1 Oct

Kemper Plant Critics Propose Puzzling Vision

Given what we know about the Sierra Clubs activism nationwide, it comes as no surprise that the group would oppose a new power plant in Kemper County. After all, the Sierra Club is opposed in principle to the use of coal-fired power, and has even fought the construction of solar power plants and wind farms. Though they claim to be concerned about power customers, the Sierra Clubs opposition to the Kemper County plant is really just an extension of an impractical – and truly radical – philosophy: build nothing, never, nowhere.

Even the national media is becoming aware of the Sierra Clubs duplicity. The Wall Street Journal explained recently that “…having succeeded in banishing traditional coal-fired power from the future electric-power mix, the greens are now trying to scuttle any realistic alternative, even the clean coal they claim to support.”

Sadly, its not just the Sierra Club that is showing a lack of vision about Mississippis energy future. In recent editorial pieces, author and newspaper publisher Wyatt Emerich has criticized the Kemper County plant for costing too much, being too risky, and unfairly distributing the costs to electricity customers in Mississippi. The same criticism has been levied by Bigger Pie Forum Chairman Kelley Williams. Both men wonder aloud – without any real evidence to do so – whether the coal-to-gas technology employed at the new plant will ever work, arguing that Mississippi Power Company should have been forced to construct a natural gas plant instead.

First, there is nothing unproven or untested about the core technology that makes the Kemper County project possible. While its true that the plant will use a combination of technologies that hasnt been utilized together before, the component technologies themselves are working elsewhere, and they will work in Mississippi. Second, the rate increases that customers will pay – about 22% by the end of 2014 – are typical of what happens when a small market adds much-needed new generation. Customers in Mississippi saw similar rate increases, for example, when Plants Daniel and Watson came online more than 30 years ago to meet growing energy demand. Those costs are never welcome by the end consumer, who sees no appreciable difference when flipping the light switch, but they are necessary, especially considering that the Kemper County plant will be the first baseload power facility added to the utilitys fleet in 30 years.

Theres an even more troubling oversight, though, by critics of the Kemper County plant, including Emerich and Williams. They seem to live in a world where natural gas will always remain cheap, while decades of experience prove exactly the opposite. Instead of having Mississippi Power Company diversify its fuel mix, as it is doing with lignite coal in Kemper County, they would force the utility to chain its customers to the long-term price of natural gas. Keep in mind that 75% of the utilitys generation today already comes from natural gas. Instead of pursuing diversity, Emerich and Williams favor doubling down on natural gas. Instead of averting risk with a broader base of fuels, they would have Mississippi Power roll the dice and gamble their customers future with the hope that natural gas prices do what theyve never done: stay put.

You might expect this sort of advice from the Sierra Club, which famously took $25 million from the natural gas industry, but such advice from those who purport to care about customers is puzzling. In fact, following the vision of Emerich, Williams, and the Sierra Club is exactly what you would do if you were trying to create an energy future in Mississippi that created the maximum amount of long-term fuel risk and left customers as vulnerable as possible. Surely that isnt their goal.

Building a new power plant will always have its critics. Consider the case of Entergys Grand Gulf nuclear plant in the 1980s, which encountered the same sort of criticism as the Kemper County plant is enduring today. The price tag seemed high then, too, and the technology unfamiliar. Fortunately, regulators then eschewed the advice of critics by keeping the big picture in mind, instead of taking the easy path. They were visionaries who shared the same philosophy as the Mississippi Public Service Commission does today: that building a diverse portfolio and investing in new technology, as opposed to simply building the cheapest plant at the moment, is the best approach to protecting customers in the long run.