Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

Review of Mississippi Power

Company's Proposed CCR
Project
Mississippi Power Company's
Application before the Mississippi Public Service
Commission for a Certification of Public
Comments

on

Convenience and Necessity for Environmental
Compliance Activities in Docket 2019-UA-116
Prepared for Sierra Club

September30, 2019

AUTHORS
Devi Glick
Shelley Kwok
Jamie Hall
Rachel

Wilson

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

CONTENTS
1.

INTRODUCTION................................................................................................1

2.

MPC HAS PRESENTED NO

EVIDENCE

THAT IVÏEETING

THE COMPUANCE DEADLINE OF

OcTOBER

2020 AND CONTINUINGTO OPERATE PLANT DANIEL SERVES THE PUBLIC CONVENIENCE AND
ALTERNATIVES....................................................................2
NECESSITY RELATIVE TO
3.

MPC HAS NOT CÒNDUCTED ADEQUATE ANALYSIS TO JUSTIFY CONTINUEDOPERATION
ÈLANT DANIEL (INCLUDINGTHË PLANNED CCR

4.

MPC HAS NOT DEMONSTRATED

A NEED FOR

PROJECT

OF

COSTS)....................................5

PLANT DANIEL OTHER THAN FOR TRANSMISSION

PURPOSES.......................................................................................................9

5.

MPC SHOULD

PRESENT AN UPDATED AND CORRECTED

NPV ANALYSIS OF

PLANT DANIEL TO COMPLY WITH ALL CCR REQUIREMENTS ASSUMING
DATE FOR PLANT RETIREMENT AND COAL ASH POND CLOSURE

6.

A

THE COSTS FOR

2023

(OR EARUER)

.....................................10

CONCLUSIONs................................................................................................10

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

INTRODUCTION

1.

Mississippi Public
2019, Mississippi Power Company (MPC or the Company) submitted to the
(CPCN) for
Service Commission a petition to obtain a certification of Public Convenience and Necessity
Residuals
environmental compliance activities relating to waste disposal under the Coal Combustion
Jackson County Mississippi (Plant
(CCR) rule for the Plant Victor J. Daniel Electric Generating Facility in
2) construction
Daniel). The CCR project has three components: 1) closure of the existing coal ash pond;
bottom ash collecting
of a low volume wastewater (LVW) treatment facility; and 3) conversion of the
plant.1
facilities at the
On July 9,

MPC
costs,

project
requesting that the Mississippi Public Service Commission approve MPC's share of the
million.2
totaling $62.5

is

compliance with the
The Company claims that the CCR is project is required to meet two needs: 1)
and 2) transmission
rule as required by the United States Environmental Protection Agency (EPA);
constraints. Specifically, MPC claims that:
1.

Plant Daniel
The Company must cease placing all CCR and non-CCR waste streams from
and construct a new LVW
in the current coal ash pond, convert to bottom ash handling,
the
facility by October 2020. In order to meet the October 2020 EPA CCR deadline,
November
Company asserts that it must begin construction of the CCR project by

2019;"
2.

CCR

and

retirement of Plant
The Company must make transmission improvements prior to the
it
Daniel to avoid transmission constraints on its system. The company states that
2020
October
purported
the
cannot construct a transmission alternative prior to
deadline.4
deadline, therefore Plant Daniel cannot be retired prior to the October 2020

at Plant Daniel have
Additionally,the Company requests that the Commission find that the two units

"significant remaining useful life."
establish that the
described in the following sections of this report, we find that MPC has failed to
MPC has also failed to demonstrate that
CCR project investment as proposed is necessary or justified.
these issues. It has
installation of the CCR project represents the most prudent approach to addressing

As

1

2

Mississippi

Power Company Petition in Docket 19-UA-116. July 9, 2019.

Mississippi

Power Company Petition in Docket 19-UA-116. July 9, 2019.

Power Proposed Order Approving Petition, Docket 19-UA-116,
behalf of Mississippi Power Company, Docket 2019-UA-116, page 3.

Mississippi

4

5
 

Power Proposed Order Approving Petition, Docket 19-UA-116,
behalf of Mississippi Power Company, Docket 2019-UA-116, page 10-11.

Mississippi

Mississippi

Power Proposed Order Approving Petition, Docket 19-UA-116,

page 3; Direct Testimony of Mark P. Loughman on

page 3; Direct Testimony of Mark P. Loughman on

page 3.

