PSC sets Tuesday hearing on Hood filing

Published 1:23 pm Tuesday, May 5, 2009

Attorney General Jim Hood is seeking a detailed public disclosure of Mississippi Power Co.’s planned $2.2 billion power plant in Kemper County and utility regulators will hold a hearing Tuesday on the request.

Hood’s motion with the state Public Service Commission asks that Mississippi Power provide more details on the need for a new plant and give the PSC a legal reason to consider a rate increase to build the facility.

A new state law allows the PSC to approve utility rate increases before companies build power-generating plants. Under the old law, a utility company had to wait until a plant was operating before asking for a rate increase to recover construction costs.

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Entegra Power Group and Magnolia Energy, two power producers, have challenged the need for the lignite clean coal power plant and Hood said the legal issues need be addressed before the PSC rules on the plant application or proposed rate hike.

“There’s no intent to stop the plant. My job is to make sure that the law is followed and that the Public Service Commission has all the facts before it in order for a … decision to be made,” Hood said. “It’s the first time we have ever had it that the rate payer will be required to pay for a facility that hasn’t even been built yet.”

Mississippi Power is part of the Southern Company, which includes Alabama Power, Georgia Power and Gulf Power. It serves about 184,000 customers in the 23 counties of southeast Mississippi and announced in December 2006 that it was considering building the plant in central Mississippi’s Kemper County.

“We respect the right of the attorney general to do his job and look into this filing,” said company spokeswoman Cindy Duvall. “We are confident when we have the opportunity to participate at the hearing that we will be able to alleviate some of the concerns that he has and address some of the claims in his filing.”

The plant will be a 582-megawatt integrated gasification combined cycle that converts locally mined lignite, or “brown coal,” into a gas to generate lower-emission electricity. However, the clean coal technology is more costly and new.

To offset the costs, the company says, it has received a $270 million grant from the U.S. Department of Energy, a $133 million in investment tax credits under the National Energy Policy Act of 2005 and is seeking the rate increase.

Hood said the rate increase request is not detailed enough and since rate payers are the ones affected, he believes Mississippi Power should provide more details and make it public.

“We want it to be all open to the public, so that the public and everyone can view what the rate increase will be,” Hood said. “Anybody that opposes this, experts can come in and say whether they agree or disagree. At least you have a public debate about it and you understand what the rate increase is.”

Public Service Commissioner Brandon Presley, who represents north Mississippi on the three-member board, said: “In fairness to all parties I really just can’t comment on much of it because it is a contested case.”

Anthony Topazi, Mississippi Power president and chief executive officer, said in a news release earlier this year that the “plant will diversify our fuel sources and will produce energy at lower and more stable costs than any other fossil fuel option.”

Topazi said the project should create about 260 new permanent jobs from the plant and mine operations, plus 1,000 jobs during peak construction.

Mississippi Power has posted information about the project on its Web site and Hood said the company has been forthcoming in answering his questions and concerns.

“But this is a new technology that hasn’t been done in other places and we just want to be careful and make sure rate payers don’t get saddled with something that wasn’t looked at properly,” Hood said. “I will say on behalf of Mississippi Power, they have been working with us to provide answers to our questions.”

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