Mississippi Power’s Kemper County Lignite Plant boondoggle is in the news again. A whistleblower named Kelli Williams (no relation) says company officials lied to get $382 million of federal money for the $7.5 billion failed experiment. She’s suing Mississippi Power and its Southern Company parent under the False Claims Act. She’s seeking $1.1 billion in treble damages.
She was a Southern Company construction manager assigned to the Kemper project. She had a ringside view of the coverups. Actually, she was in the ring until the company kicked her out – she says for trying to tell the truth.
She says company officials lied about construction delays and cost overruns and withheld information from federal officials and the Mississippi Public Service Commission – information that would have jeopardized federal funding and the PSC’s authorization to build the plant. She filed the suit in 2018 under seal to allow review by the Department of Justice. The DOJ turned a blind eye, and the suit was unsealed late last month. The companies have not yet responded in court.
Bigger Pie didn’t have a ringside seat. But we smelled a rat and hired an expert to analyze the project. He confirmed our suspicions. We tried to expose the project’s lies. We wrote over 50 articles about it. We met with low income customers who struggled to pay their pre Kemper electric bills. We met with Mississippi Power’s CEO who gave us a tour of the construction project to allay our misgivings. It created more misgivings. We met with PSC Commissioners. One shared our concerns. The others were oblivious.
We met with the Public Utilities Staff Executive Director (now retired) and the then new Governor (also retired now) to explain the risks of the experimental gasifier and the out-of-control project management. The PUS is the nominal watchdog of the PSC. The Legislature created it in the wake of Grand Gulf scandals which sent two PSC Commissioners to prison. Now it’s a sleepy watchdog pet of the utilities. Its Director heard our concerns about the utilities’ lies and bemusedly said : “They never lied to us before.” And did nothing.
The PSC failed to do its job year after year. Its job is to see that customers get affordable reliable electricity. Commissioners and the appointed PUS executive director, and staffers come and go. Just passing through. They defer analyses about the need for, the reliability of, and the cost of electricity to the utilities. They seldom seek or heed independent advice. They have relinquished their authority. The utilities have usurped it.
Truth is, the utilities have the PSC on a leash. They have captured the commission that’s supposed to regulate them – and protect customers from their monopolistic abuses. Government granted monopolies. They have powerful allies: hustlers who promote unneeded uneconomic plants, contractors who build them, equipment vendors selling to contractors, etc. And politicians and federal agencies who throw taxpayer dollars and tax breaks at green fantasies. How many green fantasies have trusting regulators blessed? Kemper’s experimental gasifier was the first of many. It’s still the biggest. But the total cost of many smaller green solar fantasies’ may be more than Kemper’s. And do more harm to customers.
Those helicopter tax dollars and subsidies aren’t free. They have real costs for captive, voiceless residential customers whose electric bills go up. The PSC approved a 15% rate increase in 2018 for a retrofitted remnant of the Kemper fiasco. It was retrofitted to run on natural gas – not syngas Kemper was supposed to produce from lignite. That 15% increase is just earnings peanuts for the Southern Company (Mississippi Power’s parent). But it’s not peanuts for Mississippi Power customers who struggle to pay their electric bills.
The PSC approved the shutdown of Mississippi Power operating power plants to make room for the Kemper retrofit’s electricity. There was no demand for it otherwise. The PSC made customers pay twice for Kemper’s unneeded electricity. First time in 2010 when it authorized construction. And the second time in 2018 when it put the Kemper retrofit in the rate base. Why?
The first time the PSC caved to strong political pressure. The U.S. Secretary of Energy said Kemper would make dirty coal clean (i.e. green), reduce global warming, save the planet. Coincidentally, he’s revolved from the DOE to the Southern Company board.
A popular Mississippi Governor also flogged Kemper in the name of jobs, fuel diversification, investments in the state, world-changing clean coal technology, economic development, etc. He also appointed two interim commissioners who voted for Kemper.
Alas, many high paying construction jobs went to skilled workers from Alabama. The gasifier to produce synthetic natural gas from low grade coal (lignite) wouldn’t work. Capital expenditures went mostly to out-of-state equipment suppliers. The world doesn’t want Kemper’s unworkable technology. It was a gigantic boondoggle – most expensive non-nuclear power plant project ever.
The second PSC approval for unneeded power was a face saving attempt to salvage something from the Kemper debacle. If the PSC had done its own analysis of system supply and demand as required by law, it would not have approved Kemper initially – because there was no customer demand for its electricity. And it would not have approved the Kemper remnant retrofit.
The PSC’s statutory duty is to make independent assessments of customer demand and utility projects proposed to meet that demand – and approve only those projects that assure affordable reliable electricity. It failed. It rubber stamped political projects. The PSC’s failures mean more expensive and less reliable electricity. This leads to slower economic growth, hardships for low income customers, and more risk of service outrages (from intermittent solar) for all.
Will things change? Maybe. When the Hinds County votes are counted, there may be three new Commissioners. Will they assert their authority – do their jobs? Will the Governor appoint a competent professional PUS Executive Director?
Change won’t be easy. Utilities and their powerful allies will resist. It’s hard to restore lost power. But not impossible. We hope.
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