1310 Twenty-Fifth Avenue P.O. Box 130 (39502) · Gulfport, MS wwmbakh.com 39501-1931 BALCH & BINGHAM LLP RICKY J. COX t (228} 214-0411 (888) 506-8674 f: reox@batch.com e: September 30, 2019 VIA E-MAIL VIA U.S. MAIL SEP Katherine Collier, Esq. Executive Secretary A Mississippi Public Service Commission 501 North West Street, Suite 201A Jackson, MS 39201 Re: 30 2999 ISS. PUBL10 SERWCE $$$ Petition of MississippiPower Company for a Certificate of Public Convenience and Necessity for Environmental Compliance Activities Authorizingthe Closure of the Ash Pond, Construction of Low Volume Wastewater Treatment Facilities, and Conversion of Bottom Ash Collection Facilities for the Plant Victor J. Daniel Electric Generating Facility in Jackson County, Mississippi Docket No. 2019-UA-116 Dear Katherine: On behalf of Mississippi Power Company in the above-referenced docket, have enclosed the original and twelve (12) copies of the Company's Response in Opposition to Sierra Club's Motion to Require Supplementation of the Petition and a Revised Scheduling Order. Confidential Exhibits are being filed under separate, confidential cover. Also enclosed is a copy of this letter and the first page of the filing, which will appreciate your file-stamping and returning to me. Please let me know if you have any questions regarding this matter. I I Thank you for your assistance in this matter. Very truly yours, BHS:hr Attachments cc: Mr. Virden Jones Chad Reynolds, Esq. Jeff Stone, Esq. Shawn Shurden, Esq. Parties of Record ALABAMA **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** I FLORIDA I GEORGIA I MISSISSlPPI I WASHINGTON, DC PUBLIC SERVICE COMMISS THE MISSISSIPPI BEFORE DOCKET NO. 2019-UA-116 POWER COMPANY MISSISSIPPI EC-120-0097-00 OF MISSISSIPPI POWER COMPANY FOR A AND CONVENIENCE PUBLIC OF CERTIFICATE COMPLIANCE ENVIRONMENTAL NECESSITY FOR ACTIVITIES AUTHORIZING THE CLOSURE OF THE ASH VOLUME LOW OF CONSTRUCTION POND, PETITION IN RE: AND FACILITIES, TREATMENT WASTEWATER COLLECTION ASH BOTTOM OF CONVERSION FOR THE PLANT VICTOR J. DANIEL FACILITIES JACKSON FACILITY IN GENERATING ELECTRIC COUNTY, MISSISSIPPI MISSISSIPPI POWER COMPANY'S RESPONSE IN OPPOSITION TO SIERRA CLUB'S MOTION TO REQUIRE SUPPLEMENTATION OF THE PETITION AND A REVISED SCHEDULING ORDER COMES NOW, Mississippi Power Company, ("MPC" pursuant to in opposition the "Company"), of the Mississippi Public Service Commission's ("Commission") RP 12 Public Utilities or Rules of Practice and Procedure ("Rules") and files this its Response to Sierra Club's ("Sierra Club" Supplementationof the Petition and a or "SC") Motion to Require Revised Scheduling Order ("Motion") in the above styled and referenced matter, and would show unto the Commission the following: Granting MPC's Petition will allow the Company to proceed with construction that will lead ultimately to the closure of the ash pond at Plan DanieF and compliance I with the CCR Rule. 1 Unless Granting MPC's Petition otherwise indicated, references to does not foreclose the "Plant Daniel" shall 1 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** mean Units 1 Commission's and 2 coal units. continued review of MPC's generationin the Reserve Margin Plan ("RMP") docket. Stated differently, the Commission may grant the Petition now and still decide to order retirement of Units 1 and 2, in due course, if found to be in the public interest. MPC must close the ash pond at Plant Daniel and must to the ash pond no waste-streams cease later than October 31, 2020. The only way to extend this receipt date is to commit, prior to such date, to closing Units Commission, the Public Utilities 1 and 2. cease- The Staff ("Staff") and its consultants have engaged with MPC for the past year to analyze and ascertain the best course for all stakeholders relative to MPC's generationfleet. The Commission established the RMP docket for that very purpose and has not yet set But, this case hearing or rendered a decision and MPC's associated Petition does not sweep MPC must receive, in timely fashion, can a a so on the matter. broadly; rather, certificate from the Commission so that MPC comply with the EPA's CCR Rule. If the Commission chooses to deny MPC's Petition or delay its decision, then the Commission is effectivelyordering chooses to MPC to retire Units 1 and 2, even though each unit has.over 20 years of useful life remaining. Sierra Club knows that delay by the Commission furthers Sierra Club's stated purpose gas,"3 of "killing coal"2 at Plant Daniel before it moves ÉOO. 2 on with its plans to "kill Sierra Club does not oppose MPC closing the ash pond. Equally, Sierra https://content.sierraclub.org/coall 3https://content.sierraclub.orglourwildamerica/beyond-dirty-fuels-initiative;see also (wherein Sierra Club publicly opposes the https://www.sierraclub.org/maryland/beyond-natural-gas price of natural gas in North America). delivered altered the fracking techniques that have fundamentally 2 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** Club