Southern Co. to partner with Texas company to market controversial Kemper coal technology
by Clay Chandler
Published: November 2,2012
Southern Co., the parent company of Mississippi Power Co., is partnering with a Texas based-firm that owns part of the technology that will be used at the Kemper County coal plant to market the technology to power companies worldwide.
Southern Co. developed the Transport Integrated Gasification (TRIG) technology with Houston-based KBR. The process uses low-rank coal, like the lignite coal found in East Mississippi.
Officials from each company said in an Oct. 29 press release that KBR, which has been involved in the construction of the Kemper facility since it started in 2010, will handle most of the marketing and sales portion of the agreement. Southern will concentrate on engineering, delivery and operations.
The Kemper plant has been a source of disagreement since the Mississippi Public Service Commission started evidentiary hearings in 2009. The Commission initially put a $2.4 billion cap on the amount Mississippi Power, a subsidiary of Southern that will operate the plant, could pass on to its customers. Commissioners later raised that cap to $2.88 billion. Monthly reports filed by PSC-hired and company-hired independent monitors have indicated since mid-summer that the plant’s cost would reach the cap, despite MPC’s assertion during evidentiary hearings that it could build it for the original cap of $2.4 billion. The plant is scheduled to start operation in May 2014.
That is, unless the Sierra Club is successful in halting it. The environmental advocacy group and the company still await a ruling from a Harrison County chancellor on whether the second certificate of public convenience and necessity the PSC issued last spring is valid. A second certificate became necessary in March after the Mississippi Supreme Court ruled that the first one did not cite sufficient evidence from the record.
In June, commissioners voted 3-0 to not entertain any rate increase requests related to the plant until the state’s high court settles the latest round of litigation surrounding it. That vote came right after Mississippi Power had asked for a 13 percent rate increase in that would have generated about $58 million. Until then most votes on the plant had been split 2-1, with Northern District Commissioner Brandon Presley opposing it.
One of Presley’s main concerns was the risk Mississippi Power’s nearly 190,000 ratepayers would bear to build a plant whose technology is unproven on a commercial scale.
That’s the same technology Southern Co. and KBR plan to market and sell. Prior to this agreement, Southern Company and KBR licensed TRIG to the Tian Ming Electric Power Company for a facility under construction in China.
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