JACKSON - The Mississippi Supreme Court ruled Thursday that state regulators failed to lay out their reasoning clearly when they eased the financial terms under which Mississippi Power Co. could build what it calls Plant Ratcliffe in Kemper County.
In a unanimous ruling, the court told the Public Service Commission to clarify how it decided to allow construction of a power plant last year.
The Sierra Club sought to persuade the Supreme Court to derail the $2.7 billion power plant, now under construction in Kemper County's Liberty community.
The key issue was not whether the plant is a good idea, but whether the PSC adequately laid out its rationale.
Supreme Court Presiding Justice Jess Dickinson wrote that the absence of specific findings clouded the PSC's decision. Dickinson said without such details the court cannot determine if the PSC decision was supported by the evidence.
Mississippi Power Co. attorneys were reviewing the ruling, said spokesman Jeff Shepard.
PSC member Brandon Presley, who represents the northern district on the three-member board, had opposed the project.
"I was the only one saying the (company's) burden of proof had not been met. This brings everything back to the table ... the entire case. I expect a rigorous debate about this issue," Presley said Thursday.
"What the Supreme Court has said is there was no basis in fact for them giving Mississippi Power that permit. There were no facts to substantiate that decision," said Louie Miller of the Sierra Club in Mississippi.
Last March, Harrison County Chancery Judge Jim Persons dismissed a Sierra Club challenge to the PSC's approval of the project.
The Sierra Club and other environmental groups claim the project is dirty, expensive and unnecessary. The Sierra Club also opposes plans to pass over $2.8 billion in construction costs on to ratepayers.
Mississippi Power says rates will go up about 33 percent to pay for the plant. However, the Sierra Club says the figure is closer to 45 percent.
Mississippi Power says the plant is needed to provide more electricity for its 193,000 customers scattered from Meridian to the Gulf Coast.
The PSC originally voted in April 2010 to cap at $2.4 billion the amount that Mississippi Power could charge ratepayers for the plant. The company is also getting about $300 million in federal assistance. Commissioners also said the power company couldn't charge ratepayers for the plant before it started operation.
Mississippi Power said it couldn't build under those conditions and asked the PSC to reconsider. Lawyers for the company said it needed wiggle room for cost overruns, and wanted to charge ratepayers early to cut the interest customers would pay on money borrowed for the project.
A month later, commissioners voted 2-1 to give Mississippi Power what it wanted, raising the cost cap by 20 percent, to $2.88 billion. The commission must still agree that company spending is "prudent" for it to collect any money, even below $2.4 billion. It also allowed Mississippi Power to start charging before the plant's scheduled start in 2014. Under state law, Mississippi Power can keep the money even if the plant is never completed.
PSC members Leonard Bentz of the southern district and Lynn Posey of the central district voted for the amended conditions.