I

I

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

the general
failed to evaluate alternative compliance approaches. This is inconsistent with
ratepayers.
requirements for supporting a CPCN application and is to the detriment of Mississippi

also

least three years.
Our analysis shows that Plant Daniel has been operating uneconomically for at
to ratepayers, and any additional capital
Continued operation of the plant is
establishment of
spending at Plant Daniel is unjustified. Granting of a CPCN is directly related to an
Plant Daniel is related to
"need" by the applicant. The only support that MPC offers around the need for
address the claimed
the transmission constraints; however, there are alternative solutions to
operate a power
constraints. MPC's justifications do not provide adequate support for continuing to
plant that has been found to be uneconomical.

Considering these findings,

recommend that the Commission:

•

Plant Daniel;
Reject MPC's plan to turn the existing ash pond into an LVW facility at

•

Reject MPC's plan to convert the bottom ash collecting facility at Plant Daniel;

•

•

2.

we

Require that MPC supplement its filing with an analysis to justify both the ongoing
operation of Plant Daniel and the stated retirement dates of 2042 and 2046 for Units
and 1 and 2, respectively; and
at
Require that MPC present an updated net present value (NPV) analysis of the costs
for
date
(or
2023
sooner)
a
Plant Daniel to comply with all CCR requirements, assuming
plant retirement and coal ash pond closure.

MPC HAS PRESENTED NO EVIDENCE THAT MEETING
OcTOBER 2020 AND CONTINUINGTO

OPERATE

THE COMPLIANCE DEADLINE OF

PLANT DANIEL SERVES

THE PUBLIC

CONVENIENCE AND NECESSITY RELATIVE TO ALTERNATIVES

project center around two main points: 1)
arise upon the
compliance with EPA CCR rules; and 2) avoiding transmission constraints that would
application for a CPCN,
retirement of Plant Daniel. Contrary to practices that would normally support an
omitted essential information
MPC has done no evaluation of possible alternatives and has, in fact,
Plant Daniel) from its CPCN
around alternative compliance options (including the potential retirement of
continued operation of
application and Proposed Order. In its Proposed Order, MPC also asserts that the
the
represents "the-only significant source of fuel diversity remaining in its fleet following
MPC's claims

that the Company needs to invest in the

CCR

Plant Daniel

their other coal units to natural gas." Finally, the Company asserts that there
employment and tax benefits contributed by the two units.

conversion of

6

Mississippi

all

Power Proposed Order Approving Petition, Docket 19-UA-116,

page 2.

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

are

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

COMPUANCE WITH CCR REGULATIONS

point in the future in order
MPC will have to remove CCR waste from the current unlined pond at some
evaluated only the single
to comply with the requirements of the CCR rule.' However, MPC has
compliance strategy that it proposed in its application and Order and
that could also meet the requirements of the rule.

has not

evaluated any alternatives

2023, for example, EPA regulations allow CCR waste to
2020." Early plant retirement would make
be placed in the relevant ash pond beyond October
million.1o
There
conversion of the bottom ash collection system unnecessary," saving ratepayers $23.85

If Plant Daniel ceases operation by October

17,

low volume wastewater to treat and the scope of the LVW system would thus be
proposed.n
MPC has riot conducted any engineering estimates for this
different than currently
million
alternative scope, but ratepayers would certainly save some portion of the original $15.65

would

also be less

project

cost.12

and that it would in fact avoid
MPC has acknowledged that this alternative retirement scenario exists"
still a cost associated with Dry Bottom
some of the CCR capital costs (although it is unclear why there is
estimates that the net savings associated with a scenario in which Units

Conversion). The Company
and 2 are retired on July 1, 2022 is $45.3 million. These

Ash
1

Table 1. MPC estimates

of net

savings from early retirement

Environmental Capital Expenditures ($millions)
Alternate
Current
Description
Scenario
Plan

savings are

of Plant

shown

in

Table

1.

Daniella

Cost

(Savings)

Dry Bottom Ash

$47.7

$10.0

($37.7)

Conversion
Permanent LVWT

$24.0

$10.9

($13.1)

Temporary LVWT

$19.9

$25.4

$5.5

($45.3)

Total

TRANSMISSION CONSTRAINTS

Loughman on behalf of Mississippi Power Company, Docket 2019-UA-116, page

7

Direct Testimony of Mark

8

MPC response to MPUS 1-9 Supp, MPSC Docket No. 2019-UA-116.
MPC response to MPUS 1-13 Supp, MPSCDocket No. 2019-UA-116.

