Friday, December 30, 2016

Kemper might get federal help

Congress might bail out the Kemper plant. The Wall Street Journal reported recently:

The most expensive fossil-fuel power plant ever built in the U.S. could soon get a financial lifeline thanks to President-elect Donald Trump, who has signaled interest in clean-coal initiatives as a way to preserve mining jobs.

Buoyed by Mr. Trump’s enthusiasm for the U.S. coal industry, several congressional proposals seek to boost tax breaks for facilities that can capture carbon dioxide, a greenhouse gas that is a byproduct of fossil-fuel combustion. The biggest winner—at least initially—could be Southern Co.’s Kemper County, Miss., power plant, a facility designed to capture about 65% of its carbon-dioxide emissions and sell it to oil companies, which use it to help extract crude from wells.

Construction and technology snafus have doubled the cost of the Kemper project since it was approved in 2010, to nearly $7 billion. The power plant is scheduled to achieve full commercial operation early next year.

One proponent of the expanded tax credits, Democratic Sen. Heidi Heitkamp of North Dakota, met this month with Mr. Trump to discuss “a realistic path forward for coal.” Sen. Heitkamp said while first-of-a-kind projects such as Kemper are often problematic, the economic impact of clean coal use is too important to ignore, adding the bill she is co-sponsoring offers a “meaningful tax credit without breaking the bank.”

Atlanta-based Southern owns Mississippi Power Co., which is building the clean-coal project, and stands to reap a windfall of between $695 million and $4.5 billion if any number of legislative measures get passed, according to a calculation by Friends of the Earth....

Three proposals that could be debated in congress in coming months aim to increase tax breaks for capturing carbon dioxide and reusing it. Southern Co. Chief Executive Tom Fanning, who was in Washington recently to talk with lawmakers, said legislation permanently extending federal tax subsidies would be most helpful to clean-coal projects.

One of the bills, filed by Republican Rep. Mike Conaway of Texas, seeks to raise subsidies and continue them indefinitely rather than have them expire once 75 million metric tons of carbon dioxide have been captured, a milestone under the current law that is expected to be reached by 2019.

The bill supported by Sens. Heitkamp and Sheldon Whitehouse, a Democrat from Rhode Island, would triple the current tax credit of $10 a ton of carbon emissions captured and used in enhanced oil recovery to $35 a ton for the first 12 years a plant operates. Republican Mitch McConnell, the Senate Majority Leader, also is a co-sponsor and has attracted support across the aisle. Sen. McConnell’s office declined to comment.

A third measure by Sen. Heitkamp, a Senate amendment, provides a slightly lower subsidy to carbon emissions captured for enhanced oil recovery. North Dakota is a major producer of oil, gas and coal and Sen. Heitkamp from 2001 to 2012 was a director of Dakota Gasification Co., which has been making a synthetic natural gas from coal since the 1980s....

Once sequestered, up to three million tons of carbon dioxide each year will be moved from Kemper to old oil fields through a pipeline. The emissions can be reinjected into oil wells, where it helps loosen deposits to flow to the surface.

Brett Wingo, a former project manager for the plant, has been a harsh critic of Kemper and said the tax proposals amount to “a federal bailout of a failed project.”

Mr. Wingo left Mississippi Power last February in a dispute over the utility’s lack of disclosure to shareholders and regulators. He predicted Kemper wouldn’t make its year-end completion target, missing out on $250 million in depreciation expenses this year.Rest of article.

The fools will probably pass the bailout.


Anonymous said...

And the alternative to the bailout is.......?

Every tree-hugger knows you never let a little failure go to waste. Capitalize on failures. Tote them signs.

Anonymous said...

Yes, 5:28 am , we all know this GOP controlled Congress are tree hugging Commies.

They sure as hell aren't capitalists because capitalism means some businesses fail because they just aren't sound businesses. And, we know they aren't capitalists because monopolies ( too big to fail) prevent competition which is at the heart of capitalism.

And, we know because they are defending Putin with some of the most convoluted arguments and often with a stream of non-sequiturs..

The gullible who bought the liberal/conservative nonsense for decades allowed politicians to put party loyalty and lining their own pockets before the good of our Nation. You never realized that if the party's got your blind loyalty, both would benefit while in office and they didn't mind so much having to take turns doling out the political spoils.

