Friday, August 14, 2015

PSC Candidate Brent Bailey speaks out on rate hike

Public Service Commission Central District Republican  candidate Brent Bailey made the following statement yesterday after the PSC voted to raise Mississippi Power rates 18%:


The MS Public Service Commission today voted 2-1 to grant MS Power Co. an 18% rate increase under the label of "interim rate recovery" for the Kemper project and will allow MS Power to generate $159 million per year. This is the identical rate percentage that was recently shot down by the MS Supreme Court and ordered to be refunded back to customers. The MPSC finds that MS Power is in a financial emergency and that bankruptcy is not the solution. MPSC did put some conditions on the rate increase, but overall the MPSC found that the nat gas combined cycle turbines currently in operation are deemed "used and useful" and worthy of cost recovery. However, the NGCC turbines are an integral part of the overall Kemper project which has not undergone prudency review (which has now been set for Nov. 10). Because prudency has not been determined or demonstrated for the Kemper project, because MS Power has shone an inability to control project costs, and because project timelines continue to be missed, I would likely have not supported the rate increase so as to reflect my historical position that this project was not the most cost-effective solution and not in the best interests of customers. Do you agree with MPSC's decision to grant an interim rate increase?


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25 comments:

Anonymous said...

Yes, I support the MPSC's rate hike for MPC. And I find it totally inappropriate for any cnadidate for this position (which all are doing and have done) to predetermine their position when they should be deciding based on the facts presented, statute and the staff analysis.

I do not support MPC being able to recover the costs of Kemper that were over and above the initial 'approved' base ($2.4-$2.8 billion) through customer rate hikes - those should be borne by MPC and SC IMHO. But to deny a rate hike on 'general principles' of political prudency in this election cycle is the height of pandering.

But thanks for asking.

Anonymous said...

HELL NO.They must be stopped. How did they arrive at 18%? If this is a return on investment what dollar portion of the Kemper money pit are they using to arrive at this 18% increase. The 2 PSC commisioners who sided with the stockholders and no the rate payers were in such a damn hurry to do what Ms.Powers told them to do they forgot the opening prayer and pledge that is always said before each meeting. If Ms.Power is having financial problems they need get in touch with their holding company who can then adjust the dividend paid to stockholders or file a reorganization plan in federal court.When my reimbursement check arrives from these crooks I am going to send the same amount of money to Thomas Blanton's campaign.He is my hero.

Anonymous said...

This guy is not an accountant nor a lawyer and will be useless as a public service commissioner.

Anonymous said...

I agree with Brent Bailey. No more rate hikes of any kind whatsoever for Kemper. The entire state will be better off if they file bankruptcy and sell the service areas to another company. There will never be any end to their begging for money for Kemper until they are told NO for the last time.

Anonymous said...

4:44
The MPSC "cap" of $2.88 Billion is only part of the story: Shame on you for leaving out that MPC also plans on charging the customers to pay back another $1 Billion in cost overruns under the Special Purpose Entity (SPE) bond the Legislature gave them under the Base Load Act, for a total of liability to customers of at least $4 Billion (SO/MPC are writing off, in contrast, only $2.2 Billion of the $6.2 Billion total; they are asking rate payers to pay at least $4 Billion of the total).

The only thing that will stop rates for the full $4 Bil+ from being charged to MPC customers is if the new Commission in 2016 finds that the spending on the lignite/syn gas portion of the plant was imprudent. MPC has used the so-called "cap" as a deliberate, misleading shell game over and over to confuse Mississippi rate payers.

Rate payers must know at least generally where the candidates stand on such a large, vital issue to the economy of the entire State of Mississippi. It is entirely fair for candidates to indicate, as Mr. Bailey has, how they would have voted on prior orders. Voters should at least know how they would have dealt with issues already voted on, as well as the general issue of paying for a corporation's mistakes as opposed to rate payers paying for those mistakes. I appreciate Mr. Bailey's candor.

There is no election race this year more important to the State of Mississippi's economic future than the PSC race. Do not let MPC fool you: their tab to rate payers again is $4 Bil+, not just the $2.9Bil "cap". If any one says its just the "cap", you'll know they are telling you the big lie.

Anonymous said...

4:58: Blanton is my hero too! It is amazing what one person can do by taking and keeping the initiative.

Keddy Rillowatt said...

A Public Service Commissioner is about as worthless to the population of this state as somebody who canvasses all the malls to see what the average square-footage is. We did not have these positions thirty years ago. What good are they now?

Anonymous said...

Reddy: The PSC started with the Public Utilities Act of 1956 which Is longer than 30 years ago.

Anonymous said...

Please don't burden a computational wizard like Reddy the Bloviator with math and facts.

Anonymous said...

Governor BAILEY 2019.

Anonymous said...

A company runs low on cash flow and the government raises the rates it may charge the public?


Dad, may I have an allowance this year? I promise to cut the grass next year.

Anonymous said...