9

P.

10

Application, Exhibit MPL-3.

11

MPC response to MPUS 1-13, MPSC Docket No. 2019-UA-116,

12

Application, Exhibit MPL-3.

13

MPC response to MPUS 1-13 Supp, Attachment

A, MS

Docket No, 2019-UA-116.

14

MPC response to MPUS1-13 Supp, Attachment

A, MS

Docket No, 2019-UA-116.

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

4.

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

MPC claims

that the Company will face transmission constraints if Plant Daniel retires

in

advance of the

of this statement
Company completing transmission upgrades.There is no basis to assess the accuracy
produced only a single page document with the
or evaluate alternatives because the Company has
analysis.15
It has not provided the actual transmission study or any other
results of its transmission
analysis to support the claim.

the Plant need not stay
Even if retirement of Plant Daniel would result in transmission constraints,
transmission and resource
online for this purpose alone. There are other lower cost, lower impact
uneconomical coal units at a
solutions to alleviate transmission constraints than continuing to run aging,
changing dispatch of generating units, changing
loss to ratepayers. These include,.but are not limited to,
transmission system, adding new generating resources, and load management
the operation of the
practices that include energy efficiency

and

demand response.

construction schedule, under which
event, MPC acknowledges that the Company has developed a
2022," allowing MPC to retire Plant
it could complete the necessary transmission upgrade by July 1,
October 2023 CCR retirement
Daniel, complete the required coal ash pond closure activities by the
forward-going operational costs.
extension deadline, and save customers significant compliance and
with this plan, but provides no further
MPC asserts that there are scheduling and other risks associated
Company's Proposed Order
details." Once again, there is no mention in MPC's CPCN application or the
retirement of Plant Daniel.
that the Company has a transmission expansion plan that allows the
In any

FUEL DIVERSITYAND ECONOIVIICBENEFITS

provides fuel diversity benefits, as the two
MPC asserts that the continued operation of Plant Daniel
coal. MPC also states that
units at the Plant are the only ones in MPC's fleet that continue to run on
Mississippi. There is no way to
Plant Daniel provides job and economic benefits to Jackson County,
analytical support or quantification
either evaluate or confirm these assertions, as MPC has provided no
of those supposed benefits.
prices
benefit touted by utilities to manage gas price risk in the years in which gas
the fracking boom, gas prices have remained
were both high and extremely volatile; however, since
coal present a greater risk to MPC
consistently low. Today, the rising costs associated with burning
recent years, increasing by nearly a
customers. While coal prices have fallen since 2012, they spiked in
Fuel

diversity

was

a

instead seek to
To truly manage risk associated with fuel cost volatility MPC should
renewable resources----toits generating portfolio,
add zero-variable cost technologies-in the form of
rather than operating coal-fired units.

third

since

2017.18

replacement capacity were to be built at
While Plant Daniel does provide both jobs and tax revenues, if
Jackson County. The addition of
the same site, some portion of these benefits would remain in
15
16

2019-UA-116.
MPC response to MPUS 1-8 Supp, MPSC Docket No.
2019-UA-116.
MPC response to MPUS 1-9 Supp, MPSC Docket No.

17

2019-UA-116.
MPC response to MPUS 1-9 Supp, MPSC Docket No.

18

EIA 923 data on fuel receipts

available at https://www.eia.gov/electricity/data/eia923/

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

when making
replacement capacity would also result in new constructions jobs in the region. Utilities,
in
decisions to retire generating units, often relocate employees to other generating stations, resulting
MPC is with Plant Daniel) passes higher
no net loss of jobs. Finally, operating a plant uneconomically (as
detrimental to the economic
costs on to ratepayers without delivering additional value. This is
Order.
development of the region. MPC has not examined any of these possibilities in its Proposed

MPC HAS NOT CONDUCTED ADEQUATE ANALYSISTO JUSTIFY CONTINUEDOPERATION OF

3.

