Then and Now: Mississippi Power in line for another Credit Downgrade after Kemper Cost Continue to Skyrocket

RFP gets the credit for this post for doing most all of the legwork gathering these blasts from the past. First up is the latest from Moody’s Investor Service.

Moody’s Investors Service placed Mississippi Power Company’s ratings on review for another downgrade after the company last week announced a ninth extension for placing the now $7 billion Kemper energy facility into service using lignite. ~ Mary Perez 2-6-17

“There’s a big capital cost, I get that, but the energy coming out of this technology will be super-cheap,” Fanning said.He said Kemper’s technology, which would capture carbon dioxide and other byproducts and sell them to other users is “a home run, not only for the state of Mississippi but for America and the world.” ~ Tom Fanning, Chairman and CEO of Southern Company

Bonus quote from the above article:

Former New York City Mayor Rudolph Giuliani, Republican U.S. Rep. Gregg Harper and others attacked President Barack Obama’s administration and environmentalists.

Giuliani said those opposed to burning coal and drilling for oil are “living in some kind of ideological dream world that makes sense only to you.”

“As long as I’m governor, Mississippi is going to have an energy policy, and our energy policy is more American energy. It’s projects like these and efforts like this that will help us (economically), not only now, but in the long term. . . This is going to produce reliable power for Mississippi for decades and decades to come.” ~ Former Mississippi Governor Haley Barbour

Bonus quote:

But Barbour praised the plant for its relative eco-friendliness, saying, “The Left said there’s no such thing as clean coal — Well, this is it!”

Bryant “repeated his support for the plant in an interview with The Associated Press. Bryant has previously said the plant, with its plan to gasify soft coal mined nearby, is an important element of an energy policy for the state”I think we’ve gotten a strong show of support from the Legislature, but the most important point to me is carrying through with our responsibility to the people who work there,” Bryant said. “Hopefully, this will keep the cost of energy low in the future.” ~ Phil Bryant

What about your responsibility to the ratepayers that are taking it without Vaseline Phil?

Bonus quote:

“We applaud Governor Bryant for his leadership and for recognizing the importance of this legislation to our customers,” Mississippi Power President Ed Day said in a statement. “The bills will save Mississippi Power customers more than $1 billion over the life of the facility.”

“Installation of the gasifier marks a pivotal point in the construction phase of our project and the advancement of 21st century coal technology,” said Mississippi Power Vice President of Generation Development Tommy Anderson. “The electricity produced from this state-of-the art facility will have significant customer and environmental benefits. ~ Tommy Anderson

Haley Barbour was the prime original Kemper advocate. The whole party followed suit. Kemper is a Republican gig and the party will pay a high price for its support. ~ Conservative Columnist Wyatt Emmerich

Bonus quote:

Meanwhile abundant natural gas from fracking is available at very affordable prices.

To put this in perspective, the entire discretionary budget of the state of Mississippi is about five billion. Kemper could easily end up costing an extra $300 million a year – almost six percent of the entire Mississippi general fund budget.

There is one glaring problem with the upcoming PSC prudency hearings. They are premature. Kemper won’t even crank up for another couple of years. After that, it will take another several years of experimenting and re-engineering before its failure becomes clear.

It is possible – if not likely – that Kemper’s operating costs will exceed that of a natural gas plant. If that happens, then Kemper will have wasted the difference between its $4.5 billion price tab and the cost of a used natural gas plant – about $4.25 billion. Put another way, that’s $25,000 per household down the drain.

And this from late 2015:

In the teleconference last week, Fanning said Mississippi Power had been able to save customers $15 million because it “displaced other higher cost methods of generation.”

Asked by the Mississippi Business Journal for an explanation, the company said in an email:

“The Southern Company actively manages fuel costs using a system of economic dispatch – meaning we use fuel that is most cost effective for our customers.” Mississippi Power has a coal-fired plant in Jackson County.

Fanning said the plant should start producing syngas by the fourth quarter.

And finally a Boss Hogg bonus quote on another government sponsored taxpayer fleecing in KiOR.

“This is an unbelievable accomplishment, and it”s a game changer for our country,” he said.

Barbour recalled when the idea was first presented to him. The notion of turning wood chips and agricultural waste into fuel sounded like the alchemists of old claiming they could turn straw into gold.

“It”s almost like making gold out of straw,” Barbour said of the technology, which reduces nature”s process of breaking down biomass over the course of decades into a matter of seconds.

3 thoughts on “Then and Now: Mississippi Power in line for another Credit Downgrade after Kemper Cost Continue to Skyrocket”

  1. I think you’re being unfair to Haley. After all, why should turning coal into power or straw and “ag waste” into gold seem so unlikely? He and his crowd have been turning bullshit and hot air into cold, hard cash for many years. And the funny part is that the ordinary “non-connected” taxpayers of MS (and via Fed funding, the whole US) are the ones actually exchanging the bullshit and hot air for their own money.

    Here’s some tips for those interested in looking into the situation: WHY have there been so many cost overruns, WHO got the money that was spent, why were such patently ridiculous natural gas prices used in the (publicly-shown) cost comparisons and who really cares (and who doesn’t give a damn) if credit ratings are damaged? For bonus points, look into other medium-to-large Mississippi financial hijinks, like tobacco money actually paid to the state, Katrina funds, PERS, SRHS, BP money, etc. and look for common participants, including – and more importantly – the tertiary players (no, Haley didn’t get all that much money, considering the total amount “selectively directed”).

  2. Nun ya if you know who is rhe big fleece of the Taxpayers, please share info. And why hasn’t the Federal government stepped in and stopped these crooks? And further, why is it still continuing? ( i.e. SRHS, DMR, Bay St Louis, purchase of “oyster facility” from someone’s rich friend). Who is leading his train, and for what purpose? Surely such blatant thievery is not occurring without exponential risks. And why are there no checks and balances in place? Stacey Pickering comes to mind.

  3. Stacey Pickering is an idiot, just like his cousin, and yet, until these idiots get caught (literally, sometimes) with their pants down, you folks just keep right on electing them. You folks stand around pissing and moaning about corruption, but the folks doing the stealing know it is extremely unlikely you’ll ever actually DO anything. The only way any of this bullshit will ever stop is if the good people of Mississippi get off their lazy fat asses and actually DO something.

    For example, gather a group of folks and knock on doors, call _and_ write _as a group_ and raise (firm but polite and sane) hell with the federal “Law and Order” departments (just like on TV: those that investigate as well as those that prosecute the crimes) and your US congresspeople (House and Senate) and copy the local, regional and national newspapers, TV and radio. In the case of the Kemper debacle, call the aforementioned as well as the SEC, the WSJ, Bloomberg, etc. – get the stockholders of Southern Company nervous, curious and pissed and you’ll have something. As to all the local thievery, again, the aforementioned as well as the US Attorney’s Office, the FBI, the IRS, Inspector General, FEMA, etc., etc. Build a grassroots base and don’t sound like a bunch of angry nuts or conspiracy theory wackos, but rather, decent honest citizens who are sick of taking it up the whatzitz. When election time rolls around, work for a change – again, build a grassroots base and knock on doors and otherwise reach people and ask them to help get more people, etc., etc.

    The crooks in BSL (and all over the rest of the state) didn’t get into office by force – those that bothered to vote VOTED THESE CROOKS IN. And often as not, they did so time and time again. You want to get rid of these aholes? Stop electing them would be a YUUUUUGE step in the right direction.

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