FOR IMMEDIATE RELEASE: August 7, 2012
Contact: Jenna Garland, (404) 607-1262 x 222, (404) 281-6398
Louie Miller, (601) 624-3503
New Signs of Trouble for Kemper Coal Plant: Mississippi Power Reportedly Fires Construction and Engineering Firms
Move Prompts New Questions of Kemper Plant’s Viability
Jackson, MS – Today, Sierra Club learned that Mississippi Power has effectively terminated the company’s partnership with two companies highly involved in the design and construction of the Kemper County Coal Plant. KBR, a Texas-based company, was jointly responsible for the design and engineering plans of the plant with Mississippi Power and owned parts of the “Transport Integrated Gasification” technology, or “TRIG” technology at the core of the Kemper project. Yates Construction Company, based in Mississippi, was the primary construction contractor for the plant. KBR and Yates Construction have been replaced with a new firm, Performance Contractors of Baton Rouge, Louisiana.
“Today’s news that Mississippi Power has fired KBR and Yates Construction indicates a monumental meltdown at the Kemper plant job site,” said Louie Miller, Director of the Mississippi Sierra Club. “If the reports are accurate, for Mississippi Power to fire the co-owner and co-developer of their design technology is absolutely astounding. This will only lead to further delays, more cost overruns and likely litigation between aggrieved parties; all costs that Mississippi Power will try and pin on the ratepayer. This shocking development is one more reason it’s past time to pull the plug on the Kemper plant.”
Miller added, “It looks like Mississippi Power is changing horses mid-stream, and what’s worse, in statements from KBR officials, it looks like these companies have a different understanding of what’s happened. What does that say about the job Mississippi Power is doing managing this multi-billion dollar project?”
In recent months, Mississippi Power has faced multiple legal and financial challenges in building the Kemper County Coal Plant. In March of 2012, Sierra Club won a legal challenge in a unanimous ruling from the Supreme Court, which found that the Public Service Commission had not adequately justified its decision to allow the Kemper proposal to move forward and to charge ratepayers for its construction. In June, Independent Monitor reports revealed that the project was then $366 million over budget, a figure which has recently climbed to more than $454 million. Following this news and pending further legal challenges from the Sierra Club, the Public Service Commission voted to deny Mississippi Power’s proposed $56 million rate increase in a public meeting held June 22. Fitch Ratings then downgraded Mississippi Power’s credit rating.
Mississippi Power appealed the Public Service Commission’s decision to deny the rate increase, going directly to the Supreme Court. On July 31, the Court ruled that Mississippi Power could not institute a partial rate increase to customers while waiting for the Court to hear the full appeal.
“In testimony under oath, Mississippi Power’s Vice President Anderson could not guarantee the plant will work on day one, and today’s news raises even more doubts about this boondoggle,” said Miller. “The dirty, expensive, and unnecessary Kemper coal plant is now hundreds of millions of dollars over budget, with no end in sight, and the Supreme Court has stepped in and prevented Mississippi Power from raising rates to pay for it. Now that the company has fired the people who were designing this experimental plant, Sierra Club’s opinion is that we need to pull the plug on the Kemper plant.”