PLANT DANIEL (INCLUDINGTHE PLANNED CCR
MPC RETIREMENTANALYSIS

FOR

PROJECT COSTS)

PLANT DANIEL

analysis in the
proposing to spend over $60 million on Plant Daniel without presenting any robust
value to ratepayers of continuing to
CPCN application or in the Proposed Order to justify the economic
Plant Daniel in June
operate the units. The Company claims that it did perform retirement analysis on
MPC

is

2018, March 2019, and August
MPC did not produce the

2019.19

input files and results workbooks for these analyses until September

27, 2019.

detailed review of the analysis given the time constraints. Our initial
Plant Daniel and
review finds that the analysis is flawed arid was designed to consider only retrofitting
did not evaluate all reasonable alternative resource options.

We were not able to conduct

a

capacity value to its retrofitting scenario for Plant Daniel.
retirement analysis, MPC awards a
Company's own reserve margin
MPC currently does not have a capacity need-according to the

In its

study21

a significant source of
factor.23
Given that Plant Danlei
percent capacity

MPC does not rely on Plant Daniel as

baseload energy. Indeed, the plant operates at
operates only 25 percent of the time,

a

25

when

a

less

expensive

portfolio of renewable energy or market purchases could satisfy energy demand.
that, going forward, Plant Daniel
Daniel
much higher capacity factor than recent history would indicate is likely." Plant

Additionally,MPC's retirement
will operate at

a

versus

replacement analysis

19

MPC response to SC-MPC-1-13, MS Docket No, 2019-UA-116.

20

MPC responseto SC-MPC-1-19,CONFIDENTlALAttachment

21

MPC's Reserve Margin Plan filed in Docket No. 2018-AD-145
MPC response to SC-MPC-1-19, CONFIDENTIALAttachment

22

D, MS

assumes

Docket No, 2019-UA-116.

on August 6, 2018.
A, MS

Docket No, 2019-UA-116.

23

MPC response to SC-MPC-1-21, Attachment

A, MS

Docket No, 2019-UA-116.

24

MPC response to SC-MPC 1-22, Attachment

A, MS

Docket No, 2019-UA-116.

Synapse Energy Economics, Inc.

Project
Review of Mississippi Power Company's Proposed CCR

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

5

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

without
percent capacity factor every year since 2014, yet MPC projects,
64.55 percent capacity factor
justification, that Plant Daniel will operate at between a 32.79 percent and
assumption tends to inflate the future energy
every year between now and 2035. This unwarranted
the plant look more profitable than it
revenues from continuing to operate Plant Daniel and makes
would under more realistic assumptions.
has

operated at below

a

30

its retirement analysis. Because the Company
MPC also includes the cost of the transmission projects in
of any retirement decision, it is not
claims that the transmission projects are necessary regardless
retirement.25
projects
as costs associated with
transmission
those
of
costs
the
include
to
appropriate

them only as part of the Company's
Those costs will be incurred regardless of retirement, and including
expensive.
retirement scenario serves only to make any retirement appear more

detailed analysis
that prior to the 2018 analysis, the Company had performed no
given that the EPA final CCR
for at least five years.' This gap in retirement analysis is concerning
closure as early as 2019. MPC waited
regulations were published in April 2015 and could have prompted
March 2018 before it began
until the CCR rule was revised (to extend the closure deadline) in
2019 to seek approval to undergo the CCR
conducting retirement analysis. MPC further waited until July
published and one year after the revisions
Projects, over four years after the initial regulations were
A

final point to note

is

were published.
SYNAPSE RETIREMENTANALYSis FOR PLANT DANIEL

information provided by MPC. Data were
Synäpse performed its own analysis of Plant Daniel using
was provided. Our analysis shows
supplemented from public sources where no Company information
past three years
that Plant Daniel has been operating uneconomically for the
Daniel provided economic value to ratepayers
Our retrospective analysis finds that neither unit at Plant
Daniel Unit 1 and 2's energy value and cost
over the last three years (2016 -2018). Figure 1shows
and 2018. We estimate Units 1 and 2 each lost
streams, as well as the unit's net revenues between 2016
$245 million during the three-year period.
more than $35 million per year, with a total loss of nearly
production costs relative to other generators in the
Plant Daniel's uneconomic status is due to its high

Docket No, 2019-UA-116,

25

MPC response to SC-MPC 1-19, Attachment

26

2019-UA-116.
MPC response to SC-MPC 1-13, MPSC Docket No.
Historical
energy values for Plant Daniel to total unit costs.
We evaluated economic performance by comparing the hourly
Program
Data,
Markets
EPA.
Air
U.S.
from
Attachment A. Hourly generation is
hourly system lambdas are from SC-MPC-129
are from
costs
O&M
Unit-specific
receipts.
fuel
923
EIA
based on
available at: https://ampd.epa.gov/ampd/. Fuel costs are
2019: Electricity
on EIA Assumptions to the Annual Energy Outlook
S&P Global. On-going capital expenditures are based
Market Module, p. 14 (capital expenditures), available at:
https://www.eia.gov/outlooks/aeo/assumptions/pdf/electricity.pdf.