Politics is about power not philosophy and governance is about making good decisions and making systems work efficiently. We had our philosophy. It was Reason. Our Founders were adherents to reason and individual freedom and liberty.

Liberalism and conservatism weren't economic theories. They had little to do with governing but a rather were about what motivates and best predicts human behavior and outcomes. Did you even know that the notion of liberalism originated from the Protestant religions?

Some voters also bought into the silly notion that all businesses and businessmen are good, smart people.

Look up oligarchy. You will have to learn to survive in an oligarchy. Tell me how free you feel dealing with the monopolies BOTH parties have allowed to blossom!

Anonymous said...

This project is and was a total disgrace. The employees that worked on that project told me stories that would make you shake your head in amazement. I know many contractors fleeced this project. One was hired just because he was a minority. Didn't matter that he could perform, they just needed that affirmative action. Not all of them but out of the 23,000 plus workers so many were incompetent, non-skilled, had no work ethic. This project, like so many others did a great deal of damage to the construction industry by allowing Contractors to over bill the owner, not train workers for the skills needed and pay those workers a high rate of pay. Equivalent to you going to Burger King and paying $10 for a hamburger and then a getting your order wrong. The workers I employed that came from there had absolutely no skill at all. But in the name of "Cost Plus" that's how it works, and the owner just transfers all costs to the customer, in this case the ratepayers.

This was and is a project that should never be duplicated. It's a laughing joke. I've said my piece on this, and unless you actually physically with your own eyes drove there and saw the waste then you would pass it off as another large project that stimulated the economy. Yes, a lot of people made a hell of a lot of money off this job.

Anonymous said...

I've always thought we should bring charges against the former members of the public service commission. Or at least require an audit of them. I remember speaking to Lynn Posey about this years ago. He agreed that it was a fiasco that was doomed from the start. His reply 'well, my voters won't see a rate increase. So why not.' I suspect he was receiving benefits from the project in one form or another. F you Lynn.

Anonymous said...

I can believe that the Republicans aren't going to abort this Obama baby, but I did tell yall that Trump was full of B.S.. You poor suckers in the Sip are going to pay for a coal plant that could run more efficiently & cheaper on Natural Gas. When Obama supported you hated it, but since Trump supports it, everything about it is great.

Anonymous said...

The MS Utilities Act requires that any addition of property to a utility's rate base be "used and useful". This requirement is in addition to the requirement of prudence. But the lignite portion of Kemper will prove to be "unused and useless" because running the gasification plant will be many times more expensive than just continuing to run it on natural gas. MPC will have to shutter the gasification just as soon as they're done taking rates from the PSC. So the gasification plant is doomed to go unused regardless. Hopefully the PSC will see this and not make Mississippians pay for the gasification plant. Mother Nature already provides natural gas cheaply and abudently. The original sin of hubris here was MPC's trying and of course failing to outdo Mother Nature. Overhead and maintenance for gasification is now projected by MPC to be $1 Billion every 5 years which is more than double MPC's original projection but the real figure is mor likely $1.75 Billion every 5 years, or over $8 Billion over 40 years, way too expensive to ever operate that way. So, gasification will be unused and useless and by law not includable in the rate base. Let's hope that is understood.

Anonymous said...

The former Southern Public Service Commissioner who voted to ok this was well taken care of by the powers in Jackson. He was given a plum 6 figure job.

Anonymous said...

Go to and read Steve Wilson's article on how close the plant came to blowing up in a test last October. We may not have to worry about the plant running expensively for a full 40 years. The experiment may come to a rather abrupt end if it gets that far. We should chain Leonard Bentz and Haley who appointed him to the gassifier once it goes to full pressure since they were responsible for ensuring the plant's construction would go on regardless of the warnings.

Anonymous said...

The lobbyists on all sides are having a field day with this. Racking up the fees! They're the only real winners in this scam.

Anonymous said...


Bingo. Crooked Posey was givin a Cush job that he wasn't qualified for (because everyone involved knew he had zero chance of getting re elected.)

Anonymous said...

No, 7:43. You have it wrong. The tree huggers are the ones against the bailout....the ones who want the project to fail and fall flat so they can gloat and criticize everybody from Haley to McDaniel to Tater to Phil's bird-dog. Its only through project-failure that you people experience orgasms.

Anonymous said...

9:34. The project is already a failure. No tree hugger has to hope for it.

