The Mississippi Public Service Commission (PSC) on Wednesday voted 2–1 to approve Mississippi Power’s $2.4 billion integrated gasification combined cycle (IGCC) project proposed for Kemper County, saying it continued to find that the 582-MW project was the “best alternative” to meet the state’s future power demand. The state’s Supreme Court had reversed the PSC’s previous approval of the plant in March, ruling that it did not cite detailed evidence for a Certificate of Public Convenience and Necessity.
Two Republicans, Southern District Commissioner Leonard Bentz and Central District Commissioner Lynn Posey, voted for the 582-MW plant. Northern District Commissioner Brandon Presley, a Democrat, voted against it.
In May 2010, when the PSC approved Mississippi Power’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 the company to pay all construction costs. Just a few weeks later, however, the PSC 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 PSC’s decision, and when the Chancery Court of Harrison County affirmed it, the Sierra Club appealed. The Supreme Court found in favor of the Sierra Club this March and reversed the PSC’s order. It remanded the case to the PSC “for further proceedings.”
“The Commission continues to find, based on re-examination of the records in this proceeding, that the Kemper Project is the best overall alternative to meet the identified need, and to provide reliable energy and capacity at a low, stable-fuel price, provided by lignite, for the next several decades,” the PSC said on Wednesday.
“Fundamentally, the Order today has not changed from the previous Order and decision of the Commission to approve the IGCC Kemper Plant. What we did today was clarify our original decision, as requested by the Supreme Court. They asked us for more detail, and we gave it today,” Commissioner Leonard Bentz, who is also the PSC’s chair, said in a statement on Wednesday.
“If for some reason this plant doesn’t work or does not perform as advertised, the Ratepayer will not be responsible. It is imperative to note, as defined in the Order on page 108, the operational costs and performance parameters assure that the Ratepayers will not pay for an underperforming asset,” Bentz said.
Bentz added that currently projected rate impacts “are purely estimations,” and were subject to PSC ratemaking proceedings. They would not necessarily be approved, he said.
He stressed, however, that as “estimates filed and expert testimony show, the estimated impact of the Kemper Project on rates would not be the 45% that has been erroneously touted by the Sierra Club and others.” Anyone quoting a 45% increase is “playing with the facts,” he said.
“As stated in the Order, the Commission and legal staff can find no support for that anywhere in the filed documents or record. This information can be found beginning on page 121 of the Order. It is a public document, so anyone can see for themselves,” he said. “The bottom line is that even if Mississippi Power had asked for a rate increase of 45%, there is no way I would have approved it. I am against a 45% increase.”
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 is designed to burn Mississippi lignite.
Sources: POWERnews, Mississippi PSC