The Mississippi Public Service commission has again delayed hearings on whether Mississippi Power should be allowed to pass some of the costs of its multi-billion dollar coal plant onto its customers. They will now make the decision after the Kemper County facility goes online in 2015.
For the second time this year, the state Public Service Commission has delayed a hearing to decide whether Mississippi Power spent its money wisely during the construction of company's new $5.5 billion Kemper County Coal Plant. The panel was originally supposed to make the decision in April, and then again in September.
But at its monthly meeting in Jackson yesterday, commissioners again delayed the prudency hearing until after the plant becomes operational next year. Commissioner Steve Renfroe says the hearing will determine how much of the plant's price tag Mississippi Power can pass on to its rate payers.
"There are performance criteria that have to be met for Mississippi Power to recover the entire cost that's allowed." says Renfroe. "Prudency is our test for deciding whether or not it's recoverable. If it's prudent and it's a cost that can be justified then it can be recovered. If not it can't be in rates."
When Mississippi Power began construction on the new coal gasification plant in 2010, it had an estimated cost of roughly $2.8 billion, but over the past four years those costs have skyrocketed to over to $5.5 billion. Those over runs have some concerned that Ashby Foote is the president of Bigger Pie Forum, an economic think tank based in Mississippi. He says Mississippians shouldn't be forced to pay for an experiment that may not work.
"If they can't prove that it runs in an efficient manner then we don't think the rate payers should have to pay for it, and that Southern Company, the parent of Mississippi Power, and Mississippi Power responsible for the cost they incurred in their experimental plant." Foote says.
Despite Foote's concerns, Mississippi Power Representative Jeff Sheppard feels confident that the plant will produce electricity efficiently and successfully.
"We are working every day to make that happen." says Sheppard. "We believe all of the costs that have been incurred during the construction and procurement, design, start-up of Kemper are prudent, and honestly, we look forward to taking part in the proceeding now when the plant goes into service."
Sheppard went onto say the plant should become operation sometime in the first half of next year.