Home » NEWS » LS Power-Pike Energy plans $600-million power facility
Construction expected to create 600 jobs

LS Power-Pike Energy plans $600-million power facility

MCCOMB – A new $600-million electric power generating facility proposed by LS Power-Pike Energy, LLC, would represent the largest economic development

by far in the history of Pike County.

“The closest thing to it is couple of $20-million plants that have located here in the past,” said J. Britt Herrin, executive director of the Pike County Economic

Development District. “And that doesn’t even come close to this investment. It is just huge. The community is very excited about having that type of investment in the

community.”

Herrin said the biggest economic impact from the project would be during the construction phase. At peak construction an estimated 600 workers would be needed,

which would have a major positive impact on revenues at local hotels, restaurants, gas stations, stores, and service businesses.

“We’ve had a good retail boom here, but this project is going to kick it up a couple notches,” Herrin said. “It is expected that it will take two years to build the plant,

and those two years will be really good for our local retail and service economy.”

Herrin said the project would also generate strong tax revenues for the county and the North Pike School District. The project would be located about four miles from

McComb. In addition, Herrin said the long-term impacts include enhancing the area’s economic viability by having a local source of electricity, which would improve

opportunities to recruit energy-intensive industries.

Currently there are no generating facilities in Pike County. The closest generating plants are an Entergy facility in Natchez, and Entergy’s Grand Gulf Nuclear Power

Plant in Port Gibson.

Projects that invest in excess of $100 million in Mississippi are allowed to negotiate a fee in lieu of taxes. LS Power-Pike Energy, LLC, was given a two-thirds

property tax exemption for a 10-year period.

“That is still a lot of money,” Herrin said. “LS Power will provide road improvements, so we’re not going to have to spend a dime on that. There may be some worker

training provided by the community college, and we see that as a benefit to individuals locally who want to work in plant.”

Bob Reymond, project manager for LS Power-Pike Energy, LLC, said the proposed facility would generate about 1100 megawatts (MW) of power from four

180-200 MW natural gas fired combustion turbines. Each combined cycle unit would include one 180-200 MW combustion turbine generator, one heat recovery

steam generator, and one steam turbine generator rated at about 80-100 MW.

Reymond said Pike County was selected as the site for LS Power’s second facility in Mississippi because of excellent access to natural gas pipelines, good access to

the Entergy transmission system, and the availability of a river nearby for cooling water. LS Power, which is headquartered in St. Louis, Mo., already has one

generating facility on line in Mississippi at Batesville. Reymond said the 840-MW combined cycle units in Batesville are quite similar to those proposed near McComb.

Reymond said the electricity generated at the Batesville facility is sold under long-term power purchase agreements to Virginia Power and Aquila Energy, Kansas City,

both electric power traders active in the wholesale electricity market. The electricity from the proposed Pike County plant would be sold by LS Power on the

wholesale market.

Currently construction of new power plants is the largest growth industry in Mississippi with billions of dollars worth of projects either under construction or on the

drawing boards. Questions have been raised about whether the market can support that many new facilities and if possibly the region could be headed towards an

oversupply of electricity.

“In any business, if overabundance occurs, that affects prices,” Reymond said. “That’s good for consumers. Obviously, at same time we don’t think we are in

overbuild situation because we are building the plant in McComb. We see there is, in fact, a need in this region for more power.”

Possible customers for electricity at the McComb facility could include Southern Company, which operates Mississippi Power Company and a number of other

regional electrical companies in the South, Entergy and rural electric cooperatives.

“Entergy is a very good market,” Reymond said.

All of the new power plants planned in Mississippi plan to use natural gas as the fuel source. While natural gas power plants produce less pollution than coal-fired

plants, it is yet to be seen how the shift to producing electricity from natural gas will impact prices of gas. Previously natural gas prices have been low in the summer

when usage was low, and higher in the winter when there is more demand for natural gas for heating. With demand high also in the summer, it would be expected that

natural gas prices would increase.

The current high natural gas prices have been a problem especially for small- and medium-sized companies in Mississippi whose bills for natural gas have skyrocketed

this year. Reymond said he doesn’t believe the current high prices for natural gas will be seen in the long term. He said it is possible that having greater demand for

natural gas for the power plants will increase incentives for exploration and production of natural gas.

“Most gas companies haven’t done much new gas production in the past few years,” Reymond said. “Now they are trying to catch up. There is probably a lot of

opportunity in that business right now.”

Herrin said he believes it is an advantage for Mississippi to be attracting so many new power plants.

“To be in a state with an energy surplus is going to be a definite asset,” Herrin said.

“We have billions of dollars worth of investments going into plants across the state. I think that is a tremendously good thing. This is the wave of the future for creating

electricity, and I think it is a great thing our state is a leader in this.”

Kurt Brautigam, a spokesman for Mississippi Power Company (MPC), said he wouldn’t be surprised if natural gas prices increase as a result of the large number of

new plants being sited in Mississippi. MPC will see an increase in generating capacity of about 40 percent next spring when two natural-gas fired units in Escatawpa

come on line. The company’s two other largest generating facilities in Gulfport and Escatawpa are coal-fired.

“Coal is a very stable, very much available, and a very efficient fuel,” Brautigam said.

“Overall for the state from the electricity supply standpoint, all these new power plants are a good thing. But when get into the kind of demand for natural gas that will

be created by these plants, it is certainly possible for natural gas prices to rise, which would less desirable. We hope that isn’t the case, but that certainly wouldn’t be a

surprising thing. We try to diversify our options on fuel supplies between coal and natural gas as much as possible to maximize our options.”

Contact MBJ staff writer Becky Gillette at mullein@datasync.com or (228) 872-3457.

About Becky Gillette

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