Friday, February 1, 2013

Here we go again.... The Kemper edition

I guess Steve Holley, Tim Ford, and the folks over at Government Consultants are hurting for money as Senator Terry Burton introduced a bill that will issue $1 BILLION in BONDS for the Kemper plant if enacted into law.  The bill passed out of the Senate Energy Committee.  SB #2755 states:


"SECTION 4. The following shall be codified as Section 77-3-113, Mississippi Code of 1972:

77-3-113. (1) Subject to the agreement by the affected electric public utility, the commission shall cause to be financed, consistent with the procedures set forth in this article, all qualifying facility costs found to be prudent by the commission that are incurred over the estimate of such costs presented by the electric public utility in the certificate proceeding for the qualifying facility, up to a maximum of One Billion Dollars ($1,000,000,000.00). To accomplish the goals contained herein, the commission shall enter a financing order authorizing the issuance of rate reduction bonds by an electric public utility and to make such other findings and determinations as are provided for in this article
."

Yup. the Bond Cartel at Balch and Butler Snow must be high-fiving each other right now and calling up the realtors in Baldwin County. Ruth's Chris will probably jack up its menu and add some extra fine wines when this bill passes. Didn't the Fraziers have some memberships in hunting clubs and country clubs to sell? Bond counsel fees. Underwriting fees. Review fees. Bond therapy fees. Vann Leonard is probably ready to hang himself after he realized he was practicing the wrong area of law. Then little things like interest and other additional costs but don't worry, these people are doing it to, oops, I meant for you:

"SECTION 2. The Legislature finds, determines and declares the following to be in the public interest and the policy of the State of Mississippi:

(1) It is the policy of the State of Mississippi to regulate the business of electric public utilities in such a manner that allows the recovery of prudently incurred costs.

(2) Consistent with the policy of the State of Mississippi to seek out and implement measures designed to provide the lowest reasonable electric public utility rates, public utility securitization financing arrangements provides lower customer rates for newly constructed base load electric generating facilities, as compared to traditional utility ratemaking options available to the Public Service Commission, and ensures the continued financial strength of Mississippi electric public utilities
." Bill

Remember, they are doing it for you...... and the children.

Post at Bigger Pie Forum elaborating on the bill.

30 comments:

Anonymous said...

Baldwin County? I'm lost.

Anonymous said...

Sorry, KF - but I don't think this is the type business that Holley does. Know this busts your bubble, but.....

Anonymous said...

What's your problem with this - these wouldn't be State of Mississipi bonds, the way I read it. This would authorize a borrowing "process" for MPC.

Anonymous said...

Somebody needs to do work for this and personally I am glad that a couple of local companies are involved in the process.

Anonymous said...

Anonymous gladness is so meaningful.

Kingfish said...

This post falls under jackassery.

Squawk too much and we'll start writing on this website about how the law was changed while Ford was speaker, how competitive bidding for professional service fees disappeared, and which ones have profited from it and why its called the bond cartel.

Sure you want to keep going?

KaptKangaroo said...

Yeah, jackassery!

Anonymous said...

"doing it to, oops, I meant for you"........... and the children.

KF, you killing me this morning. hahahahahahaha

And damn good point at 9:40 am.

Anonymous said...

who is 'squaking' in the above comments? Am I missing something?

Granted, I don't understand 9:39 but that is not uncommon on some of the comments on this site.

The two before it are just raising what seem to me to be legitimate comments.

Why the short fuse, KF?

Anonymous said...

Okay. So the beef plant was a dumb idea because, if built, it was supposed to provide lots of jobs and help the beef industry.

But a billion dollar loan guarantee by the State is a good idea because a) the plant is already built (therefore, the jobs that will be created have already been created or are irreversibly in the pipeline) and because b) MS Power has figured out it spent ten-times too much on this white elephant and needs to transfer its financial disaster to the State so the current MS Power execs can keep their jobs.

Am I missing something here? To me, this deal looks like the beef plant fiasco on steroids.

Anonymous said...

"white elephant" is kind 1/30/13 WSJ article on nat gas powr plants shoots nuclear plants in the ass, but to build an experimental coal plant, got to be a record for dumb ass (not to mention South Miss EPA bought part of the plant to insure "low" power prices for their customers)

Anonymous said...

11:25, I must be missing something. I don't see anything in the bill KF referenced that says these bonds will be "guaranteed" by the state. Please, please show me where that exists in this bill.

Anonymous said...

2:50,

I'm trying to figure out what part of the bill's title (click on KF's link to the bill, the title is on the first page) you don't understand.

The PSC will issue bonds so that a "certain" power company who also happens to have a coal plant can "recover, finance or refinance generation facility costs and financing costs...".

Can't you READ, 2:50?

Anonymous said...

The PSC will issue bonds so that a "certain" power company who also happens to have a coal plant can "recover, finance or refinance generation facility costs and financing costs...".


yes, dumba**, I can read: I note that your comment doesn't have "The PSC" in quotes - if you happen to know what that means.

Going to the words in the bill: "the commission shall enter a financing order authorizing the issuance of rate reduction bonds by an electric public utility"

Bonds to be issued by "an electric public utility". That, my friend, is not bonds issued by the PSC but "authorized". Need any more help?

Next time, why don't you go back to school and learn how to read before you turn your fingers loose.

Anonymous said...

And, dumba** who questions reading ability - from the "TITLE" of the bill ---

"TO PROVIDE THAT THE RATE REDUCTION BONDS SHALL NOT CONSTITUTE A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OR TAXING POWER OF THE STATE OF MISSISSIPPI"

although you might not be smart enough to understand, the title says it will not be a debt or a pledge of the State.