does not assert that the Petition should be denied, filing. Rather, Sierra Club's only purpose is to as it has not contested MPC's delay these proceedings and divert the Commission's attention away from the RMP docket, where Sierra Club chose not to intervene and is foreclosed from participation. Sierra Club's dilatory tactics should not be rewarded, and the Commission deny Sierra should Club's instant Motion. . Such action will preserve the Commission's ability to fully consider the future of MPC's generationfor the benefit of all stakeholders, while allowing MPC a timely path to comply with the CCR Rule. Denial of Sierra Club's Motion is Proper 1. The Commission should deny Sierra Club's Motion because it is both dilatory and without merit. to kill coal. After to disrupt an Sierra Club has employed delay tactics in sitting on process and create disarray in the derail the Company's CCR Projects, which Sierra Club knows 1 predictableattempt its hands for over two (2) months, Sierra Club has tried orderly Commission continue to operate Units a and 2 are 11th hour to legally required to at Plant Daniel. Why did Sierra Club intervene in this matter only to sit idly for two months until the eve of the Commission's Scheduling Order? Simply put: Because Sierra Club failed to intervene in the Commission's RMP docket,4 where the Commission has initiated 4 as a full and thoroughinvestigation and analysis of the future of MPC's MPSC Docket No. 2018-AD-0145. A copy of MPC's filed Reserve Margin Plan is attached hereto and incorporated herein by reference. Exhibit "A" 3 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** existing generatingfacilities, its current reserve margins, and its future generation needs. As providedby the Commission: The Reserve Margin Plan shall include, among other things: forecasting load and energy requirements; evaluating the resources customer available to meet the energy and capacity needs while satisfying strategic considerations; developing, evaluating and implementing demand side management and energy efficiency programs; and assessing and planning for existing and anticipatedenvironmental laws and regulations and any other issues the Mississippi Public Service Commission deems relevant. MPC's Plan shall also contain: (i) discrete alternatives that the Company proposes to address its current reserve margin; (ii) the timeframe over which each alternative can be implemented; (iii) a preliminary estimate of the costs of implementing each alternative, including any incremental transmission capital investment and any costs associated with retiring any un-depreciated assets; and (iv) any other impacts(financial or otherwise)not specifically prescribed herein that would have a material impact upon the service providedby MPC or the costs to customers.6 Many of the issues raised by Sierra Club in its Motion should be, and are being, addressed in the RMP docket, including the efficacy of the flue gas desulfurization system, the long-termcapacity factor of Units those Units, anticipated future 1 and 2, the operatingcosts of running environmental regulations, fuel forecasts, the remaining value of the Units, and the expected retirement date for those Units. Sierra Club, however, declined to intervene in the RMP docket, and is to conjure up unfounded reasons to delay this proceeding kill coal at Plant Daniel. Sierra Club asks for 6 Second Amended and Restated a as a now left last-ditch attempt to delay until December, because if they Stipulation, MPSC Docket 2017). 4 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** No. 2017-AD-112, pp. 8-9 (Nov. 30, can delay a Commission decision MPC's compliance and may even on MPC's application,they will effectivelyprevent get what they really want-a forced Plant Daniel be in the best interest of retirement, whether the RMP docket determines it would all stakeholders or not. Sierra Club is the only stakeholder that matters coal is what they do for a Sierra Club. And killing to living.6 This Commission should this proceeding; Sierra Club's Motion should be denied. not change its course in The record before the Commission is already fully developed through the Company's application, its prefiled testimony and its data request responses. legal rights to deny Sierra Club's Motion Scheduling Order. It 2. owes The Commission is well within and move forward pursuant its to the Sierra Club nothing at this late stage in the proceeding. MPC's Petition Satisfies MississippiLaw and The Burden of Proof MPC's petition satisfies all requirementsof the Mississippi Public Utility Act and the Commission's Rules regardingfacility certificates.? information Sierra Club ignores the contained in MPC's petition and the supportingtestimony and exhibits of Mark Loughman,which thoroughlyexplains the requirementsof the CCR Rules, the specific manner, timing, and scope of the activities necessary for compliance, and the estimates of the costs of such projects. Moreover, Sierra Club attemptsto impose requirementsthat do not exist. on MPC, and the Commission, filing Section 77-3-11 of the Mississippi Code of 1972, 6 See supra note 1. 