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!”

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

Letters to the Politicians and Others: A Good Longread

It all started innocently enough with an email to Treasurre Lynn Fitch by Port Policy Wonk Dan Norfleet:

Good Morning Treasurer Fitch:

Edison Chouest Offshore learned to create subsidiaries to be responsible for repaying the money when the jobs do not materialize. Failing to do this in Galveston cost the company $9 Million and could have cost tens of millions of dollars more: Louisiana offshore firm owes Port of Galveston $9 million. Anything built in Mississippi will not be an Edison Chouest project, but will be “LaShip” or “TopShip,” or “MyShip”—a newly formed corporation with no track record and virtually no chance of making good on its promises but trading on the past record of Edison Chouest. As usual, the MDA is being played. This is just another making-energy-out-of-mud project that will put Mississippi further into the economic hole.

Never one to waste a good link I clicked the link in Dan’s email and ended up liking the story so much that, despite it being several years old, Slabbed put it out on Twitter.1 It was recognized as a quality link in short order by Lee Zurik’s investigative assistant Tom Wright.

The bottom line is the Chouest family well learned its lesson from its Galveston experience in 2006:

Could Topship end up in the same boat as Louisiana affiliate? ~ Anita Lee Continue reading “Letters to the Politicians and Others: A Good Longread”

Kemper County Power Plant a disaster: Southern Company wants to stick you with more (cow)bill

And when the costs get passed along with the parties in charge bearing little financial risk it is no surprise to see a chart like this one. The runup into the latest earnings release is especially interesting.

Kemper County power plant price tag tops $6.1 billion as costs climb again, start-up delayed ~ Associated Press

I’m going to be spending some time on Edgar learning more about this mess for myself.  I see stockcharts like the one linked above against the backdrop of these massive cost overruns at Kemper County and the term moral hazard immediately comes to mind. In layman’s terms, it is easy to take risks when someone else bears a disproportionate share of the financial burden.

Stay tuned because this is likely not the last of the bad news form Southern Company and the Kemper coal boondoggle.

The Sierra Club issues a PR promoting House Bill 842 / Senate Bill 2569

Jackson, Mississippi As the movement against the Kemper County coal plant continues to grow, Mississippi State Representative Jeff Guice (R-Ocean Springs) and Senator Albert Butler (D-Port Gibson) have introduced bills to repeal last year’s legislation authorizing Mississippi Power Company to issue bonds and force customers to pay for them. The law enabled Mississippi Power to issue up to $1 billion in bonds to offset the skyrocketing cost overruns at the Kemper County coal plant, an experimental facility that is currently months behind schedule and more than double its original cost estimates.

“One year after the Legislature was misled by Mississippi Power on the true costs of the Kemper boondoggle, the chickens have come home to roost,” said Louie Miller, state director of the Mississippi Sierra Club. “Since last year, Mississippi Power has taken us deeper down the rabbit hole, with the Kemper plant’s price tag now exceeding $5 billion dollars, making Kemper the most expensive coal-fired power plant ever built in the United States on a per kilowatt basis. Hard working Mississippi families should not have to pay for the bad business decisions of Mississippi Power.”

The 2013 legislation was filed just days after the Mississippi Public Service Commission announced a settlement agreement with Mississippi Power to resolve disputed rate increases to cover the runaway costs of the plant. The Mississippi State Legislature approved the legislation, and Governor Phil Bryant then signed it into law. The new law gave Mississippi Power the authority to issue up to $1 billion in bonds to cover cost overruns at the Kemper plant, to be financed through a separate charge on customers’ monthly electric bills. Continue Reading……………

Today’s feature personal ad: Are you tired of getting screwed by Mississippi Power

Since Barbara was brave enough to bring up perversion and the gender divide I reckon I’ll be brave enough to link to the following personal ad, which I’ve been holding for a while. (H/T Anonymous with standard disclaimer caution to those with a Heart Conditions etc about clicking that link above because it is a wild wild wild world out there):

Are you tired of getting screwed by Mississippi Power.

By twotired2sleep on Friday, November 22, 2013 – 11:50 pm:

Then I have just the cure. F&^k one of their VP’s wife. She is almost ready to divorce his red headed ass and now she wants some real [email protected] The only catch is Continue reading “Today’s feature personal ad: Are you tired of getting screwed by Mississippi Power”

The Best Cadillac Corporate Welfare Package Taxpayer Money can buy: Brought to you by Barack Obama and Southern Company

And the best part folks is everyone one of us in Mississippi that buys electricity from Southern Company gets stuck with the difference between what Obama didn’t give ’em and the final cost of the project, now estimated at $4.2 billion. According to the good folks over at the Bigger Pie Forum think tank the average Mississippi residential ratepayers electric bill will go up about 61% to pay for the boondoggle, an increase of $76/month. I mention this because: (h/t RFP in comments)

Kemper County power plant, oil producers find political sweet spot for Obama with ‘carbon capture’ technology ~  Dina Cappiello Associated Press

So folks, for those of you that will not be bankrupted by the NFIP rate increases will need to dig deeper to keep the lights on. I wonder what rocket scientist dreamed up the idea of sticking the poorest state in the union with the cost of President Obama’s environmental policies?