How a Major Coal Blunder Gave Mississippi a Chance for Cleaner Air

The Jack Watson Electric Generating Plant’s two massive exhaust stacks have dominated the horizon of Gulfport, Mississippi, since 1957. In the following years, a mixed-race, middle-income community of builders and blue collar workers sprawled cautiously around it.

Carl Richardson, a mechanic at a local retail chain that handles tire replacement, moved into the nearby Loren D Heights subdivision in 1980. He said the smoke and fumes billowing out of the plant had become such a customary part of his morning commute that he couldn’t even recall the plume’s color. Coastal Mississippi’s atmosphere is typically dense with moisture on most days, creating a near-constant natural haze. The exhaust emitted from the Jack Watson plant was just one more voluminous vapor clouding an already stuffy skyline.

Like the sticky air, Richardson had accepted the crusty, inky blots on his car as a fact of life.

“They were about the size of a Cheerio, and they covered your car all night while you slept,” he said. “My neighbor across the street, he owned a white Cadillac. Man, he would get upset at what it did to his paint. He’d call the EPA and everything, but nobody could ever tell him what was going on.”

It’s been about a year since the Jack Watson plant went “clean” with natural gas in April 2015. Its enormous exhaust stacks now emit nothing visible to the naked eye. The once moderate-income community around it has also evolved, adding new middle-class housing construction in some sections and business-zoned construction in others. Nobody talks anymore about itchy eyes or spontaneous Dalmatian-hue paint jobs in the middle of the night.

This improvement nearly didn’t happen, however. In fact, based upon past experience, it shouldn’t have happened at all—not in Mississippi.

“We fought for ages to get the power company to shut it down, convert it, clean it, or something, but we never got any traction,” said Gulfport resident Ruth Story, who was active in the local NAACP.

Unlike Richardson, Story said she remembered exactly what the Jack Watson plant’s exhaust plume looked like. “It was black and ugly. It looked as dangerous as it was.”

“We fought for ages to get the power company to shut it down.”

It did not seem to matter that the Environmental Protection Agency rated this plant as the second-worst sulfur dioxide polluter in the nation—pumping out an estimated 63,306 tons of sulfur dioxide in 2013—or that the Clean Air Task Force attributed 17 deaths to the plant in 2012. The Jack Watson plant was one of four coal plants in Mississippi that helped this modestly populated state pump out 9.2 million metric tons of carbon dioxide in 2013, but converting it seemed out of the question. Government decisions in Mississippi are largely influenced, if not determined, by corporate demands.

“If you want to know why we’re coming up last in [the race toward] renewable energy, just look at the money working against us,” said Louie Miller, director of the Mississippi Sierra Club. “It’s absolutely obscene.”

Mississippi Power Company (MPC), which owns the Jack Watson plant, is the state’s largest utility and a subsidiary of Southern Company, which held $78 billion in assets at the time of its 2015 annual report. Since 1998, Southern Company has invested a total of $187 million in political lobbying, according to OpenSecrets.

Each session, power companies’ lobbyists swarm the state Capitol, derailing progressive energy laws, Miller said. They buy big, beautiful, expensive ads in struggling local papers, effectively silencing many editorial critics on some of their more outrageous proposals. Convictions of public officials and patterns in state spending caused researchers to list Mississippi as the nation’s most corrupt state in 2014.

Nevertheless, it was in this impossible environment that community activists managed to strong-arm facility owners into converting the Jack Watson plant’s final two coal-burning units to natural gas. Out-funded and out-matched in political brawn, the movement found an unlikely victory in a legal settlement over an entirely different MPC-owned, coal-burning plant 200 miles north.

The overreach

In 2007, MPC filed a permit application with the Mississippi Department of Environmental Quality that led to the announcement of an experimental, never-before-seen $2.4 billion power generator in Kemper County. The proposed plant would cook flammable gas out of low-grade lignite coal while capturing the resulting carbon to sell to the oil industry.

“[T]hey screwed up on this new lignite-burning coal plant,” said Miller, who describes Mississippi’s lignite coal reserves as “wet, soppy, petrified wood crap.”

“Seriously, used baby diapers would’ve burned better,” he claims.

