The Kemper power plant cost has now topped $7 billion. It has yet to produce electricity from lignite. If that day comes, there’s no way the plant will be cost effective.
Even if the cost is of lignite electricity is zero, the interest on the construction debt preclude anything remotely considered prudent.
So far, the Mississippi Public Service Committee has approved customers paying $1 billion in Kemper costs on the grounds that the plant is producing electricity from natural gas. This is about double what the PSC should have approved, but it is still $6 billion less than the cost of the plant so far. That’s a victory of sorts for ratepayers.
The three members of the existing PSC seem in no mood to let Mississippi ratepayers any more than that. That’s a good thing.
The Kemper plant’s critics have said from the start that the federal government should have funded this experimental plant instead of having one section of Mississippi pay for it. If this wildly expensive, experimental plant works, the technology will benefit the entire nation. The nation should pay for it.
Now it looks like that’s a possibility. Southern Company, the parent of Mississippi Power Co., is lobbying Congress hard to get tax credits for Kemper as a green energy pioneer. If successful, that would greatly mitigate the damage of the Kemper fiasco on the finances of Southern Company, which pays about a billion dollars a year in taxes.
Southern Company, based in Atlanta, is worth about $100 billion. It can easily absorb a complete Kemper write off. Mississippi Power, Southern’s subsidiary, is just a corporate shell to mitigate liability and serve as a financing vehicle. Mississippi Power’s solvency or existence is of little concern to Mississippi electricity customers. Therefore the Southern Company’s threat of throwing Mississippi Power into bankruptcy should fall on deaf ears.