27

B, MS

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

lambdas2" provided by MPC,' we find that MPC could
Southern company pool. Based on the hourly
cost than it paid to operate Plant Daniel.
have purchased energy from other pool members for a lower
Figure 1. Daniel Unit

$60

--

$40

----

1

historical energy value and costs, 2016-2018

Energy ¼vlue

-----

Unit

I

Unit 2

o

Net Revenues

(sso)

($!00)
2017

2016

2018

under projected
find that Plant Daniel
(MPC's "MGO" scenario). Our analysis finds
mid gas prices and zero costs for carbon dioxide allowances
through 2040
that each of the Plant Daniel units
values, we conclude that each unit
(Figure 3).'°After considering the NPV of the total costs and energy
Looking forward,

between

28

now

we

and 2040 (Figure

4).31

megawatt of demand on the system and may be set
Hourly lambdas represent "the marginal cost of the next
or an energy purchase."
power
resource,
resource owned by a pool member, a purchased

by

a

generating

29

2019-UA-116.
MPC response to SC-MPC 1-29, MPSC Docket No.
30
comparing avoided cost estimates to total unit costs. Avoided
We projected the economic performance of Plant Daniel by
carbon
CONFIDENTIALAttachment 8 (Scenario MGO for mid-gas prices and no
cost estimates were provided in SC-MPCl-3,
in SC-MPC1-3,
provided
were
O&M
Variable
and
Fixed
A.
Attachment
price). Capacity factors were provided in SC-MPC1-22,
on EIA Assumptions to the Annual Energy Outlook
CONFIDENTIALAttachment B. On-going capital expenditures are based
expenditures), available at:
2019: Electricity Market Module, p. 14 (capital
Fuel price projections for subbituminous coal from
https://www.eia.gov/outlooks/aeo/assumptions/odflelectricitv.pdf.
in SC-MPC 1-3 CONFIDENTIALAttachment A.
provided
were
Mountain
Powder River Basin and bituminous coal from Rocky
MS Docket No,
31
MPC response to SC-MPC1-19, CONFIDENTIALAttachment D,
This assumes a discount rate

ofgbased

2019-UA-116.

Synapse Energy Economics, Inc.

Project
Review of Mississippi Power Company's Proposed CCR

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

7

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

Figure 2. Daniel Unit

Figure 3.

1

projected revenues

Cumulativenet revenues for

and costs

under MPC

Daniel Units 1 and 2

scenario MGO, 2019-2040

under MPC

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

scenario MGO, 2019-2040

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

Figure 4. Net present

4.

value of total

costs and energy

MPC HAS NOT DEMONSTRATED A

valuefor

NEED FOR

Units

1

and 2

from

PLANT DAN1EL

2019-2040

OTHER

THAN FOR

TRANSMISSIONPURPOSES
Daniel. Instead,
for any of the energy or capacity from Plant
MPC's application never discusses the need
discussed
Plant Daniel to meet transmission constraints. As
MPC's application discusses the need for

through
Company could meet the transmission constraints
above, MPC has acknowledged that the
project.
accelerated construction timeline for an alternative

an

capacity factors, indicating that the energy is not
Plant Daniel has been operating at low and decreasing
any energy or capacity needs that arose
competitive and is not necessary to meet load. If MPC had
storage,
renewable alternatives, including solar and battery
based on the retirement of Plant Daniel,
could meet those needs at a much lower cost.

I

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**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **
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 Exhibit

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MPC SHOULD

5.