Anonymous said...

These are nothing but a "securitizing" financing method, securitizing the rates to be earned from this (or any other facility, it is not limited to Kemper) to finance its construction. The bill authorizes the PSC to allow this type financing if it finds it appropriate. In Kemper's case, the bonds would be issued by MPC/SC and issued by a bond company. The state would not have any interest in them other than approving the utility's issuing them and repayment terms.

Don't know why anybody would read this that it is an obligation of the state. Its true that if MPC decides to issue bonds that they would employ a bond attorney. They probably wouldn't, JJ, employ a consultant but if they did it would be their choice.

Shadowfax said...

"Why the short fuse?" KF always has a short fuse when anybody questions anything he posts. In that respect, he's a lot like Hampton and that group of liberal malcontents who could not stand to be questioned or refuted. Lighten up Kingfish. And what's with the threat you posted above? Not to worry though; Kangarootie has your back.

Charlie Ali said...

What would Herr von Hayek say?

Speed, Barbour, et al are capitalists in name only. Why can't the private sector do this on their own financing if its such a winner?

Anonymous said...

Damn 5:46 - that is exactly what the private sector is doing. Can't you read? Or understand what you are reading? The only problem is - electric utilities are regulated by the state. Therefore, there are things they cannot do without the state's approval. This bill gives the state regulator the ability to approve it.

Your comment is as dumb as 4:14 above - who couldn't even read (or understand) the title correctly. Maybe you are the same person.

Charlie Ali said...

Problem is the public utility company is not issuing the bonds nor is the Public Service Commission nor is the State of Mississippi. Who is the issuer? Actually the issuer is not extant. We don't understand the legal status of this issuing entity or who will regulate it when it is created.

"An issuing entity established by an electric public utility pursuant to this article shall not constitute a public utility pursuant to Section 77-3-3."

A new technology is usually sponsored by venture investors in the private sector, but here is a strange legal animal that looks a lot like Mississippi re-entering the venture capital business.

Anonymous said...

The feds allowed these energy financing entities in the 2005 Energy act which have allowed them to build nukes or new technology generator plants that carried considerable risk in a more competitive energy environment. Mostly these bonds have performed well. A bond is only as good as the energy production...and the rates paid for it.

Anonymous said...

Charlie a... wouldn't that only be an issue to those that are buying, and those that are issuing the bonds? Point is, it is not the State of MS, and that the state is not in any way responsible for these bonds - unlike the "assumption" that many of the folks looking at this blog without reading the underlying bill (or understanding it if they bothered to read it). Not helped by the fact that KF threw it up with the implication that the state is issuing these bonds.

Anonymous said...

The state may not be the issuer but the state approved ability to fleece the ratepayers in advance of the plant going operational is the revenue source undergirding these "rate reduction" bonds.

Charlie alludes to the scam above. The ratepayers, by the power of Mississippi's legislature, are being forced to provide the venture capital for this unproven project and unproven technology. The ratepayers are stuck because the private capital markets do not, and will not, finance high risk pipe dreams at the cost for credit that Mississippi Power wants to pay.

This project has been a boondoggle and clusterfuck for MP's customers from the outset thanks to Mississippi's House, Senate and Haley Barbour. This new legislation only guarantees that the bend over reaming will now be thorough and complete.

Anonymous said...

The State of Mississippi though not a party is a mid-wife. True, the bondholders would take the hit. Kemper County would have a big hole in the ground, a rusty plant, bankrupt suppliers, and electricity consumers how got a little juice prior to the collapse. The SO could have partnered with Entergy or others to spread the risk. I was present at the PSC hearing to hear the SO rep answer the question, "Is the technology fully guaranteed to work?" Its not guaranteed so the State would suffer thru the ripple effect if it has major problems.

Anonymous said...

OK, now this discussion has gotten into the Bigger Pie arean, not KF's posts and comments about the bonds and the state's risk. If Kemper works as MPC says, everyone wins (SC, MPC, ratepayers, bondholders, locals). If it doesn't, all of the above lose. But - Holly has nothing to do with it, bond lawyers make money just like bond lawyers do whenever Baptist Hospital, Jackson Airport, or anybody else issues bonds, but the state is not on the hook for the bonds - the issuer and the bondholders are.

Anonymous said...

What the press and blogs need to start doing is not blaming this illusion called the bond cartel and lawyers and such. This is the fault of the politicians. We have weak politicians who let huge companies like MPCO do whatever they like. Quit worrying about the technicians and go after who's responsible.

Anonymous said...

MPC doesn't lose if Kemper fails. The ratepayers are forced to be the backstop for their bad decisions.

You're sporting some serious monopoly blinders.

Anonymous said...

9:26 How does ratepayer win? Aside from the supposedly spike in nat gas prices, ratepayers with MPC will be paying 25% higher rates than the going price during construction and who knows what going forward. Bad call on SO/MPC part, nat gas prices will be ~40% lower than this coal technology for at least 10 years.

Only winners here are contractors,lawyers, etc. NO, MPC will not be a winner even if the technology works, they will fight this battle for many years and at the end own a "one of a kind" power plant in rural Mississippi

Anonymous said...

It's all part 1986 law that gave Tim Ford,Steve Holley and the bond cartel a complete monopoly for the past couple of decades. Legislators in 1986 nicknamed the bill "Tim Ford's retirement plan". They also exempted themselves for the bid laws of the state. They have made tens of millions on the back of MS taxpayers and nobody has the political backbone to change it.

Anonymous said...

If someone, kingfish, (hint, hint) would really dig, corruption would be found where gov consultant is involved!!!!

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