Mississippi regulators force Mississippi Power to close unneeded coal and gas plants

Mississippi regulators are forcing Mississippi Power to shutter as many as 950 megawatts of uneconomic and unneeded legacy coal and gas plants by the end of 2027. Mississippi Power received approval for $100 million in late 2019 for upgrades to the coal-fired Plant Daniel, which the utility expected to run to 2046, despite the “net zero emissions” goal of its parent company, Southern Company. Southern Company subsidiaries Alabama Power and Georgia Power have also said that they were not taking Southern’s “net zero emissions” goal into account when conducting system planning.

Mississippi Power was prepared to operate its coal and legacy gas units for decades, but the Mississippi Public Service Commission ordered the utility to file an update to its long-range plan in April 2021 which would include “accelerating the retirement of some combination of Plant Watson Units 4 and 5, Plant Greene County Units I and 2, and/or Plant Daniel Units 1 and 2.” Mississippi Power did not provide requested data to the Public Service Commission and its consultants during the study process, despite three chances. 

Mississippi Power has significant excess capacity on its system, largely due to it having overstated expected load growth in its facilities. Utilities, including Georgia Power, often overstate the need for new power plants in order to receive approval, and the corresponding profits, from regulators for its construction plans. In the order from the Mississippi Commission, Mississippi Power will still be able to fully recover all its closure and remaining asset costs, effectively making investors whole despite the shortened lifespan on the utility’s assets.

Mississippi Power sunk millions into coal plant on life support

Mississippi Power spent almost $100 million to extend operations at its coal-fired Plant Daniel, despite the plant losing customers at least $245 million in the last three years, according to Synapse Energy Economics. When Mississippi Power made the decision to keep Plant Daniel on life support, it knew – via a separate docket examining the company’s excess capacity – that the Mississippi Commission was likely to order the utility to close older, uneconomic power plants.

Similarly, Mississippi Power knew as late as April 2015 that federal regulations would require it to either close certain coal plants or to spend on new investments to address improperly stored coal ash. The utility instead resorted to legal action and delay, leading to a rushed request of the Mississippi Public Service Commission to approve the coal ash projects in July 2019. The Environmental Protection Agency announced, just five business days after the Mississippi Commission approved Mississippi Power’s $100 million investment into Plant Daniel, that it would be proposing extensions to the potential deadline for compliance by as much as three years.

Alabama Power and Georgia Power cling to coal

Mississippi Power sister companies Alabama Power and Georgia Power do not have plans to close their coal plants, despite Southern Company’s net zero emissions target. Southern Company released its net zero implementation plan in September 2020, but did not commit to retirement dates for any of its coal fleet. Instead, Southern’s report appeared to project coal combustion beyond 2040, gas combustion well beyond 2050, and carbon capture utilization and sequestration (CCUS) starting around 2040. Mississippi Power’s failed attempt at CCUS at its Kemper plant ended up costing shareholders billions in losses.

Southern Company received an “F” grade in Sierra Club’s recent “The Dirty Truth About Utility Climate Pledges” report, which graded utilities based on their plans to retire coal plants, stop building new gas plants, and invest in clean energy.

Southern Company coal fleet

* Alabama Power owns ~96% of Units 1 and 2 and 100% of Units 3 and 4.
** Georgia Power owns 8.4% of Units 1 and 2 and 75% of Unit 3.
*** Georgia Power owns 53%.
**** Mississippi Power owns 50%.

Photo source: Mississippi Power

Update: This article was updated after publication to reflect Southern Company’s ~96% ownership, not 100%, of Plant Miller Units 1 and 2 and to include information about a report from Sierra Club.

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