess capacity that's already out there. They're saying there's a need, and now we're going to analyze how to fill that need, but a $2.4 billion investment may be too much to put on rate-payers when we've already got unused plants all over the state," Miller said. "Why would you buy a Cadillac Escalade simply because you've got a coupon from the Department of Energy when you've already got a Toyota Corolla in the garage that's already paid for, which can get you where you need to go?"

Phase 2 will also address lingering uncertainly about the price of compressed carbon dioxide (a by-product of the plant's carbon capture technology which will be sold to the oil industry) and what the Public Service Commission calls "Mississippi ratepayers' inability to avoid a $2 billion cost" once Mississippi Power commits to building the new plant.

Texas-based KBR, a favorite company of the George W. Bush administration for no-bid contracts, could get the contract to engineer the proposed Kemper County plant, giving advocates for Mississippi workers concerns over safety and jobs.

"They don't use professional people to put their projects in. They'll bring undocumented workers from all over the world to come in and take the jobs," Building and Construction Trade Union President David Newell told the Jackson Free Press in October, warning that Mississippi Power has made no assurance that it plans to allow union workers.

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