Mississippi holds hearing on power plant filings

JACKSON, MISSISSIPPI - Mississippi Power Co. has given the state a more detailed explanation of the need for a planned $2.2 billion power plant that it says will create 260 new permanent jobs, an attorney for the utility said.

Attorney General Jim Hood had requested that the state Public Service Commission ask the utility to provide more details on the proposal and to provide a legal reason why rates should increase to build the plant.

A 2008 state law allows the PSC to approve rate increases before companies build power-generating plants. Under the old law, a utility had to wait until a plant was operating before asking for rate increases to recover construction costs.

Sondra McLemore, a special assistant attorney general, told the board that her office was not attempting to delay the project. But the attorney general's office was concerned that Mississippi Power blended the certificate or application for the plant with the rate increase request.

McLemore said Mississippi Power "should not request that this commission make one all-encompassing decision as to the CCN (certificate) and to a rate treatment in such a broad and extremely important matter, particular without giving all of the information required."

McLemore also said it is not time to address any rate increase before the PSC decides the fate of the project.

Ben Stone, chief counsel for Mississippi Power, responded by saying the company had prepared "a very complete filing" for the commission and will work with regulators to provide any needed information. But Stone stressed the importance of moving forward quickly.

The company has received a $270 million grant from the U.S. Department of Energy and a $133 million in investment tax credits under the National Energy Policy Act of 2005.

Mississippi Power is part of the Southern Company, which includes Alabama Power, Georgia Power and Gulf Power. It has about 184,000 customers in the 23 counties of southeast Mississippi and announced in December 2006 that it was considering building the plant in east central Mississippi's Kemper County.

Besides the 260 permanent jobs, the utility says 1,000 jobs will be available during peak construction.

It would be a 582-megawatt integrated gasification combined cycle that converts locally mined lignite, or "brown coal," into a gas to generate lower-emission electricity. However, the clean coal technology is more costly and new.

And Entegra Power Group and Magnolia Energy, two independent power producers, and the Sierra Club have challenged the need for the lignite clean coal power plant. All three had attorneys at the hearing on their challenge. The PSC didn't make a decision.

Because Mississippi Power is the first to potentially use the new law seeking a rate increase, the PSC agreed more money might be needed for consultants before its ruling.