Anonymous said...

Every single taxpayer in the state needs to start emailing and calling our congressmen and voicing our concerns about this bailout. Kemper was a risky project from the get go. MS Power and southern company decided to take the gamble and they lost. If MS Power has to file bankruptcy bc of this then so be it. That's what happens when businesses make bad decisions.

Expecting the taxpayers (and ratepayers) to bail out a corporation who made stupid decisions is wrong and goes against everything this country was founded on.

I agree about looking into the psc commissioners who voted for this. Specifically the one who initially voted no then changed his vote. Someone needs to go down that rabbit hole.

Anonymous said...

I have an idea that I believe has serious merit. Tell me what you think. What if the MPSC requires of MPC, as the Feds did of Entergy, as part of the outcome of the Kemper case, that MPC and SO have to join the group that ensures economic dispatch from competing sources of electricity: MISO? Yes, I believe that could mean that Kemper cannot dispatch electricity produced by coal gasification because it would be too expensive to dispatch (due to Overhead and Maintenance if nothing else--possibly up to $14 Bil over 40 years). But wouldn't that be a natural consequence for the company if they foolishly chose to run the plant on syn gas instead of just continuing to run it as now on natural gas? See where it explains of their mission: "MISO is an essential link in the safe, cost-effective delivery of electric power across much of North America. We are committed to reliability, the nondiscriminatory operation of the bulk power transmission system, and to collaborating on creating cost-effective and innovative solutions for our changing industry." Should the PSC require that? If that had been in place from the start, I don't believe we'd have had Kemper built because the incentives would be different. What do you think?

Anonymous said...

"at least six senior engineers from the plant said that they believed that the delays and cost overruns, as well as safety violations and shoddy work, were partly the result of mismanagement or fraud"

"The plant was not only a central piece of the Obama administration’s climate plan, it was also supposed to be a model for future power plants to help slow the dangerous effects of global warming."

"As the emphasis on fighting climate change grew, the Obama administration hung many of its hopes on Kemper. Gina McCarthy, the E.P.A. administrator, cited federal support for the project as proof that her agency was not anti-coal, despite strict new rules on power-plant emissions. The Energy Department repeatedly wrote state regulators emphasizing the importance of the project."

- New York Times

Anonymous said...

If any of the these bailouts actually happen, I'm sure Dorsey Carson's Facebook meltdown will be entertaining, if nothing else. The poor guy is obsessed with the project cost overruns.

Anonymous said...

Mississippi and its citizens need so much more than Kemper being bailed out.

Anonymous said...

With this new administration you can expect more of these trail balloons to see what they can get away with, bailing out mega rich shareholders of a power company is right up this guy's alley. We have been played for suckers. Who amongst us will have the balls to stand up to this type of corporate welfare. I suspect that the wall will never be built and the over 3million criminal illegal immigrants will be deported. Isn't that what we voted for.

Anonymous said...

11:11 am, yes there was shoddy work. But with 32 cranes on site at the same time and the number could have risen higher at an average cost of $30k to $35k per month...yes..that's right, some companies RAPED the ratepayers and along with the damn "safety" that was so damn ridiculous that it promotes laziness and terrible work ethics just for the name of being safe for the almighty "Southern Companies", this project has turned the heads of many owners going forward with projects such as "cost plus" such as this. It has shown that a "perfect" safety program does not keep employees safe but it also increases costs beyond your imagination. Believe me, I know. Safety is great. But when you go through 23,000 plus workers that should show you something. A lot of these men worked safe. They just got tires of the bullshit that goes on to promote bonuses for people who don't know a damn thing about construction.

Anonymous said...

Y'all keep pullin' for HB, Feel, and Tater Tot. This is what you get. Unfortunately I don't have an answer.

Anonymous said...

Leonard Bentz and friends have done nothing but live off of taxpayer money. Can't understand why someone who can't make it on his own is so arrogant.

Johnny Weir said...

Someone needs to write a book about this fiasco!

Henry Ford's Post Mortem.. said...

You goobs who want to cast blame on Haley and Phil are, if nothing else, entertaining. Its a mystery, though, how you can look past the puppeteers and money changers at the highest levels and think the 'local boys' were in the wheel-house of the Kemper fiasco.

You are the kind of people who sat around a corporate table and blamed the local automobile dealerships for the failure of the Edsel.

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