7 MIss. CODE ANN. 77-3-11, -13 (West 2019); RP 7.102 and Schedule "3" of Appendix "A". 5 36923873 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** as amended, contains requirements for certificate filings, only that no required in certain circumstances.8 a certificate is Section 77-3-13 Mississippi Code of 1972, as ability and amended, provides only that the Commission must assess the "financial good faith of the applicant, the necessity for additional services, and such other matters as the commission deems relevant."9 While Sierra Club may want more information regarding these CCR Projects, capacity factors, economics, etc., its desire does not alter the Commission'sRules, and impose Sierra Club cannot Mississippi law or a greater burden filing-data requests. MPC's required under Sierra Club can, however, utilize the the Commission's Rules. primary tool provided by the Commission upon MPC than is to gather additional information about Both Staff and Sierra Club have requested a significant of additional information about the CCR Projects and Plant Daniel since the amount Company's filing, to which MPC has fully and timely responded. however, waited two (2) months before over Sierra Club, serving its first data request, so the Commission properly moved forward with its process to resolve the matter. MPC's Petition and supportingtestimony satisfy the letter and spirit of the Commission's Rules, consistent with decades-long practice for similar applications. To the extent certain enumerated information in Schedule "3" of Appendix "A" of the specifically providedas attachment to the petition (e.g. complete Rules was set of engineeringplans and specifications), MPC clearly indicated the planning and not a MIss. CODE ANN. 9 Id. at § § an 77-3-11 (West 2019). 77-3-13 (3) (emphasis added). 6 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** a engineering activities undertaken to date. As is customary in these types of proceedings, such engineeringplans and specifications can (and routinely are) be supplementedand providedto the Staff and their technical experts, Commission and Much of that information other parties as the project progresses. was included in MPC's responses to Staffs and Sierra Club's data requests. Sierra Club is attempting to create a "deficiency" that does not exist in order to create the disarray and uncertainty they need to achieve their strategicgoals. Contrary to Sierra Club's plea in its Motion, a utility's requestfor of public convenience and necessity does not require the utility undertake a complete Commission must economic evaluation determine of every or a certificate the Commission to project proposed. The only whether the public convenience and necessity requires the particular project or facility requested based upon the facts and evidence presented in the petition and anything else the Commission, in its discretion, wants to consider. The Commission, not Sierra inquiry. There is no Club, gets to decide how far it must take its formula for what the Commission must consider.10 In addition to its petition and testimony,the Company has providedStaff with thorough,good faith responses to all of Staffs thirty (30) data requests which go into issues far beyond the basic requirements prescribed by the Commission's rules. Moreover, the Company has responded to Sierra Club's thirty-two (32) data requests. A copy of the data request responses are attached hereto incorporatedherein by reference (public version). io MIss. CODE ANN. § 77-3-13. 7 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** as Exhibit "B" and Confidential responses to both Staff's and Sierra Club's data requests are being providedto the Commission under separate confidential cover as Confidential Exhibit "C" and incorporatedherein by reference. MPC substantially complied with the requirementsof the Commission in filing its petition in this docket, both in terms of timing and content, certainly satisfyingits burden to present a prima facie case for the CCR Projects proposed. The final determination of the rule, particularly regarding non-CCR waste streams, finalized until March 15, 2018, and it rule was finalized, MPC determined its and submitted different than anticipated.ii was proper course, developed a was not Once that compliance plan Occasionally, MPC must react quickly to these its application. changing circumstances, which then requires the Staff and Commission to react quickly as well. This is not a new scenario. Sierra Club, of all groups, should know this and to complainabout this process and the timing of the Company's request is disingenuous at best. MPC has sought approval of the solution it has determined to be the best overall solution to comply with the CCR Rules, in the near term, and to preserve coal as an optionin its fleet until Daniel can be a more completed and a thoroughanalysis of the long-termvalue of Plant comprehensive plan can be implementedregarding how MPC will continue to reliably serve its customers through a mix of resources. That analysis and the comprehensive plan that Sierra Club seeks will be addressed (appropriately)in the RMP docket. n Testimony of Mark P. Loughman, pp. 12-14. 