SME Joins Petition to Challenge CPP


(October 26,2015) Hattiesburg-based South Mississippi Electric (SME) joined a petition filed Oct. 23, 2015, by the National Rural Electric Cooperative Association (NRECA) challenging the federal government’s Clean Power Plan, an ill-advised regulation that will harm SME’s members through higher rates and less reliable service.

SME is one of 37 non-profit electrical cooperatives from across the country listed in the petition, a necessary recourse after the Environmental Protection Agency’s plan was filed into the Federal Register. NRECA filed the petition in the D.C. Circuit Court of appeals Washington, D.C., asking the court to review the EPA’s plan and recognize its lack of legal authority. The NRECA said “these complicated regulations will force cooperatives to close power plants which are producing affordable electricity for consumers who were counting on them for decades to come. Co-op consumer-members will be saddled with higher energy bills as a result of this regulatory over-reach.”

SME is a cooperative owned by 419,000 members across 55 counties, primarily in rural areas. SME generates and transmits electricity which is then distributed through 11 electric power cooperatives to residential and commercial members. Collectively the group is known as the Power of 12.

“South Mississippi Electric has been pursuing lower carbon output from its generation sources for a decade, at an affordable cost while maintaining reliability,” said Jim Compton, CEO of South Mississippi Electric. “We strongly object to the EPA’s Clean Power Plan as it goes beyond carbon dioxide reduction at power plants and instead is a mandate to change from fossil fuels to renewable energy in a very short time, and without regard to cost and reliability impacts. Our Members have approved a legal challenge to the rule in order to protect our ratepayers.”

NRECA and the generation cooperatives join a growing number of utilities, governments and consumer groups opposed to the CPP. Previously, 15 states filed suits to block the plan they say is illegal under the Clean Air Act.

The 1,560-page final version of the CPP aims to reduce carbon dioxide emissions by 32 percent within 15 years. The plan will require individual states to meet specific standards with respect to reduction of carbon emissions, depending on their energy consumption. The CPP is scheduled to take effect 60 days after the filing, December 23.

The CPP originally proposed was projected to increase electricity rates in Mississippi by 10 percent, possibly higher.

The increased costs would especially hurt low and middle income families, and senior citizens on fixed incomes. In Mississippi, 61 percent of households have incomes of $50,000 or less before taxes. As a result, lower-income Mississippians spend 25 percent of their take-home income on energy costs with middle-income families spending roughly 19 percent.

President Obama’s administration has pushed for implementation of the CPP to reduce carbon emissions from existing generating units. SME said it would be forced to reduce emissions by 18 percent from 2012 but would not be credited for reducing emissions by 43 percent since 2005 at a cost of more than $560 million. Those initial reductions were done without government mandates.

Compton noted that when SME constructed its R.D. Morrow, Sr. Generating Station near Purvis, Miss., the federal government mandated coal generation plants be built rather than gas generation. The EPA now has announced its intentions to phase out coal generation facilities in favor of other energy sources, especially renewables, although many of the coal plants have years of remaining useful service and remaining debt.

“The CPP is unprecedented in the capital requirements that would be required by cooperatives, which for decades have provided safe, affordable and reliable electricity to millions of citizens,” said Compton. “In essence, it would be all pain and no gain as the CPP would provide little environmental benefits when fully implemented by 2030.”

About South Mississippi Electric and the Power of 12

The Power of 12 is South Mississippi Electric and 11 electric cooperatives working together to provide safe, reliable and affordable power from the Delta to the Coast. These 11 electric cooperatives own and maintain approximately 57,010 miles of distribution lines and provide service to approximately 419,000 homes and businesses throughout 55 counties.