Kelley Williams, Chair Bigger Pie Forum, March 12, 2015
Will A Big Lie work here? Apparently Mississippi Power Company thinks it will put lipstick on its Kemper pig. Kemper is the company’s runaway experiment to turn lignite into a substitute for natural gas to make electricity. It’s building a gasifier to do it in Kemper County, but can’t finish it. The gasifier is years behind schedule and billions over budget. It’s possibly unsafe and unworkable. Its natural gas substitute will cost many times the real thing if it works. So will electricity made from it. Regulators haven’t approved it. But the company is collecting interest on its cost anyway. The Supreme Court said stop it and give it back. The company is stalling and telling customers the court is messing up the company’s good deal for them. That sounds like: A Big Lie.
The Big Lie originated in Nazi Germany. It worked there and in fascist Italy. It is still works in communist Russia and Cuba and Venezuela. It has worked in the USA. Obamacare is an example. It works when news sources and opinion leaders cooperate with political, regulatory, legal and business interests to mislead ordinary people and take control of targeted groups. It works if ordinary people are uninformed, indifferent, afraid, or just stand by while it overwhelms its target (e.g., Jews in Germany). Looks like Mississippi Power’s target has been its customers all along and now includes the Supreme Court. Why does the Big Lie work?
The Big Lie works because it is so preposterous. It sells easier than a little lie that common sense can see through. It sells if useful “authorities” say it’s true and if ordinary people defer to them and trust them. It sells if it is repeated over and over and if those opposing it are shouted down, intimidated, discredited, marginalized, denied a voice, or disappeared. Who are the useful authorities selling it? Is Kemper’s Big Lie big enough to defy common sense? Can the company sell it?
Useful authorities include experts, academics, powerful politicians, popular entertainers, famous athletes, and others who have a following. One useful authority who helped sell Obamacare was Dr. Jonathan Gruber, a MIT professor. He gave intentionally misleading “gruberized” testimony and was caught arrogantly bragging about it. Useful authorities often say misleading things. That’s why they are useful Kemper was justified by gruberized testimony predicting very high natural gas prices. That testimony looked ridiculous even then. But it worked. Useful authorities are usually well paid for snow jobs, shilling, and saying ridiculous things.
One authority shilling for Kemper is the powerful former governor who promoted it. He says it will be good for customers in the long run like Grand Gulf. That’s like Jefferson Davis telling Confederate veterans that losing the Civil War will be good for future generations. Grand Gulf is Entergy’s nuclear equivalent of Kemper’s gasifier. It took twelve years to build and went billions over budget. It cost too much for its original Louisiana and Mississippi customer base. So the cost was spread over the plant’s life, and Arkansas customers were shanghaied by the Federal Energy Regulatory Commission to help pay. That provoked a mini war between the states, years of litigation, and lasting hard feelings. Thirty years later customers are still paying 17% more for Grand Gulf and will until it’s decommissioned. Eventually its survivors like the Confederate veterans will all die. Then there will be no one left to question the governor’s revisionist history and pleasant fantasies about Grand Gulf. While he’s at it, the governor might fantasize a time machine so Kemper’s customers can just skip the first thirty years. No, make it a hundred years because Kemper is even more unaffordable than Grand Gulf. Its cost is greater, its customer base is smaller, and there’s no FERC to the rescue. Hey, no problem. Just gruberize those unpleasant facts away too. And go Back to the Future with Doc Barbour and redo history.
Is Kemper’s Big Lie big enough to work? Maybe. What the company says and doesn’t say is pretty preposterous. It says there will be a 40% rate increase if the the Supreme Court stands firm and rescinds the 18% rate increase for Kemper’s construction interest. It says the rate increase will be on the court even though it’s for the gasifier which is on the company. It talks like a rate increase is inevitable even though the PSC has not decided that the gasifier or any other part of Kemper is prudent and that customers will pay for it. What the company doesn’t say is that there won’t be a big rate increase if the gasifier is deemed not prudent. And it doesn’t say it’s really upset because the court exposed its scheme to hide the big rate increase for seven years and collect construction interest illegally in the meantime. And it doesn’t say anything at all about providing the much cheaper simpler alternative for customers: Kemper’s turbines running on natural gas.
A 40% rate increase is not preposterous. It’s just arithmetic. It will take more than that to pay for the $5.2+ billion gasifier. But blaming it on the Supreme Court is preposterous. And presuming the PSC will make customers pay for it is arrogant. And saying the court should reconsider to help customers is deceptive. And failing to provide the cheaper alternative for customers is malfeasance.
Can the company sell The Big Lie? Maybe. It might snow two regulators. It seems unlikely to sway another Justice. It probably will snow most customers. Here are some clues: If the PSC reneges on its order to delay prudence until the gasifier runs, look out. If the court grants the company a rehearing, look out. If Brett Favre shows up in a Mississippi Power ad, look out.
Meantime, there’s still hope for 186,000 retail customers in south east Mississippi.