Proposed power plant sparks controversy over rate hikes

By Danielle Thomas - bio | email

GULFPORT, MS (WLOX) - Public hearings on a proposed $2.2 billion power plant in central Mississippi won't start in September, but supporters and opponents have already started making their case. The Mississippi Public Service Commission must decide if Mississippi Power can build what's called an Integrated Gasification Combined Cycle plant in Kemper County, north of Meridian.

If given approval, Mississippi Power is also asking permission to charge customers for some of the cost of the project. The Sierra Club said financially and economically, the new plant is a bad idea.

Sierra Club members stood across the street from Mississippi Power's Gulfport Headquarters passing out information packets Thursday. Their message was that the company plans to build a new plant is based on unproven technology.

"We think it's a poor selection of a way to generate power for Mississippians," Louie Miller of the Sierra Club said. "I think if you were going to go eenie, meenie, minie, mo and you picked one, this would be the worse one you could pick. "

Mississippi Power officials say they are confident in the technology that would fuel the Kemper County plant. A type of coal called lignite is pressurized into a synthetic gas which creates energy.

"We have been testing it, developing it, and researching it for 15 years with the Department of Energy," said Mississippi Power Spokesperson Todd Terrell. "We have even taken Mississippi lignite and transported it over to our research facility to make sure that it works."

Mississippi Power is looking to pass on some cost of the research and construction financing costs to customers.

"The Baseload Act enables the Public Service Commission to allow us to begin to recover some of the financing costs of the construction of the plant. Not the actual pre-construction, but just the actual financing costs," Terrell said. "We're asking if we can begin to recover some of the financing costs so that they don't continue to build and grow. Our customers would ultimately be paying more in the future. They would be paying financing costs on top of financing costs. Like a credit card really."

Officials estimate that could amount to a four percent to six percent increase for the first two years of plant operation, which officials say would be 2012 at the earliest.

"We feel the benefit of this is we do begin to get a handle on the fuel volatility that we are currently been experiencing," Terrell said. "Natural gas prices have been extremely high and volatile. Coal prices have been rising and becoming more and more volatile. And we know that we can have a stable fuel source in lignite and the price is going to be dependable over the long term, so ultimately customers benefit on price."

Louie Miller said, "They need to take their stockholders and the Fortune 500 Company assets and build it. Not shift all of the financial risk off of the Fortune 500 investor utility, Mississippi Power, and put it onto the rate payers."

"That's unconscionable. Nobody else raises capital like that in this country and this certainly should not be allowed to stand."

Miller said the Sierra Club will take its arguments to the Public Service Commission.

Mississippi Power officials say the proposed plant would have a lignite mine on the property which would save in transportation costs. Officials also say they would be able to sell carbon dioxide from the lignite to oil companies. The plant would provide power to 23 counties.

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