PRESENT AN UPDATED AND CORRECTED

NPV ANALYSIS OF THE

REQ.UIREMENTS ASSUMING A
PLANT DANIEL TO COMPLY WITH ALL CCR

COSTS FOR

2023 (OR EARLIER)

COAL ASH POND CLOSURE
DATE FOR PLANT RETIREMENT AND

application or in the
or retirement analysis in its CPCN
MPC did not present alternative scenario
acknowledged that the Company
However, in discovery responses," MPC
Company's proposed order.
scenario that included the following:
did in fact evaluate an alternative
Completion of-the coal
extension deadline for

•

retirementpond closure project by the October 2023
EPA CCR compliance.
ash

•

(or whatever date MPC determines
Retirement of Plant Daniel no later than July 2022
deadline).
coal ash pond by the October 2023
necessary to complete closure of the

•

retirement of Plant Daniel (likely
Construction of transmission alternatives prior to the
July 2022).

•

Construction of
Daniel.

an LVW

facility,

sized and scoped based on

is

the early retirement of Plant

MPC to perform its analysis are incorrect
above, the input assumptions used by
evaluate
update its retirement analysis to robustly and accurately
and unsupported. MPC should
requirements by: 1) modeling a lower and more
alternative scenarios to comply with the EPA CCR
the avoided costs associated with the
realistic capacity factor for Units 1 and 2; 2) removing
capacity cost. The cost of this alternative scenario
transmission project; and 3) removing the avoided
application proposal to install the three-part CCR
should then be compared with the cost of MPC's
2046.
through the planned retirement dates of 2042 and
project and continue operating Plant Daniel

As discussed

in Section 3

transmission
robust evidence that: 1) the region has a
most
determining which transmission solution was
constraint; 2) alternatives were evaluated in
to
accelerated
the transmission solution cannot be
appropriate; and 3) the Company timeline to install
2022.
allow the retirement of Plant Daniel prior to July

Additionally,MPC should provide transparent

6.

CONCLUSIONS

1

In

2012, the

M.ississippi

(FGD) at Plant

32
33

and

Daniel"

$300 million in a flue gas desulphurization
Public Service Commission approved
based on MPC's claims that
to.comply with EPA's Mercury and Air Toxics rule

Attachment A, MPSC Docket No. 2019-UA-116
MPC response to MPUS 1-13 Supp,
2012.
Commission Docket No. 2010-UA-79. April 3,
Order in Mississippi Public Service

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **

 Exhibit

1

Sierra Club's Comments
2019-UA-116 (Public)

Plant Daniel was

plant

was

a

necessary baseload

operating at

less

than

40

unit.34

however, the
By the time the FGD was installed in 2016,

percent capacity factor, far below baseload

levels.35

undepreciated costs
If the two units were to retire,
portion of Plant Daniel remains undepreciated.
could request
approval from the Mississippi Commission. MPC
would not be allowed in rate base absent
considered
depreciation schedule, but arguably, the FGD is not
cost recovery through an accelerated
operation." The remaining FGD costs could end up
"used and useful" after such a short time in
have
not approved. Thus, it appears that MPC may
stranded if the accelerated depreciation schedule is
order to avoid seeking
upgrades and continue operating Plant Daniel in
an incentive then to install CCR
depreciation schedule to continue collecting the cost
approval from the Commission for an accelerated

A

of

a

minimally

used FGD.

is losing money and
shows two key components: 1) P\ant Daniel
The evidence presented in this analysis
$62.5 million in
alternatives to MPC's CCR proposal. If the CPCN for the
2) there are lower cost
Plant
knowingly be making an imprudent investment.
environmental investments is approved, MPC wil\
with every kilowatt-hour that it generates, and
Daniel will continue losing money for ratepayers
add
project. The Commission should not allow MPC to
ratepayers will be saddled with the bill for the
Company's request for
heavy burden and should reject the
a\ready
ratepayers'
to
costs
unnecessary
any
approval to retrofit Plant Daniel again.

34
35
36

2010-UA-79. April 3, 2012.
Public Service commission Docket No.
http://ampd.epa.gov/ampd/
at EPA Air Markets Database,
Mississippi Power self-reported data avai\able
Scheduling
Supplementation of the Petition and a Revised
Club's Motion to Require
SO2 emission
in
Additionally, as discussed in the Sierra
spikes
recent
show
https://ampd.epa.gov/ampdf
self-reported data from
Order, page 5, Mississippi Power's
scrubbers.
new
operating the
the Company is only periodically
for Plant Daniel, indicating that
Order in Mississippi

rates

**MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 **