Gov Bailey? I believe the democrat Brandon Presley voted AGAIN against rate hikes and Kemper's BS. So far Presley has been the only person looking out for the people of Mississippi. Thank ya. Thank ya very much!!!

It's Keddy, Not Reddy said...

Can you honestly say you ever remember people running for the three public service commissioner posts thirty or more years ago? Or that thirty or more years ago you ever heard of them approving or disapproving an MP&L proposed rate hike?

Be honest if you answer.

Next, lets discuss the State Bank Comptroller.

Anonymous said...

Kiddy: I guess you are too young to remember Norman Johnson who was a PSC Commissioner 30 years ago, (or his good natured tales and jokes as the President of the Neshoba County Fair), or the much esteemed Rubel Phillips, an initial PSC Commissioner who later became the first Republican candidate to run for Governor in the modern era, or the infamous Goose Hunt involving PSC Commissioners stopping The City of New Orleans ( that was the IC train, not the place) stopped on the tracks short of the station so the could skedaddle down the embankment and avoid reporters onto them for an IC sponsored hunt ( they regulated railroads also back then).
But we digress. Brent Bailey who is sponsoring our conversation is a fine man and candidate. So is his opponent. We are fortunate to have such good choices.

Anonymous said...



4:44 and 6:12 Let's not get lost in the jargon of the industry but get back for a minute to the basics.

Mississippi's population is 2,994,079 which is just a little over 400,000 people more than the city of Charlotte,NC but less than the metropolitan area around of Charlotte.

So can you explain why Mississippians have paid and are paying for more power plants than needed to serve Charlotte, Lake Norman, Concord, Statesville, Davidson and other outlying communities especially when we are far more rural?

And, explain to me why we pay to build the plants and yet when those costs are satisfied, our rates do not decrease?

It seems to me, we are forced by the PSC to become shareholders with no benefits of investment.

How is this different from allowing those starting businesses or expanding businesses the right to rob us at gun point to get their new business or expansions up and running?! Where is their risk? Where is their shareholders risk if they can expand with no or reduced expansion costs? And, worse, even if they fail, everyone from top to bottom in the business still gets paid as if they had succeeded! That's not capitalism, that's stealing!

We should ask every Public Service Commissioner to give us the figures on current supply and in state demand.

If I already have all the widgets I need, why should I be forced pay for a new widget factory to make more widgets for someone else and not receive any benefits from the new widgets IF they are the " new and improved" widgets advertised? Instead, I'm paying for them, and my children

Utilities get to have monopoly in return for providing a necessary service at a reasonable rate of return to it's shareholders. Unlike a business venture, the benefit to a utility shareholder was a no risk, reasonable rate of return.

The con men among us are successfully trying to erase the differences between functions in a society. Providing professional services or utilities or other public services needed for a society to function cannot and should not be confused with business ! A business model is not the answer to efficient use of resources and monies in a society. That model will rape a society and that is what we are seeing!









Anonymous said...

Kiddy: in 1956 the initial PSC was Norman Johnson, Rubel Phillips and Bucky Moore. At the time of the famous Goose hunt Norman Johnson and DW Snyder were Commissioners. John Dale was the other Commissioner who tattled on them (and was a real a$$hat stick in the mud--the only thing memorable about him). Bill Minor, still with us thank God, was the reporter waiting at the Jackson depot waiting to grill DW and Norman.
Also, the predecessor to the PSC was the Railroad Commission which regulated whether the RRs could close depots. The 1956 Act added electric, telephone and natural gas regulation. For many years MP&L had declining rates as economies of scale reduced their costs with expansion of their system.
Thank you Brent Bailey for this chance to remember all this. Thank you also Brent for taking unambiguous positions on the Kemper debacle. You are a good man. Southern Company in Atlanta ruined an otherwise fine company in MPCO. But MS can not afford to pay for the hubris of A$$hats in Atlanta who, with Their boy Haley, ruined MPCO, forcing a company with just $1 Bil in assets to strap on and build a now $6.2 Bil experimental plant to increase the asset base and thus the rate of return on assets of MPC. Brent, please deliver us from these A$$hats trying to ruin the rest of Mississippi so MPC can escape the natural consequences of their acts.

Anonymous said...

MPC will not go bankrupt because all their debt is to Southern Company which will not walk away from all these assets, even if their shareholders take a short tem hit for a year or three, SO is the only bond/debt holder bc no one in their right mind will lend to them. SO can afford to pay for Kemper in the long term or issue more stock.

Anonymous said...

6:12

4:44 here. I don't disagree with your concept, but don't see that it differs from mine. The $2.8 (+/-) 'cap' that I suggest is what can be included in MPC's rate base is just that. I don't suggest that MPC should be allowed to increase the rates to pay the bond debt if in fact it was incurred. While the bonds have the service area, in effect, as security, it does not mean that the PSC should increase rates to pay the bonds. Rather, the bonds should be paid as any other debt service of the company - not from increased rates.