Costs for this prototype power plant spiraled quickly out of control, and the Mississippi Public Service Commission, which approves most state electricity rate increases, soon faced its first Kemper facility cost increase in 2010, when MPC asked the commission to up the construction price to $2.88 billion.

The two Republican members of the three-person commission approved the rate increase with a majority vote. The other member, Democrat Brandon Presley, rejected the request on the grounds that no new information had been provided to warrant the increase.

“Gov. Haley Barbour sent us a letter saying that [U.S. Department of Energy] Secretary Steven Chu supported the plant, but if Barbour and Chu wanted the thing so bad then they should pay for it, not Mississippi ratepayers,” Presley said.

The governor’s influence went deeper than simple political cheerleading. Of all the lobbyists Southern Company had financed since 1998, one of their biggest was Washington firm Barbour, Griffith & Rogers, of which Barbour was the founding partner.

Outraged, the Mississippi Sierra Club filed a lawsuit in Harrison County Chancery Court, calling the reversal “arbitrary” and “capricious.” Then, in a different lawsuit over the same plant, MPC customer Thomas Blanton attacked the legality of MPC’s rate increase. The state legislature had passed a new law allowing MPC to charge customers for the plant before it was producing electricity, but Blanton argued that state law also demanded that construction costs be “prudently incurred.”

That prudence question got very serious after plant costs continued to explode up to $6.7 billion, which is greater than the state’s annual budget. The utility company claimed it would absorb most of those cost overruns and leave customers paying only $2.8 billion. However, since MPC’s only source of income is its 186,000 customers, Miller said ratepayers are likely on the hook for the full price of $35,000 per customer unless the company somehow spreads the damage over its parent company’s base of 4.5 million customers.

The most recent agreement between Southern Company and the majority-Republican commission let MPC raise rates by 18 percent late last year. That increases a monthly bill from $121 to $144 for any residential customer who uses 1,000 kilowatt hours per month. A $23 increase doesn’t sound like much until the median annual household income dips to $12,000, which is common in Mississippi. Additional charges also mount when businesses such as grocery stores, gas stations, and colleges (which use considerably more than 1,000 kilowatt hours per month) must then pass those cost increases down to their customers through pricey eggs or tuition hikes.

In a final outlandish blow, the Public Service Commission voted to grant MPC’s request to seal the long-range rate-impact information and hide the projected rate increases from public view, so MPC customers didn’t actually know how hard the project would hit their future monthly bills.

Surprisingly, Mississippi’s typically corporate-friendly supreme court ultimately sided with Blanton, reversing the 18-percent rate increases for 2013 and 2014 and ordering the company to refund $281 million to customers. Deprived of a clear payment plan for the increasingly costly plant, the Securities Exchange Commission launched a formal investigation of Southern Company and MPC. A Moody’s Investor Service credit downgrade soon followed.

As costs and pressure grew, MPC decided to end at least one of its headaches by settling the Mississippi Sierra Club suit.

As part of the terms of that 2014 settlement, MPC agreed to convert the remaining two coal-burning units at the Jack Watson plant to natural gas. As a bonus, and partially due to federal pressure to lower carbon emissions, the company also agreed to convert out-of-state coal facility Plant Greene County in Alabama.

MPC spokesman Jeff Shepard said the conversion also helped the company avoid “the expense of adding extensive environmental controls to meet new EPA environmental requirements by 2016.”

Shepard claims nobody was fired during the conversion because the company had been “reducing employee headcount through attrition and job transfers for several years.”

Flinda Hill, a 37-year MPC employee who retired at the time of the conversion, said all her co-workers who were no longer needed at the plant were reassigned offsite.

“[A] natural gas plant isn’t just a space heater, not on [the Jack Watson plant’s] scale anyway,” Hill said. “It’s really big. It takes basically the same number of operators.”

As a settlement bonus, the company also agreed not to oppose solar-friendly net-metering policies currently being developed by the Public Service Commission or to block net-metering bills in the state legislature.

For their part, the Mississippi Sierra Club agreed to pull its challenges against the Kemper project and an unrelated MPC coal-fired plant near Escatawpa, Mississippi.

With $2 million in precious Sierra Club money already invested in an uphill suit, Miller said the club couldn’t have gotten a sweeter deal. “We asked for the moon and the stars, and they gave us the moon.”

