Issue: The Kemper County Lignite IGCC Facility

In March 2010, I wrote a letter to the three sitting Pubic Service Commissioners stating my reservations regarding the Kemper project and urged them to thoroughly assess whether Kemper is the best solution for generating electricity. Even before the MPSC authorized (not ordered) construction of Kemper, I expressed that this costly, unproven technology was not in the best interest of MS Power's customers. I stand by those assertions still today.

This project should have been halted permanently in March 2012 when the MS Supreme Court ruled in a 9-0 decision that there was insufficient evidence to support the authorization of Kemper and that the MPSC failed to satisfy its own requirements in supporting its decision to authorize Kemper (see MS Supreme Court Case NO. 2011-CA-00350-SCT). However, just days after the MS Supreme Court decision, the MPSC in a 45-second gavel-to-gavel meeting voted 2-1 to allow Mississippi Power Co. to move ahead with the project.

At that time, MS Power was predicting the Kemper project would cost $2.5 billion. With Southern Company to date already having paid out over $2 billion from shareholder profits to cover cost overruns, MS Power, Southern Company and its customers would have be in a much better place if the project was halted in March 2012. Now, there is a very real chance that Southern Company and MS Power shareholders could have to pay out up to another $4 billion to cover the costs of the Kemper plant if spending for the plant is not found to be prudent.

In addition to the March 2012 MS Supreme Court ruling against the MPSC, the MS Supreme Court also ruled in February 2015 in a 5-4 decision that the rate increases provided to MS Power Co. in 2013 and 2014 did not follow the law. I fully agree with the MS Supreme Court findings that the Base Load Act provisions were not followed, that insufficient public notice was given prior to the rate increase, and that all parties were not allowed to participate in the development of a settlement that allowed for the rate increases.

And the hits just keep coming. Just as the MS Supreme Court made a wise, informed decision to order that money collected through improper rate increases be returned to ratepayers, South Mississippi Electric Power Association (SMEPA) leaders have decided that Kemper will adversely impact their members and wisely decided to cut ties with the financially troubled and technically unproven project. The costs for Kemper are now over $6.2 billion with full operation predicted for 2016.

I firmly believe that the 186,000 customers of MS Power should not be held responsible for the full costs of the Kemper facility -- a project that is not needed, unproven, costly, inefficient and advanced on false premises. MS Power's current request for a 40+% increase in rates is unconscionable.

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