Planning for the future

By Anthony Topazi / guest columnist

April 06, 2008 12:31 am

— For more than 80 years, supplying the energy needs of our customers in the most safe, reliable and cost effective manner possible has been our obligation and mission. When you turn on a light switch or adjust a thermostat, you expect the power to be there at a cost that is reasonable.
We must plan for the future when it comes to building power plants and other infrastructure to serve our growing region of the state.
Mississippi Power must build or purchase new electric generating capacity in the near future to be able to meet our customer’s growing demand for electricity. This requires that we present for review to the Mississippi Public Service Commission our best source of cost-effective generation capacity that meets customer demand. The proposed advanced clean coal gasification facility in Kemper County appears at present to be the most cost effective and environmentally responsible way to meet our obligation.
Mississippi lignite coal, an abundant natural resource in our state, is by far the least-cost fuel alternative. Without it, we would have to consider a more costly fuel such as natural gas. As a fuel source, the price of natural gas is extremely expensive and volatile. It costs 400 percent more than lignite today. Using lignite instead is projected to save customers approximately $3 billion over the life of the plant. In addition, lignite helps us to be more self-reliant and less dependent on fuel sources from foreign countries.
Generating plants are expensive and take years to build. Senate Bill 2793 does not relieve Mississippi Power from financial risk. Mississippi Power will invest half of the money required to build a facility in Kemper County. The other half must be financed through borrowed money from a bank or other financial institution. The legislation provides the credit worthiness necessary to borrow the money at very reasonable interest rates, saving our customers substantial amounts of money - more than $900 million in financing costs.
Our state legislators are not voting for a rate increase. They are not voting to build a power plant. Senate Bill 2793 merely provides the authority and tools needed by the Public Service Commission to conduct interim reviews during construction and to make determinations regarding the prudency and recovery of construction costs.
Without this legislation, the Kemper County project cannot proceed. Without this bill, we will lose access to the lowest cost power source. We will lose the jobs that would be created from the construction and operation of this plant. And we will lose the ability to attract major economic development projects to Mississippi. But, more importantly, we will not meet our obligation to our customers because we will be forced to buy more expensive power from other states or more expensive power generated from other sources. A low-cost fuel source that is available in our state will go to waste.
Other competitor states such as North Carolina, South Carolina, Florida and Louisiana have provided their Public Service Commissions with similar tools to allow for the construction of base load generation that provides affordable power for their citizens.
Without action by the legislature on this bill this year, our customers will pay more and Mississippi will be left behind.

Anthony Topazi is President and CEO of Mississippi Power.