8 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** 3. MPC's CCR Compliance Plan Is Necessary and Appropriate Sierra Club does not disputethat MPC must close the ash pond at Plant Daniel to comply with environmental laws and regulations. Sierra Club does not dispute that when MPC closes the ash pond, it must provide an alternate transport and storage mechanism to deal with bottom ash coming from the boilers at Plant Daniel. Finally, Sierra Club dispute that when MPC does not have to provide alternative ways wastewater to store closes the ash pond, MPC will bottom ash and a new low volume retention facility. At most, Sierra Club suggests that retiring Plant Daniel will avoid the bottom ash expenditures. That approach would CCR Projects and would not even Essentially,retiring Plant Daniel portion of the CCR not eliminate eliminate over 20 years the bulk of the costs of the the full costs of the LVW portion. early would potentially avoid some project costs, while causing the acceleration of other asset retirement obligations. Again, if that decision is going to be made, it should be made in the RMP docket and it should be made only after transmission constraints are mitigated or eliminated. Sierra Club casuallycalls into questionwhether the transmission constraints described by Mr. Loughmanand in various responses to data requests are legitimate by claiming that they are "unspecified". MPC has provided a significant amount of information the nature to both Staff and Sierra Club on this issue. Sierra Club misunderstands of poolingarrangementsand system arrangementssuch electric system or MISO. as the Southern Coordinated planning is fundamental to the reliable 9 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** to suggest that operationof such systems and matter to the needed in an transmission constraints should not Commission in this docket, because the transmission improvementsare affiliate's service demonstrates their lack of understanding of area coordinated planning. To retire Plant Daniel prior to the completionof the necessary transmission improvements,as proposed by Sierra Club, would not be prudent and will expose MPC's customers to transmission related reliability risk without Units 1 and 2. No Hearing is Requiredin this Proceeding. 4. With respect to Sierra Club's assertion that "evidentiaryhearing is required an by statute," Sierra Club is wrong and relies erroneously Mississippi Public Utility Act that does not on a provision of the apply to MPC's request. MPC's even petition was properly filed with the Commission in this docket on July 9, 2019. Two parties properly intervened-Cooperative Energy and Sierra Club. Sierra Club has had since July 9th to object or contest the Company's filing and has not done the time the Commission issued its Scheduling Order, neither Sierra Club other party filed (and has still not filed) any objection, contest or so. nor At any protest to the Company's petition. In that posture and at the time of the Scheduling Order, this matter was 12 (and still is) uncontested.12 }\/ÍiSS. ÛOde Ann. § 77-2-13(5) provides: "A proceeding shall be considered contested in the following: (a) commission Upon the initiation of any proceedings should not be taken; rate change proceeding when requiring rate filing is a In (c) In any adversarial proceeding, when any objection a to show cause suspended; (b) a party or why any action by the and contest is filed by any party." 10 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** do not Uncontested matters a require a hearing of sort, much less any evidentiary hearing: "Notwithstanding any provision of this section [77-3-13] contrary, the certificate uncontested cases support for a . ." applied for nor may be granted without a as its MPC's petition seeks approval of neither transmission facilities, both of which governedby Section are MPC's petition in this proceeding is governed by 77-3-13. required, and the Scheduling Order issued by the Commission expression of the Commission's to the hearing in Sierra Club erroneously relies upon Section 77-3-14 hearing requirement. generatingfacilities 77-3-14. . as an preferred procedures, consistent No hearing is was a with lawful and in compliance with Mississippilaw and the Rules of this Commission. Any formal objection levied by Sierra Club at this late stage should as untimely, given that the Commission has already issued a be rejected Scheduling Order. Moreover, the procedure set out in the Commission's Scheduling Order provides both MPC and the parties an opportunity to be heard through the submission of a proposed order and comment an on opportunity for formal comments thereto. Sierra Club's opportunity to MPC's proposed order is more process than it is actually entitled to and is otherwise sufficient opportunity to be heard. 