The state Public Service Commission (PSC) decided in a Nov. 9 vote that Mississippi Power Company has demonstrated a need for more electrical generation by 2014.
The PSC will continue a second phase of hearings Feb. 1, 2010, to consider the solution to the need, for which Mississippi Power has proposed a $2.2-billion lignite coal plant in Kemper County near the Alabama state line. Public Service Commissioner Leonard Bentz said in a previous interview that wind, solar and other technologies as well as independent power plant solutions for meeting the increased energy need would also be considered.
Mississippi Power provides electricity to 186,000 customers in 23 southeastern Mississippi counties.
Mississippi Power maintains natural gas is an extremely volatile commodity, and ratepayers will benefit in the long run from stable rates of electricity from coal. Customers will only feel a 4 or 6 percent increase, Mississippi Power has said.
Opponents, including the Sierra Club, say rate increases would be significantly higher and the plant would be environmentally harmful.
Gov. Haley Barbour said in a Nov. 10 press conference call made from Iraq that the proposed plant is critically important to Mississippi. “It is the cheapest, most reliable way for Mississippi Power to increase its baseload. You cannot run your baseload electric generation with such a volatile fuel (natural gas) in terms of price. The lignite in Kemper County is a Mississippi natural resource and it is very, very cheap compared to other sources. It’s the right thing as far as cost to the customer,” Barbour said.
Because of the federal money put into the project, Barbour said, the rates customers would pay would be lower than they would be otherwise.
“We’re getting a tremendous amount of federal assistance, which means that the cost is being reduced because it is the first commercial-scale, carbon-capture sequestration coal-fired power plant in the United States,” Barbour said.
The federal government will provide $700 million in support to the Kemper project, which represents approximately 20 percent of the total cost, according to a brief from the PSC hearings on energy need. The brief states that an unspecified, significant time delay would jeopardize the availability of government incentives.
Due to the state Legislature’s Baseload Act passed in the spring 2008, the PSC can vote to allow Mississippi Power to pay for the $2.2-billion plant through extra charges to ratepayers, even if the facility should be abandoned and not completed. Previous law requires a facility to generate power before customers can be charged a rate increase via PSC approval.
The proposed Kemper project would capture up to 65 percent of carbon dioxide released, which would then be sold to a company, thus avoiding federal carbon taxes, Mississippi Power has said. The U.S. Department of Energy has certified the proposed facility as a “clean” project, and the company feels confident it will find a buyer for the emissions, a Mississippi Power spokesperson said in a previous interview.
Companies, such as Mississippi-based Denbury Resources Inc., can inject carbon dioxide or other gases into an oil field under high pressure, which will push oil up into a pipe and onto the surface. This process is called tertiary oil recovery.
Denbury currently pumps its carbon dioxide from underground resources but is pursuing the use of man-made sources of carbon dioxide — such as that obtained from power plants — to use in its tertiary operations.
Opponents argue that if no carbon dioxide buyer is found, ratepayers will absorb the cost of disposing of the carbon dioxide.
Mississippi Power states on its web site that the new integrated gasification combined cycle (IGCC) technology does not directly burn coal. The gasification process instead first breaks the coal down into chemical components, and gases that result from that chemical breakdown that can be used to fuel power plants.
Mississippi Power’s parent company Southern Company, along with its partner, has developed a new technology called transport integrated gasification (TRIG), which uses low-rank coals, such as the lignite in Kemper County. Low-rank coals have less energy per pound but account for half of worldwide reserves.
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