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The Associated Press October 8, 2010, 7:58AM ET

Miss. justices send coal suit back to lower court

The state Supreme Court has sent back to a chancery court a lawsuit that seeks to block a coal-fired, electric-generating plant in east-central Mississippi.

The lawsuit was in response to the Mississippi Public Service Commission's decision to ease restrictions it had put on the project in Kemper County. The Sierra Club has said the plant is unneccesary and would lead to a significant increase for ratepayers before the plant is even built by Mississippi Power Co.

Justices in a Thursday order denied Mississippi Power's motion asking the high court to intervene in the case. The Supreme Court also dismissed an appeal by the Sierra Club in response to the power company's motion, sending it back to Harrison County Chancery Court.

"It means the appeal is going to be heard in Harrison County, which is where it ought to be heard since that's around the area that's going to be affected," said Robert Wiygul, an Ocean Springs attorney representing the Sierra Club.

Verdell Hawkins, corporate spokesman for Mississippi Power, said the court's order determined chancery court is the proper venue for the matter.

"We, along with the attorneys for the Public Service Commission, can now begin to defend the appeal," Hawkins said in a statement to The Associated Press. "We are still confident that the commission's order authorizing the construction of the Kemper Plant is lawful and well reasoned, and look forward to briefing the merits of the case with the court."

In May, the PSC voted 2-1 to ease restrictions it earlier had placed on the plant, allowing Mississippi Power's construction costs passed on to ratepayers to be no more than $2.88 billion. The PSC said the costs could go no higher unless it could show that concrete, steel and other building costs went up.

The PSC said the rate increases could not occur until Jan. 1, 2012.

In an earlier decision, the PSC had capped construction at $2.4 billion, but the utility said that condition and others made it impossible to finance or build the plant.

Wiygul said he expects the case to "get a good judicial review" in chancery court.

"It's a victory for consumers who want this project to get the kind of review it needs to get," Wiygul said Thursday.

Mississippi Power, a subsidiary of the Atlanta-based Southern Co., has said the plant would use a new technology that converts lignite into a gas that would fuel turbines to create electricity. Company officials said the lignite would be locally mined and would be cheaper than natural gas.

The proposed 582-megawatt plant is expected to begin generating power by 2014, according to the utility. Company officials said it would create 260 permanent jobs and 1,000 jobs during the construction phase.

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