Supreme Court lowers the boom on Kemper plant

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Let the Southern Company pay for this boondoggle. It was their idea from the get-go.
By Wyatt Emmerich | | February 18, 2015
When Tom blanton walked into Hattiesburg’s Keg & Barrel, his usual place to get a burger, the place erupted. People were standing and cheering.

For good reason, because of Blanton’s lone ranger lawsuit, Mississippi Power Company (MPC) will have to return $276 million to 186,000 customers. That’s an average check of $1,483 for the ratepayers of southeastern Mississippi.

I called Blanton a few hours after the Mississippi Supreme Court voted 5-4 in his favor.

“Can you believe it,” he exclaimed. “You need to be writing about the long-hair hippie redneck who crawled out from a trailer house in the trailer park and rose up like a fire breathing dragon.”

That’s typical Blanton, poking fun, laughing and never tiring of his attempts to take down the high and mighty when they run roughshod over consumers.

Blanton is an independent oilman who has met with some success, but he is about as salt-of-the-earth Mississippi as they get.

Blanton will talk your ear off. He’s exceedingly upbeat and friendly. And, most of all, exceedingly smart. He saw the Kemper boondoggle a mile away and has spent $150,000 of his own money to keep consumers from footing the bill for this boondoggle.

Kudos go to his lawyer, Michael Adelman. They used super bright young students fresh out of law school to keep the cost down and the quality of the legal work high.

Talk about a David versus Goliath victory. This is about as amazing as it gets.

On a more serious note, Blanton told me the “big takeaway” was this:

“The baseload act transformed the Public Service Commission from a regulatory body to a financial institution of last resort. This was such a radical liberalization of the role of that governmental agency, that the PSC quit paying attention to the needs of the customers.”

“You can chalk this up to the liberal banking practices of the Fed, the government, JP Morgan and irresponsible bank lending,” Blanton said.

I asked Blanton what motivated him to file his lawsuit.

“I’m not the kind of guy who is going to allow somebody to take my money and give me nothing in return. I was taught that was stealing,” Blanton said.

Blanton has been involved in various environmental issues since 1977, when he helped lead the battle to stop Mississippi’s underground salt domes from being used as a nuclear waste site. He fought the original Red Hills conventional lignite plant in Ackerman as well.

Florence Fulgram couldn’t get the Audubon Society, the Sierra Club, the Nature Conservancy or anybody to help fight the lignite plant.

“She called me one night crying, saying ‘Mr. Blanton, everybody tells me you’re the only hope I have on earth.’ I said ‘Oh no, the Lord is coming.’ She said, ‘I’m not talking about that. I’m talking about this damn coal mine they’re trying to build behind my house.’ So I did help her and we shrunk the mine size down from 18,000 acres to seven. It was me and Florence and that was it.”

The majority decision was written by Michael Randolph and joined by Ann Lamar, James Kitchens and Leslie King. Randy Pierce concurred but wrote his own opinion.

Jess Dickenson wrote the minority dissent and was joined by Chief Justice Bill Waller, David Chandler and Josiah Coleman.

Randolph wrote a big picture decision. He reviewed the history of government sanctioned monopolies, pointing out that the main goal of regulatory bodies such as the PSC is to make sure customers are charged a fair price.

Randolph concluded that the PSC did not follow the law, held secret meetings, did not properly notify ratepayers and failed to fulfill its duty to the consumers.

“The private meetings clearly violate the statutes governing the Commission,” Randolph wrote. “The public has a right to see and hear its business being conducted.”

Elsewhere in the opinion, Randolph wrote, “No legal authority existed to increase the rates. Ratepayers should not be bound by decisions made by the Commission which do not comport with the laws of our State. This court will not condone forced payments for rate increases not authorized by the Act or existing law.”

Dickenson’s dissent essentially maintained the PSC’s errors did not rise to the level of being arbitrary and capricious and should not be overturned by the court. It is a conservative opinion, expressing the belief that the legislature and its agencies should not be second-guessed by the courts.

Randy Pierce’s separate decision, supporting the rate refund, was even stronger than the majority decision. Pierce wrote, “What the Legislature has left in place with the Base Load Act is the Commission’s duty under Sections 77-3-33 and 77-3-43 to establish a fair, just and reasonable rate base, which requires the Commission to consider and balance the interests of the utility company, its investors, and the ratepayers. Exploitative rates are illegal in Mississippi.”

The court-ordered refund will be a big boost to southeast Mississippi, infusing the economy with cash. Imagine the permanent setback to that area for the next 40 years, if ratepayers are forced to foot the bill for this $6.5 billion science experiment.

If the federal government wanted to fund an experimental power plant using lignite and gasification, then it should have funded Kemper on a national basis. To make one area of the poorest state in the nation foot the entire bill is grossly unfair.

Ironically, MPC didn’t even need to build a new plant. As stated in its annual report, it had 20 percent more generating capacity than its all-time peak load. The Daniels coal plant on the coast is getting EPA approved scrubbers and the Watson coal plant is being converted to natural gas. No plants are being lost, so why the need for a replacement? And don’t forget, MPC can buy power through the grid from all over the Southeast. The diversification argument was utterly false.

MPC predicted natural gas would be $12 by now, projections twice as high as those of the U.S. government. Today, gas is $2.50. No wonder MPC fought in court to keep those projections secret. On what basis did they make their absurd (and hugely wrong) projections? This question must be answered.

MPC gets a guaranteed 12 percent return on whatever they “prudently” build. That’s why Kemper was foisted on us by a governor whose company made millions in lobbying fees from the plant’s ultimate owner.

It is becoming increasingly unlikely that Kemper will ever start up. And if it does, the cost of producing lignite syngas will be five times higher than natural gas, so why even try? It is hard to put into words the magnitude of this colossal failure. The hubris of the Atlanta execs and their confidence in their ability to screw the poor Mississippi rednecks is breathtaking. They should lose their jobs.

The battle is far from won. Mississippi needs to elect two new PSC commissioners who will ensure Kemper is deemed “imprudent” and definitely NOT “used and useful.” Otherwise, the rate increase will be at least 45 percent, an economic disaster for our state.

Let the Southern Company pay for this boondoggle. It was their idea from the get-go.

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