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Choctaw County powering up with energy industry

T. Alan Bates calls it one of Mississippi’s best kept secrets. What is it, you ask? Choctaw County’s significant energy-related assets and the positive economic impact they have on the county.

“I’m not exactly sure what Reliant’s investment is in their plant at French Camp, but I would estimate the energy industry in Choctaw County comes to a total investment of approximately $1.5 billion,” said Bates, executive director of the Choctaw County Economic Development Foundation.

The centerpiece of the area’s energy assets remains the Red Hills Power Plant and the adjoining Mississippi Lignite Mining Company operation. However, the county counts other power-generation assets, and the Red Hills Ecoplex coupled with the region’s extensive lignite reserves has Bates and others optimistic that the county’s energy-related portfolio will only grow in the future.

Working together

Back in the 1970s, it was discovered that Mississippi held extensive reserves of lignite, a young coal that contains a high level of both moisture and ash and used almost exclusively for electric power generation. Geological studies found the state actually held eight separate lignite reserves stretching across a vast area from North to Central Mississippi.

While lignite makes a viable fuel for electric plants, its high moisture level makes it expensive to transport due to weight. While the area’s lignite reserves were readily available and could feed an electric power plant, that plant would need to be near the mine to make it economically feasible.

In the mid-1990s, a deal for such an operation was struck. A power plant would be built adjacent to the mining operation on a site near Ackerman. Lignite mined there would be transported the short distance to the power plant, which would solve the transportation cost issue while offering a readily available source of fuel via an untapped natural resource. It would be a truly “symbiotic” relationship, and when the Tennessee Valley Authority agreed to purchase the power plant’s output under a 30-year agreement, the deal was cemented.

Today, Suez Energy North America owns the Red Hills Power Plant, and Mississippi Lignite Mining Company, a business unit of the North American Coal Corporation (NACC), owns the mine. According to Mike Thomas, manager of land and government affairs, NACC-Red Hills Mine, the power plant represents an investment of approximately $500 million, while the mining operation rings in at approximately $120 million. Between the two operations, approximately 225 workers are employed.

The 10-story Red Hills Power Plant produces 440 megawatts of power using lignite mined from Mississippi Lignite Mining Company’s mammoth operation. The mining company, which asked for and received no taxpayer money for startup, supplies Red Hills with 3.7 million tons of lignite annually.

To give an idea of the scale of the operation, the mining company’s current surface pit is 8,000 feet long, 1,500 feet wide at the mouth and 250 feet deep. The dump trucks sport 10-foot-tall tires, and the bucket on the dragline is large enough to drive in a Chevy Suburban, open the doors and get out.

Digging up prospects

The Red Hills/Mississippi Lignite Mining operation has been so successful that the county is looking to expand this symbiotic-type development. Choctaw County has developed the Red Hills Ecoplex, a 137-acre industrial park sited directly across from Red Hills/Mississippi Lignite Mining. Bates and others are currently prospecting for tenants that would utilize the model established by Red Hills/Mississippi Lignite Mining.
vAnd, there is more potential for local lignite and its byproducts. One of these byproducts is ash, which is abundant in lignite. The ash makes a viable road-building material, and has already been used in such projects as Smith-Wills Stadium in Jackson and Trustmark Park in Pearl, and Mississippi Lignite Mining Company has used it to build roads for its massive equipment, roads that Thomas said has significantly reduced the company’s diesel consumption of 9,000 gallons per day.

Lignite can also be used in power plants designed to burn other fuels. Thomas said natural gas-fired power plants may be converted easily to burn lignite. The aforementioned Reliant plant in French Camp is now mothballed, and there are numerous merchant plants around the state that are either idled or in limited production. Thomas sees lignite as a possible solution to get these plants up and running fully.

Thomas said lignite is also a viable fuel for coal-to-liquid technology. This clean coal technology converts coal into diesel fuel, which has a number of advantages over traditional diesel, particularly in the areas of environmental safety and shelf life.

Thomas said testing has shown that lignite lends itself to gasification and liquefying, and is a viable option for coal-to-liquid producers. Both he and Bates envision a coal-gasifier facility in Choctaw County. If that came to fruition, it would significantly add to the area’s energy-related assets — the men estimated the cost of construction at $600 million to $800 million for a 250-megawatt plant that would employ as many as 250 workers.

In the meantime, the county continues to build on its power-generation portfolio. The first turbine for a natural gas-fired, 720-megawatt plant in Choctaw County is expected to be commissioned this month, with a second earmarked for commissioning in March 2007. The estimated capital investment here is approximately $430 million, and it will employ 25 workers.

“The Mississippi Lignite Mining Company is the largest employer we have,” Bates said. “It and the Red Hills Power Plant have been a huge success, and we’re doing whatever we can to promote what they’re doing. We just want people to know what’s going on up here.”

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.

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