Apr 29 - McClatchy-Tribune Regional News - Michael Newsom The Sun Herald, Biloxi, Miss.


State Attorney General Jim Hood is asking the Public Service Commission to delay approval of Mississippi Power Company's $2 billion coal burning plant in Kemper County until several legal questions he raised about the project are answered.

Documents he filed with the PSC question whether the three-member panel can approve such a venture "with the ratepayers taking the cost and technology risk." A measure passed in the Legislature last year gives utility companies power to increase rates to pay for new plants before they are built if the PSC approves. The new law allows the PSC to require power companies to return the money if such a plant isn't built, but it isn't automatic.

Hood's latest filing says the state is moving into new territory and officials should determine how the new law "fits together with traditional portions of the law" before it is put into action through Mississippi Power's request. Hood asked for a hearing to discuss the issues and the PSC scheduled one for May 5 at 1:30 p.m. at its Jackson office.

The company has asked to raise utility rates under the proposal, but Hood contends it hasn't made public the necessary information required to allow such an increase. In the 14-page document, Hood also wonders if the PSC must do its own assessment of the company's long-range energy needs before approving the proposal. He also questions whether the PSC has the authority under state law to approve a what he calls "a chemical manufacturing plant" for synthetic natural gas, carbon dioxide, sulfuric acid and ammonia.

"Our duty is to assure that the law is being complied with and this is a new area of the law for us all," Hood said. "Our primary concern is that the commission have all the documents filed that are needed to make a learned decision about this particular facility and also that those documents are filed publicly."

But he said the company has been working with his office and he doesn't expect any issues that will put the project in jeopardy.

Mississippi Power spokeswoman Cindy Duvall said company officials hope to address Hood's issues with the project at the hearing.

"We certainly respect the right of the attorney general to do his job," Duvall said. "But we hope that on May 5 when we have the hearing in Jackson we will alleviate some of the concerns that the attorney general has surrounding the Kemper County project."

On Tuesday, Mississippi Power was still working on its official response to Hood's concerns, which was due to the PSC today.

Southern District Public Service Commissioner Leonard L. Bentz said Tuesday he hadn't seen Hood's filing yet. He said the PSC will use consulting firms to help them with the complicated application. He said the bill for those services is expected to be around $500,000, but the law requires Mississippi Power, not taxpayers, to pay for the work.

"If it takes $1 million to get the right decision, I am willing to spend it," Bentz said. "We have an obligation to the ratepayer to do the right thing."

The "Baseload Act of 2008" was approved after much debate and the creation of a state House select committee last year. Officials from Mississippi Power said at the time that they needed the coal-burning plant in Kemper County, or the company couldn't meet projected energy needs in the summer of 2013. Raising rates up front is the only way to get the money and the bill was needed to avoid a much higher rate increase later, they said.

Opponents of the Baseload Act said consumers might be stuck with higher bills even if a power company decides not to go forward with expansions. But Mississippi Power officials said when the bill was approved that it wasn't likely the company would move forward with rate increases and then scrap the high-tech plant, because the company could lose substantial capital investments.

In a lawsuit filed in December 2008, Hood accused Entergy -- one of the other companies that asked for Baseload Act -- of overcharging Mississippi ratepayers for their power, which the company has denied. The case against the Louisiana-based company hasn't gone to trial.

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