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Miss. Supreme Court Reverses Permit Approval for $2.8B Kemper IGCC Plant

In a major setback for Southern Co.’s 582-MW integrated gasification combined cycle (IGCC) Kemper power plant that is under construction in Kemper County, Miss., the Mississippi Supreme Court reversed an order by the Mississippi Public Service Commission (MPSC) granting the project a Certificate of Public Convenience and Necessity.

The court concluded that the MPSC’s order did not cite detailed evidence with which the court could determine the MPSC’s basis for granting the key permit. The court remanded the case back to the MPSC.

Southern Co. subsidiary Mississippi Power Co. (MPC), which is building the plant, lamented the decision, saying in a statement that “nothing has occurred since the order which should cause the Commission to reverse its decision granting the Certificate.” The IGCC plant has to date been awarded more than $680 million in federal funding, including $270 million from the DOE’s clean coal initiative. It was designed to burn Mississippi lignite.

“We are confident there is substantial evidence in the record to support the Commission’s approval of the Certificate,” said Jeff Shepard, company spokesman. “It is our hope and expectation that the Commission will address this expeditiously. We intend to continue construction of this facility to provide our customers with a sound energy future and unlock the facility’s substantial customer benefits.”

In May 2010, when the MPSC approved MPC’s request to build the plant, it capped cost recovery at $2.4 billion—some $800 million less than what the utility had originally sought. The order also required Southern Co. to pay all construction costs. Just a few weeks later, however, the MPSC voted 2–1 to ease restrictions, ruling that construction costs passed on to ratepayers could be no more than $2.88 billion. The regulatory body also said that costs could go no higher unless it could show that costs for concrete, steel, and other building materials had increased.

According to state Supreme Court documents, the Sierra Club opposed the MPSC’s decision, and when the Chancery Court of Harrison County affirmed it, the Sierra Club appealed.

"When the Commission grants authority for such projects, Mississippi law requires it to make findings supporting its decision; and, according to the statute, the Commission’s findings must be ‘supported by substantial evidence presented’ which ‘shall be in sufficient detail to enable [this] court on appeal to determine the controverted questions presented, and the basis of the commission’s conclusion,’" the court wrote in its two-page decision. "We find the Commission’s approval of the project fails to satisfy this requirement, so we reverse the chancery court’s judgment and the Commission’s order and remand to the Commission for further proceedings."

The case is Sierra Club v. Mississippi Public Service Commission and Mississippi Power Company Inc. (2011-CA-00350-SCT).

Sources: POWERnews, Mississippi Supreme Court, Southern Co.

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