Miss. regulators ease restrictions on power plant

State regulators loosen restrictions on Mississippi Power's coal-fired plant

JACKSON, Miss. (AP) -- State regulators have loosened some of their earlier restrictions on Mississippi Power Co.'s proposed coal-fired electrical generating plant in Kemper County, including a decision that would let the company collect constructions costs from customers.

The Public Service Commission voted 2-1 Wednesday on the new conditions for the plant application.

Last month, the commission approved the application but with a lengthy set of conditions that Mississippi Power said would have made it impossible to finance or build the plant.

Spokeswoman Cindy Duvall said the company had no immediate comment on the decision. She said the company was going over the order and would issue a statement later.

The PSC told Mississippi Power its construction can be no more than $2.88 billion. The PSC said the costs could go no higher unless it could show that concrete, steel and other building costs went up. Last month, the PSC had capped construction at $2.4 billion.

Commissioners also agreed that Mississippi Power could pass on its construction costs to ratepayers, but not until Jan. 1, 2012. By then, the PSC expects the new power plant to be out of the ground.

Commissioners Lynn Posey of the Central District and Leonard Bentz of the Southern District voted for the modifications. Brandon Presley of the Northern District opposed it.

Presley said in a statement attached to the order that ratepayers "will have to bear all the risk of this project on top of having to pay for this project upfront. MPC ratepayers will begin paying for this plant before they get any benefits from it."

Bentz told WLOX-TV that the order "is an indication to the financial markets that they (Mississippi Power) can move forward with it."

"We put some regulations on them. But we did what we're supposed to do, protect ratepayers at the end of the day," Bentz said.

The Sierra Club has opposed the project as costly and unnecessary.

Mississippi Power is a subsidiary of Atlanta-based Southern Co. The plant it wants to build in Kemper county would use a new technology that converts a soft coal called lignite into a gas that would fuel turbines to create electricity. The lignite would have been locally mined. The technology is known as IGCC, or Integrated Gasification Combined Cycle.

Local and state officials have supported the project, touting economic development potential and job creation.

Mississippi Power says the plant would create 260 permanent jobs and 1,000 jobs during construction.