This Power Plant Got 100’s of Millions in Federal Subsidies…Now Look How it’s Doing

Written by Philip Hodges

We’ve seen this story so many times. The only things that change are the names.

Solyndra was the famous solar panel manufacturer that was touted by the Obama administration as a “job-creator” and received $535 million in federal subsidies. Since its failure and bankruptcy, it’s set the standard pretty low for any kind of federally-subsidized energy project.

One such energy project was a so-called “clean coal” plant built in Kemper County, Mississippi. They call it clean coal, because liberals are always talking about how “dirty” coal is as a source of energy. But this particular plant was innovative in that it used “carbon capturing” technology. All the carbon emissions were captured so that none of it would emanate into the atmosphere and contribute to global warming – or, climate change. So, even liberals liked the idea.

The plant – owned by Southern Company – broke ground in 2010 with bipartisan support and hundreds of millions of dollars in federal subsidies. From the New York Times:

The company and regulators were eager to qualify for hundreds of millions of dollars in federal subsidies for the plant, which was also aggressively promoted by Haley Barbour, who was Southern’s chief lobbyist before becoming the governor of Mississippi. Once in office, Mr. Barbour signed a law in 2008 that allowed much of the cost of building any new power plants to be passed on to ratepayers before they are built.

Haley Barbour was Mississippi’s Republican governor during this time. But before he was governor, he was a lobbyist for Southern Company. And then, when he became governor, he got his old buddies at Southern Company a ton of federal subsidy money to break ground on a clean coal plant. On top of that, he had signed a law allowing power plants to pass on the costs of construction to the ratepayers instead of the investors. I think this is what you call “crony capitalism.”

Already, you can see the plant is off to a bad start. With this kind of conflict of interest and corruption, how could it survive?

Six years later, we’re finding that it probably won’t survive. Here’s the Times again:

The Kemper coal plant is more than two years behind schedule and more than $4 billion over its initial budget, $2.4 billion, and it is still not operational.

According to one whistleblower and numerous secretly recorded (but legal) conversations he had with fellow employees, the plant’s failures have nothing to do with the technology, but everything to do with mismanagement:

…[T]he plant’s owners drastically understated the project’s cost and timetable, and repeatedly tried to conceal problems as they emerged.

Now, the plant is under investigation for fraud by the Securities and Exchange Commission. In addition, Southern Company – the plant’s owner – is being sued by the ratepayers.

The plant was supposed to be another one of those “job-creators.” While it did provide jobs for some residents in Mississippi – the poorest state in the country – it also has led to other companies laying off their employees because of exorbitant electricity prices. Even the University of Mississippi raised their tuition by $236 per student “partly to offset its additional $1 million in higher electrical costs.” (Remember that part about how then-Governor Barbour signed a law allowing plants to have their ratepayers pay for construction?)

It’s never a good idea to have the government get involved in the marketplace to this degree. Gross mismanagement; trying to conceal problems; being vastly over-budget; being years behind schedule, yet still not operational; and worst of all, the company’s leaders are still getting paid. These are all hallmarks of a government-run operation.

It’s clear that neither side of the aisle is truly interested in “clean” energy. What they’re mostly concerned with is money and power, and those things are obtained easily through politics.

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Philip Hodges

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