Kemper Coal Rate Increase Denied


kemper bill smallerThe Mississippi Public Service Commission surprised a packed hearing room on Friday, June 22nd when its three members unanimously denied Mississippi Power’s proposal for a 13% rate increase that would have added an estimated $20 per month to 188,000 ratepayer’s bills in 23 counties. All the Commission’s recent decisions, until now, have been in favor of Mississippi Power. The increase was to pay for financing costs rather than construction costs for the Kemper Combined Cycle power plant that will strip-mine dirty, low grade, lignite coal as a power source. GRN’s 2011 comments to the Army Corps and Mississippi Department of Environmental Quality produced some permit modifications that reduced wetland and stream destruction in the project’s footprint and broadened the scope of water quality monitoring downstream, but this project would still have significant impacts on nearby and downstream wetlands and waters.

Public participation was allowed at the hearing, and a dozen citizen comments focused on the economic hardship to ratepayers of an immediate (July) power bill increase. All speakers asked for relief for fixed-income ratepayers and the poor. Several questioned the wisdom of allowing a rate increase to pay for a project that is already $366 million over budget and is not yet 1/3 complete. The Commission’s denial defers a decision on a rate increase until after the Mississippi Supreme Court’s ruling in the Sierra Club’s recent lawsuit - an administrative appeal of the PSC’s basis of decision in its May 2012 approval of the plant.  The delay of further PSC action until the Court rules in the Sierra Club case is a face-saving tactic that buys the PSC some time. For Mississippi Power, time is money, and it will have to look elsewhere for $56 million in financing.  Click here to check out an article in the Clarion-Ledger.

Andrew Whitehurst is GRN's Assistant Director of Science and Water Policy.


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