MISSISSIPPI ISSUES: MISSISSIPI POWER'S KEMPER COUNTY COAL PLANT

JACKSON, MS BY LOUIE MILLER, EXECUTIVE DIRECTOR, MIISSISSIPPI SIERRA CLUBKemper County Lignite Plant is planned to be built in the Chickasawhay flood plain, meaning that any runoff from the project will impact the Pascagoula River system. What Mississippi Power wants to do is dig a 100-foot hole in the ground to extract lignite, a wet, woody, low-energy coal and then burn it in a 500-megawatt plant to be built next door. 20,000 acres of prime forest land and small farms will have to be eliminated from existence in order to build this plant and dig the giant hole in the ground.
The Kemper County area where the electricity is generated is not in Miss. Power's service area, so the electricity will be supplied to that county and surrounding areas while the citizens in the 26 counties served by Miss. Power will actually have their rates increased in order to pay for the construction of the plant-- even if the plant does not generate a single kilowatt of electricity! This will be the first plant ever built in MS to be paid for by rate increases before it is put on line.
The technology to derive electricity from this wet, fossil wood called lignite is experimental. As a result, Miss. Power has already charged ratepayers to send the plans to China where a pilot project is underway to build a plant and see if it can generate more electricity than the power consumed in its operation. Miss. Power claims that if this technology works it can sell it around the world, but if China is developing the pilot project, it seems obvious that China will be selling the technology around the world, not Miss. Power.
This plant will at least triple the rate electricity costs in the 26 coastal counties since the plant will cost at least $4 billion dollars. This cost is applied to citizens and small business only, since shipyards, casinos, refineries and other large businesses have been guaranteed to have no rate increase as a result of building this plant.
The rate of electricity will have to go up considerably higher than Miss. Power projects because average citizens will likely switch to using more natural gas and other alternatives if the rate is increased. This should eliminate any "all electric homes" from our service area.
Southern Company (MS Power's parent) is a major client of Haley Barbour's lobbying firm. Haley Barbour's history with the Southern Company includes aiding Cheney in going back on W's promise to cut emissions (http://www.sourcewatch.org/index.php?title=Haley_Barbour ). More recently, the lobbying firm arranged to have federal funds from a similar IGCC plant that was planned in FL and canceled, to be transferred to MS Power. They brag about it on their web site (http://www.bgrdc.com/clients.html--the second bullet under "Successes"), but transfer of funds to a project before the Environmental Impact Statement is approved is illegal.
Unnecessary, Expensive and Dirty
MYTH #1: MPCO argues that South Mississippi will run out of electricity if this plant is not built.
REALITY: Mississippi currently has power plants that can supply almost three times the amount of power the entire state requires at peak times.
Specifically, Mississippi has twelve natural gas-fired power plants already built which sit idle 85% of the time but can provide up to 7993 megawatts of power (Source: Mississippi Public Service Commission website/electric service>merchant generation plants). MPCO’s proposal would produce only 585 megawatts of power. Therefore, just one of the twelve existing natural gas plants could easily meet and exceed the state’s future electricity demands and needs that MPCO has identified.
The fact that these twelve plants were built with private investor dollars is also noteworthy since MPCO’s proposal requires consumers to foot the bill for this $2.4 billion plant, even if they never use the electricity.
MPCO also assumes that the only way to reasonably meet demand for electricity is to build new power plants. Yet the company has never fully utilized readily available ways to reduce demand through conservation. One simple way to accomplish this is by “weatherizing” or retrofitting new and existing homes and buildings with energy efficient doors, windows, insulation, appliances and heating and cooling units.
Weatherization programs help grow our economy because they create manufacturing jobs to produce energy efficient goods and new jobs for installing these products. In fact energy conservation could produce far more jobs than would be created by the Kemper coal plant. A recent study by American Council for a Energy Efficient Economy concluded that energy conservation initiatives could create 569,000 new jobs nationwide by 2020, with 5,100 jobs right here in Mississippi.
Serious conservation efforts could actually eliminate the need to build new power plants. In fact it could save over four times what Kemper could generate. A recent study by Georgia Tech concluded that energy savings for Mississippi could equal the amount of energy consumed by 343,000 households!
Saving energy also means less pollution. While the Kemper coal plant will be cleaner than the coal plants of the past – at least on paper – not using dirty fossil fuel energy in the first place is the cleanest alternative.
Just as important for consumers, saving power can create a permanent savings on electric bills, and less money on electric bills means more money for other things a family needs, like education and health care.
MYTH #2: This proposal will not raise the bills of MPCO’s customers.
REALITY: The price tag for the Kemper coal plant is $2.4 billion -- and rising. This represents by far the largest capital expenditure ever put into an electric utility’s customer rate base in the history of our state.
The Mississippi Public Service Commission’s (MPSC) own expert has concluded: “The Kemper IGCC facility is an expensive new facility and, if its costs were allowed to be put into rates, then Mississippi Power’s rates would increase substantially as compared to rates of today”. The expert goes so far as to say that the “rate increase caused by the IGCC plant itself could actually reduce peak demand and energy use and, thereby, obviate the need for some or all of the plant”. (Source: Testimony 2009 UA-14 Craig Roach redacted p. 35).
MYTH #3: Despite its $2.4 billion plus price tag, the Kemper coal plant is going to save customers money.
REALITY: MPCO will not even make public the basic facts supporting their claim. If this plant is better for customers than using existing power plants and energy conservation measures, MPCO should be transparent in supporting their claims so they can be independently verified.
The old adage “Actions peak louder than words” also applies, since MPCO spent hundreds of thousands of dollars lobbying the state legislature to change the law to allow the up-front risk of financing this plant to be shifted from its stockholders to its customers, even if the plant is never put into service. If this plant is such a great financial deal, MPCO and its shareholders should be willing to accept the risk of building it.
MYTH #4: The Kemper coal plant is “clean coal”.
REALITY: MPCO’s proposal involves digging up 45-square miles of Kemper County for strip mining, which would displace hundreds of residents while destroying valuable streams and wetlands. Five hundred acres will be used as a dump for toxic coal ash from the plant. The plant itself will be classified as a major source of air pollution under the federal Clean Air Act.
MPCO proposes to capture and sell 65% of the carbon dioxide emissions from the plant, which is far better than existing coal plants. What the public isn’t being told, however, is that the company does not yet have anyone to buy this carbon dioxide, and that until a buyer is secured, MPCO will not commit to this reduction in the air permit. That means if the market for carbon
dioxide doesn’t materialize, consumers will likely bear the cost of disposing of it, making the proposal an even more expensive venture for the public.
Why not use conservation and existing natural gas fired plants, which will get more environmental bang for the buck with less risk to ratepayers?
Finally, the Kemper coal plant will also emit as much as sixty-three pounds of mercury per year, even after pollution control technology is used. Over time that’s enough toxic mercury to contaminate thousands of waterbodies and million of pounds of fish. When whole river systems in Mississippi are already so contaminated with mercury that the fish pose a danger to pregnant women, why allow more contamination when there are better alternatives?
Lynn Posey (800) 356-6430, central.district@psc.state.ms.us
Leonard Bentz at (800) 356-6429, southern.district@psc.state.ms.us
Brandon Presley at (800) 356-6428, northern.district@psc.state.ms.us