"We are the Saudi Arabia of coal — very high quality stuff. We've got to find a way to continue to preserve that important national energy resource to be used for the benefit of our citizens," Fanning said. "What we're doing here in Kemper County, I think, may be a way forward for coal in America. It is that important."
The Sierra Club — which opposes coal-burning plants nationally — claims the plant could harm the environment and raise customer bills by 45 percent or more. Mississippi Power says the rise in bills would be closer to 33 percent before falling.
Kemper, though smaller, may be financially riskier than Vogtle. In Georgia, Southern is already collecting its financing costs from ratepayers, and regulators are approving company expenditures every six months, though they can still challenge that spending at the end of the project. Mississippi Power — Southern's smallest subsidiary with 186,000 customers — hasn't won regulator approval to collect any money it's spent on Kemper.
The Mississippi Public Service Commission's decision to hold off on rate increases until legal challenges are resolved stunned executives and investors, especially considering a 2008 state law allowed rate increases during construction.
"That decision surprised the investment community and we saw it our stock price," Fanning said.
The Sierra Club says Southern should convert the plant to burn natural gas, an expense that could still be costly for shareholders and ratepayers. Opponents say Mississippi Power would end up spending less money than finishing Kemper, but the company would probably try to recoup the money it's already spent.
"I think they've painted themselves into a pretty tight little corner, said Louie Miller, head of the Sierra Club's Mississippi chapter. "They decided they were going to build this thing come hell or high water."
In the 1970s, a giant construction program brought Southern to the edge of insolvency. High inflation and interest rates made it almost impossible to borrow money to complete plants in its four-state territory. The subsidiaries struggled to win rate increases from hostile state regulators, and nuclear plant overruns ballooned under new safety demands after 1979's Three Mile Island incident.
The company history says that at one point in 1979, Mississippi Power was down to less than six months of operating cash.
The company eventually patched things up with regulators and finished its construction marathon, but not before shareholders ate $1 billion in overruns at Vogtle.
"It was like you had your hands on something big that you couldn't control," Ed Addison, Southern CEO from 1983 to 1995, said in the company history. "You couldn't stop because ... too much was already invested in it."
Fanning argues this time is different because inflation and interest rates are low and Southern has gotten better at big construction projects.
"Everything that I know, this plant was exceedingly well-built and well organized during the construction period," Fanning said. "I suppose there is a theoretical risk of prudency. But in my view, this company is executing like no company in the United States."
He is comfortable with the chips he has on the table.
"Now look, I am not a skeptic of natural gas more than any other fuel. But you cannot plan to put all your eggs in that basket. That is imprudent," he said. "What Mississippi is doing here is a big bet. But ultimately, long-term, it will serve well the interests of the families we serve here in Mississippi."
Online: Mississippi Power on Kemper: http://www.mississippipower.com/kemper/home.asp
Sierra Club on Kemper: http://www.sierraclub.org/environmentallaw/lawsuits/0485.aspx
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