Miss. Power wants another rate increase

January 27, 2011

Business, Energy

By Amy McCullough

Here we go again. The Kemper County clean coal plant got approved this summer, but Mississippi Power Company (MPC) and the state Public Service Commission are still continuing the coal vs. natural gas debate that we first began writing about in December 2009.

This time the subject is MPC’s coal-fired Plant Daniel in Jackson County. If that doesn’t get several million worth of environmental improvements by 2015, it will be shut down by the EPA.

At this week’s hearing in Jackson, MPC made its case that the Commission needs to approve the project, which will cost customers $312 million, a.s.a.p., since it will take four years to complete.

The project, called scrubbing, would add about $4 per month to residential customers’ monthly electric bills.

If Plant Daniel is shut down, MPC will have to use more electricity produced by natural gas-fired power plants, which the company says is risky, since natural gas prices have historically been volatile. Without Daniel, MPC’s fleet would mainly consist of natural gas-fired generation along with lignite coal-fired Kemper and some renewables. MPC urged Commissioners to approve the $2.4 billion Kemper County IGCC Project based on the argument that using lignite coal for fuel would be cheaper than natural gas.

Natural gas advocates who tout recent access to a glut of natural gas from rock shale — which can be obtained through a new drilling technology called fracturing — have predicted, along with the U.S. Energy Information Administration, that gas prices will be low in the future.

The Commission may vote on the Daniel project at a February meeting.

Read more in next week’s Jan. 31 edition of the Mississippi Business Journal.

Contact writer Amy McCullough at amy.mccullough @ msbusiness.com.

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