It’s about justice

The Sierra Club aligned with about 45 nonprofit, community, and civic organizations in the years leading up to the Jack Watson plant conversion. The Mississippi branch of the NAACP jumped into the fight with them early on, for some very clear reasons.

The Congressional Black Caucus Foundation revealed in a 2004 report that, per capita, African Americans are responsible for 20 percent fewer greenhouse gas emissions than Whites due to economic limitations—less money means less travel and energy-intensive toys and food. But even though Blacks emit less greenhouse gases, 71 percent of them live in counties that violate federal air pollution standards, according to the Black Leadership Forum. That may be because 78 percent of the Black population—which only comprises about 13 percent of the total U.S. population—lives within 30 miles of a coal-fired plant, according to an NAACP report.

Perhaps not surprisingly, Blacks are also almost three times more likely than Whites to die or be hospitalized from respiratory diseases like asthma, possibly connected to air pollution, according to the Environmental Justice and Climate Change Initiative. The issue is apparently serious enough for the U.S. Commission on Civil Rights to hold hearings on it this year.

This disparity begins with the sad fact that communities require the finances to pressure local politicians into keeping smelly things out of their backyards. They also need the luxury of free time to dedicate to shouting at council or county supervisor meetings, which is difficult if the brunt of the community is working several part-time jobs to sustain itself.

The neighborhoods surrounding the Jack Watson plant illustrate this trend. Census figures reveal a population around the plant that is comparatively lower-income and considerable more racially diverse than other populations in the area.

While Jack Watson plant neighbors arrived after construction, chasing affordable property prices, racist community planners have a history of targeting low-income, minority communities with toxic sources, and then ignoring alarms over the inevitable consequences, said Marianne Engelman Lado, a senior staff attorney at Earthjustice.

“Look at what happened in Flint, where communities came forward and said, ‘Our water’s dirty,’ and, ‘We have a problem here,’ but people dismissed their claim and ignored them until it was scientifically verified,” Lado said. “People do raise their voice, but when nobody listens, it’s an exercise in frustration.”

The long road ahead

NAACP board of directors member Kathy Egland is both grateful and surprised that circumstances turned in favor of the Jack Watson plant community, but she says a natural gas conversion wasn’t at all the best Mississippi could do this late in the climate game.

“Natural gas is just not a good energy alternative,” she said. “We really need to get completely away from fossil fuels.”

While natural gas releases roughly half the carbon of coal when burned, its transport lines and source wells hemorrhage methane, which is an even more effective greenhouse gas than carbon dioxide.

Egland has been educating communities about the rewards of solar technology, but her message is getting rolled by energy sector apologists selling class warfare. One argument is that if power companies are forced to encourage home electricity generation by buying back ratepayer-generated electricity at market value, they will have to raise other customers’ rates to offset the new costs or even cut jobs.

“The companies are painting the whole thing as a subsidy for rich people who can afford home electricity generation at the expense of the poor,” Egland said. “All of the sudden there’s all this concern about low-income minority people, even though I don’t know where their concern was during all these years of endangering poor minorities with their coal plants.”

Egland says much of her target audience has no college degree and is politically disinterested. She claims they occasionally don’t recognize words like “carbon taxes” or “sequestration.” Education, for them, sometimes starts at square one.

Still, the fight is looking better this year with a new Public Service Commission that’s willing to embrace net metering and renewable energy policies.

“We absolutely broke their ass in the last election,” Miller said.

The commission now contains two Democrats and one Republican, who all ran against the Kemper quagmire. This is a big deal in Mississippi, where a Republican occupies every statewide office except that of the attorney general.

“The new folks, they’re like Fred Astair and Ginger Rogers. It’s nothing like it was before,” Miller said, referring to the iconically cordial dance partnership of the 1930s.

Fledgling Public Service Commissioner Cecil Brown acknowledges that he rode into the commission on a blazing rocket of disgust aimed squarely at MPC. “People in government always have to labor over how to get folks’ attention on the serious issues, and they sometimes don’t really see the importance until they really feel the pain,” said Brown, who now completes the first united Public Service Commission front favoring net metering and renewable energy policies in Mississippi. “People had to personally hurt and get angry for change to finally happen. It’s a shame that that’s what it took.”

With any luck, he says, it won’t take another bout of sheer idiocy to kick Mississippi further into the future.

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