Mississippi Power wins reprieve on Ratcliffe regulatory approval

The Mississippi Public Service Commission on March 30 passed an order authorizing Mississippi Power to proceed with the construction of the Kemper County (also known as Ratcliffe) IGCC power project.

The commission said in a March 30 statement that it has the authority to authorize temporary acts and operations of a utility, if such acts are in the public interest. The cost of construction delays would significantly increase the costs of the project, and ultimately to ratepayers, the commission noted. Allowing rapid accrual of construction costs prior to a final ruling on a Certificate of Convenience and Necessity for the project could threaten Kemper as a viable generation option.

Commissioner Lynn Posey stated: “Since a decision on a certificate for Kemper has not yet been settled, this is the most reasonable decision we could make. Even a temporary halt to the construction on the Kemper County IGCC project would translate into millions of dollars in added costs. We needed to act quickly to minimize the costs to ratepayers.”

This decision was not unanimous. Commissioner Brandon Presley said in his own March 30 statement: “For the third time in less than two years I have voted against the most expensive project in Mississippi utility history along with the approximate 45% rate increase that goes with it. Customers of Mississippi Power Company should not be required to bear all the risks for untried technology and be forced into historic rate hikes. Because Mississippi Power Company has already committed well over $2 billion to this plant, they have now placed their customers in a ‘too big to fail’ scenario.”

The Mississippi Supreme Court had dealt a setback to Southern Co. (NYSE:SO) subsidiary Mississippi Power in a March 15 decision. The Mississippi high court ruled in favor of a legal challenge brought by the Sierra Club against the utility’s in-construction $2.88bn Ratcliffe integrated gasification combined cycle (IGCC) power project. The 580-MW facility would be fueled by locally-mined lignite coal and much of its CO2 would be captured for use in enhanced oil recovery. Southern hopes to see the power plant completed and in commercial operation in 2014.

In a two-page decision, the state’s highest court found that the Mississippi PSC had not issued findings that were supported by substantial evidence in sufficient detail. As a result, the state Supreme Court reversed an earlier affirmation of the project by the Chancery Court of Harrison County. The case was remanded to the PSC for further proceedings.

“We are confident there is substantial evidence in the record to support the Commission’s approval of the certificate,” a utility spokesperson had said March 16. “It is our hope and expectation that the commission will address this expeditiously.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.