Regulators weigh Kemper plant’s future

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Mississippi Power’s customers will soon know exactly how much the Kemper power plant will cost.

At a hearing Monday, key players involved with the Kemper County energy facility project, including energy corporations to environmental groups, presented arguments to state utility regulators that will determine the value and future of the plant.

Ultimately, the Mississippi Public Service Commission will study the testimonies and hundreds of documents to determine what Mississippi Power Co.’s can charge customers for the part of the Kemper plant that is currently in use.

Kendra Ablaza, Mississippi Today

Moses Feagin, Mississippi Power vice president, treasurer and chief financial officer

In the hearing at the E. T. Woolfolk Building in Jackson, witnesses testified in front of the commission and their fellow parties, addressing what they considered rumors about the plant and elaborating on previous statements they made to the Mississippi Public Service Commission.

Some witnesses, including employees from Mississippi Power Co. and Liberty Coal Energy Corp., argued that the plant could still use synthesis gas one day, should natural gas prices rise again to the point that syngas becomes more economical.

Mississippi Power Vice President, Treasurer and Chief Financial Officer Moses Feagin and other Mississippi Power witnesses said the company could request the plant return to operating on synthesis gas, or syngas, if it was proven to be cheaper.

“If it makes good sense for customers, I don’t see any reason why not,” Feagin said.

Commissioner Brandon Presley said Monday it is highly unlikely the companies would follow through with this plan based on their filings. However, if they they do, the companies would fund the technology themselves and without assistance from ratepayers, he said.

Regulators could also scrap syngas, which is made from lignite coal, from the plant’s certificate, or operating license, meaning the plant can only operate on natural gas from now on.

Environmental groups such as Sierra Club and Steps Coalition argued that building the plant’s gasifiers that operate on synthesis gas was a costly risk, and it should not be an option on the table anymore.

“Ratepayers shouldn’t have to pay a dime for this project,” said Michael Adelman, an attorney representing Thomas Blanton, a Hattiesburg oil businessman who was the plaintiff in a state Supreme Court case that ordered Mississippi Power in 2015 to send refunds to its customers.

“We all make mistakes,” Adelman said. “Not necessarily $7.5 billion ones.”

Michael Adelman, a Hattiesburg attorney representing Thomas Blanton.

The Mississippi Public Service Commission decides on Feb. 6 if it will let Mississippi Power Co. recover about $99.3 million annually from its 187,732 customers. Its coverage area for the working parts of the Kemper County energy facility includes 23 counties.

This is $13.3 million less each year compared to the last stipulation document filed with the commission in December. The lowered rates incorporates the Tax Cuts and Jobs Act, which became law weeks after the stipulation was filed. Under the act, utility companies’ tax rates were slashed from a 35 percent tax rate to a 21 percent, and this will soon be reflected in what customers pay.

Meanwhile, it is not yet known exactly how the plant’s value will affect Mississippi Power’s rates. Mississippi Power will reveal any rate changes in filings later this year.

Mississippi Power’s rates are set by the Public Service Commission every year using a performance-based review procedure, known as a Performance Evaluation Plan or PEP-5.

Since a boost from ratepayers is not an option in this agreement, customers could see an impact in other ways such as local offices closing and other cost-saving measures, Feagin said.