Jackson Free Press

Read the Public Service Commission's Order (PDF)
Read JFP's earlier coverage of Kemper coal-plant controversy

The Mississippi Public Service Commission today approved a January 2009 petition by Mississippi Power Company to build a new $2.5 billion experimental coal gasification plant in Kemper County this afternoon, but only under conditions that apparently made it too difficult for the company to finance the construction of the plant. The company announced later in the afternoon that is dropping plans for the plant.

"…[T]he commission finds that MPC's request for a facilities certificate, in its original form and as supplemented, does not satisfy the 'public convenience and necessity' requirement," commissioners wrote in their April 29 decision. "Having weighed all the potential benefits and costs, the commission finds that the proposal contains too many uncertainties to justify the ratepayers bearing the risk of these uncertainties in full," the PSC's order stated.

One of the conditions capped the cost of the construction of the plant at MPC's original 2009 estimate at $2.4 billion—a difficult requirement considering the power company has never determined an exact price of the 582-megawatt facility for the commission. In March, however, MPC proposed to cap costs at $3.2 billion, amounting to a 30 percent potential increase over the company's original $2.4 billion estimate.

The other condition demanded that all incentives the company claims to be available through federal grants, loan guarantees and tax credits be verified, so as to avoid raising the cost of the Kemper County facility to Mississippi Power customers, who would have funded the construction through rate increases. Another condition was that the company get all its required environmental permits in order, while a fourth condition demanded the company continue proving the cost-savings of the project starting May 2011.

Commission Chairman Brandon Presley voted against the permit, arguing that the company and the commission "should wait until many of the uncertainties in this case are better known and therefore have a clearer picture of what resource … would best serve the public interest."

"Other options exist for the company in the interim that involve less risk to MPC customers than those posed by this project, at this time," Presley wrote.

After Mississippi Power's announced it would drop the plan, Mississippi Sierra Club Director Louie Miller praised the PSC's decision, which he said ultimately doomed the plant. "I think the Public Service Commission agreed that the plant was dirty, expensive and unnecessary," he said.