FOR IMMEDIATE RELEASE: June 13, 2012
Contact:
Jenna
Garland, jenna.garland@sierraclub.org,
(404) 607-1262 x 222
Mississippi Power Co. to Ask PSC for
$100M Rate Increase for Kemper County Coal Plant
New Filings Show Plant
Already $366 Million over Budget
Jackson, MS – As Mississippi
Power prepares to ask the Public Service Commission (PSC) for a $100 million
rate increase, filings from the independent monitor of the Kemper County Coal
Plant show Mississippi Power Company (MPC) has spent $366 million past the
budget with the plant less than one-third complete. MPC has said it expects
rates to increase by 30% to pay for the new coal plant, although independent
analyses have found that a 45% rate increase is more likely.
“The Sierra Club warned the PSC
of this exact scenario,” said Louie Miler, Director of the Mississippi Sierra
Club. “The Kemper County Coal Plant is not even one-third complete, yet they’ve
blown through the contingency fund and are $366M over budget. We’re on a crash
course to blow the budget even more, and it’s time the PSC stepped in and
protected the ratepayer from Mississippi Power’s dirty, expensive, unnecessary,
and experimental Kemper coal plant.”
The May 2012 report from URS
Corporation, which is serving as the independent monitor of the Kemper County
coal plant project, documented cost overruns of $366 M from a filing from
Mississippi Power Company on May 10, 2012. This report documents
that with only 31% of construction complete, Mississippi Power has exhausted
its $167 M contingency fund and has overspent in engineering and construction
costs, as well as other areas.
“The Kemper County Coal Plant is
fast becoming Mississippi’s biggest financial boondoggle,” said Glen Hooks, Beyond
Coal Campaign Representative with Sierra Club. “Duke Energy’s Edwardsport Plant
is the only other project of this nature in the country, and it is already more
than $1 billion over budget and is not yet complete. How far will this disaster
go before the PSC steps in and rights this wrong?”
Sierra Club has challenged the
Kemper County Coal Plant project from its inception, successfully
arguing before the Mississippi Supreme Court that the PSC had improperly and
illegally issued permits to Mississippi Power for construction and development
of the project. Sierra Club and Commissioner
Brandon Presley have also argued that Mississippi Power ratepayers should
not be required to finance the construction, development, and operation of the
Kemper County Coal Plant. Mississippi Power, the smallest of the Southern
Company state-based utilities, has only 180,000 ratepayers in Southern
Mississippi.
“To add insult to injury,
Mississippi Power will ask for $100 M in rate increases to finance the Kemper
plant on June 22, just days after the public learns that the project is already
$366 M over budget,” said Louie Miller. “If this project is so great, the PSC
should let Southern Company – a Fortune 500 company - and its shareholders pay
for it. Instead, Commissioners Bentz and Posey want to stick the ratepayers
with the tab. The PSC needs to do the right thing and pull the plug.”
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