5. Gulf Power's Request to Retire Plant Daniel Should Not Impact the Commission's Decision in this Proceeding. MIss. CODE ANN. § 77-3-13 (8); see also RP 7.105(9) provides the following regarding hearings: "The Commission may grant a Certificate without a hearing in an uncontested case; however,the Commission may hear an uncontested case if it determines that the public interest will be served thereby. The Commission shall conduct a hearing on every Petition seeking authority to construct any facility for the generationof electricity, as set forth in Miss. Code Ann. §77-3-14." 11 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** Sierra Club also suggests in its Motion, that MPC is "ignoring" Gulf Power's requestto retire Plant Daniel. This is simply false. Gulf Power has notified MPC of its intention to retire Gulf Power's fifty percent (50%) undivided interest in Plant Daniel on January 15, 2024. The date of Gulfs intended retirement closure requirement date for the ash pond. is after the Most importantly, it is nearly three and one-half (3 ½) years after the CCR Rule prohibits receipt of any CCR and non-CCR waste streams into the Plant Daniel ash pond under the standard closure requirements. Finally, said date is after the latest retirement date allowed for ash ponds and generating facilities to operate under alternate closure procedures. In simpleterms, unless both Gulf Power and MPC were intending to retire Plant Daniel by October 17, 2023, the work proposed by MPC with respect to bottom ash and LVW would still have to be performed or otherwise addressed in order to continue to operate Plant Daniel after the October 31, 2020 deadline.14 Conclusion Sierra Club's Motion Should be Denied. 6. - In closing, MPC asks the Commission to deny Sierra Club's Motion to Require Supplementationof the Petition and proposal in this case a Revised Scheduling Order. The Company's is lawful, reasonable, and consistent with the Commission's practice and rules. The Commission's Scheduling Order issued in this proceeding is also lawful and consistent with Mississippilaw and the Commission's Rules. Sierra Club's failure to take any substantive role in this proceeding until September 12, 14 See generallyTestimony of Mark Loughman, pp. 11-13. 12 3692387 3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** 2019, over two (2) months after the Company's filing should not be rewarded by the Commission. Sierra Club's Motion should be denied. WHEREFORE, PREMISES CONSIDERED, Mississippi Power Company requests that the Commission deny Sierra Club's Motion to RequireSupplementation of the Petition and a Revised Scheduling Order. Respectfullysubmitted on this, the 30th day of September, 2019. MISSISSIPPI POWER COMPANY BY: BALCH & BINGHAM LLP BY: jÊICKY J. dOÉ 13 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** BEN H. STONE Mississippi Bar No. 7934 RICKY J. COX Mississippi Bar No. 9606 LEO E. MANUEL Mississippi Bar No. 101985 BALCH & BINGHAM LLP 1310 25th Avenue P. O. Box 130 Gulfport, MS 39502-0130 Tel: (228) 864-9900 Fax: (228) 864-8221 14 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** CERTIFICATE OF SERVICE I, RICKY J. COX, counsel for Mississippi Power Company in the Petition filed with the Mississippi Public Service Commission (the "Commission") of herewith do hereby certify that in compliancewith Rule Utilities 6 even date of the Commission's Public Rules of Practice and Procedure (the "Rules"): (1) An original and twelve (12) copies of the filing have been filed with the Commission by U.S. Mail to: Katherine Collier, Esq. Executive Secretary MississippiPublic Service Commission 501 North West Street, Suite 201A Jackson, MS 39201 (2) An electronic copy of the filing has been filed with the Commission via e-mail to the following address: efile.psc@psc.state.ms.us (3) A copy of the filing was served via U.S. Mail, postage prepaid, upon each of the following parties of record: Stephen Jackson, Esq. Cooperative Energy Frank Farmer, Esq. Mississippi Public Service Commission 501 North West Street, Suite 201A Box 15849 Hattiesburg, MS 39404-5849 P. O. Jackson, MS 39201 Robert Wiygul, Esq. Waltzer Wiygul & Garside 1011 Iberville Drive Ocean Springs, MS 39564 Mr. Virden Jones MississippiPublic Utilities Staff 501 North West Street, Suite 301B Jackson, MS 39201 David Tad Campbell,Esq. Mississippi Public Utilities Staff 501 North West Street, Suite 301B Jackson, MS 39201 15 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** (4) MPC has compliedwith or requested a waiver of all other requirements of this Commission's Rules. THIS, the 30th day of September, 2019. /Ricky J. Cox 16 3692387.3 **MSPSC Electronic Copy ** 2019-UA-116 Filed on 09/30/2019 ** '