To me, the Bigger Pie folks are the ones that are obfuscating the facts and the reality. Just because MPC has this increased debt does not change the 'cap' that the PSC has previously approved and should be honored, as long as the plant produces energy for the customer base.

As an additional thought - IMHO - the PSC should require that MPC/SC should share any revenue received from selling the technology to others on a prorata basis as the cost was allocated in rate approvals.

Anonymous said...

Y'all are still getting lost in the financial details without asking yourselves who benefits? If it's not the rate payer and it's not the shareholder and it's not the State of MS, then who the " f" benefits from this fiasco? Who was ALWAYS going to benefit from this fiasco?

Anonymous said...

Some of you think that all a commissioner has to do is vote "no" on the rate increase and its over. Wrong. The damage was done when the PSC gave MPCo a certificate of need to build the plant. All MPCo has to do now is prove that the expenses they incurred while building the plant were "prudent." And "prudent" is clearly defined in case law and can't be changed on a whim or because of some political promise. There will be some minor "relief" for ratepayers in Meridian, Hattiesburg, Laurel, Gulfport and Biloxi. But the damage is done. Soooo That makes Bailey either stupid, which he is not, or a demagogue. Promising to avoid paying for the plant to get elected only strengthens the legal case for imposing the rate increases by judicial order.

Anonymous said...

Yes there will be legal battles over the definition of prudency, including MPC's faked projections, but MPC will lose. MPC in 2016 will no longer have the support of either the Commission or the Supreme Court. The certificate merely gave MPC permission to build, but not rates or a determination of prudency. Bailey is a bright guy who MPC should not under estimate. Ditto for Brown.

Further, we are a long way from knowing if the plant can even offload the 3 million pounds of CO2 it will generate to operate within its clean air permit. CO2 in concentration is both toxic and the worst pollution there is. Then there is the issue of the gasifier refectory brick holding up over time under 1800 deg. and pressure. MPC may find it can not sustain operational reliability. If the plant proves neither used nor useful as a syn gas plant over a period of time ( the PSC will not rush it), the only portion to go into the rate base will be the natural gas operation under consideration now, a total of 15% (1.1 Bil) of the $6.2 Bil project. SO will be left to eat their mistakes.

Anonymous said...

It is neither conservative nor should it be the role of government to use taxpayer dollars to bankroll venture capitalists!

That the GOP has an element that blindly supports business has given us Magnolia Venture, the meat packing plant and now this.

Our deep recession was also caused by those who are supposed to conservatively manage our money on our behalf deciding to profit from risking that money in high risk investments. Add to that the silly assumption that all regulation is bad and we can trust those who manage our money to always act in our interest instead of theirs.

And, while it's true that the higher the risk, the higher the return there are a few caveats. The first and most important is you should be able to withstand the loss!

We are a State with limited revenues and limited resources. We have to use those resources wisely and efficiently. We cannot continue to let this ridiculous emotional, choose up sides partisanship keep us from being rationale and pragmatic. This isn't about being anti-business or pro-business, this is able being sensible and realistic!

Anonymous said...

7:27 - you and your BiggerPie buddies can continue to compare Kemper with MV and the Meat Plant, but they are not the same. MV and Holland's meat plant did use taxpayer dollars to finance the operation. Kemper does not have any taxpayer dollars involved in the development, and no matter how many times you say it, the facts do not change.

11:22 - don't care if this is Ashby, Kelly or Robert - you make a great argument with the absolute assumption that the syngas portion of the plant will not work. Too bad that your only argument is predicaed on something that has not been determined at this point and will not be determined until next spring. You can 'assume' that the bricks will not hold up, that the CO2 will not be sold, or that the process will not work.

I agree - if it doesn't work, Southern COmpany should have to shoulder the costs. But I don't assume it won't work at this point and your saying it over and over is just like the 7:27 - repetitive doesn't make it fact.

8:00 has it right. And those candidates that are demogaging the issue - including the B'Boys - Bailey, Brown and Blanton - and the subsurface unreported third party campaign being run by Stan Flint and his buddies - should be barred from ever serving if they are not willing to do the job as defined by the law, not by the politics.

Sixteen Medium Rare Tenderloin Fillets Please said...

D.W.Snyder's ass went to jail, as it should have. These jobs are nothing more than Roach Attractants placed around the Public Trough. These roach attractants are frequented by losers, wannabee politicians, those wanting their names on the billboard, some who think the job is a stepping stone, others who see it as a lily-pad of cushy trips and an unlimited source of buffets and fine steaks, a few who are told they will be rewarded later and a gaggle who run 'just cause'.

If a candidate tells you he sees this as an opportunity to be of service to the citizens of Mississippi, he's lying through his teeth.

Anonymous said...

MPC downgraded this morning:

https://www.moodys.com/research/Moodys-Downgrades-Mississippi-Power-to-Baa2-negative-affirms-Southern-stable--PR_329528

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