PSC considers proposed Mississippi Power Co. plant

Published 12:57 am Sunday, October 4, 2009

Mississippi utility regulators will hold public hearings this week to determine whether the state needs more capacity to generate electricity.

The hearings are one step in a lengthy process as Mississippi Power Co. seeks Public Service Commission approval to build a $2.2 billion coal-powered plant in Kemper County.

The company says the plant — in a wooded area north of Meridian and near the Alabama state line — would use a new technology that converts a soft coal called lignite into a gas that would fuel turbines to create electricity. Company officials say the lignite would be locally mined and would be cheaper than natural gas.

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“Our customer loads are growing, and we need this plant to provide reliable service and economic benefit to our customers,” Mississippi Power spokeswoman Cindy Duvall said this past week.

The Sierra Club, an environmental group, is among the opponents of the proposed plant.

“It’s dirty, it’s expensive and it’s unnecessary,” said Louie Miller, the Sierra Club’s executive director in Mississippi.

Mississippi Power, a subsidiary of Atlanta-based Southern Co., hopes to start building the plant in 2010 and have it operating by 2014.

Duvall said Mississippi Power has a current generating capacity of 3,000 megawatts in the state. She said the 582-megwatt facility in Kemper County would be “a medium-sized power plant.”

The PSC is holding hearings Monday through Thursday at the Woolfolk state office building in downtown Jackson.

The three commissioners are elected from the northern, central and southern parts of the state. They have set a tentative deadline of Nov. 10 to decide whether there’s a need for additional power generation in the state. If commissioners approve, they would conduct a second set of hearings in early February to gather information about the proposed plant site.

Mississippi Power is the first company trying to use a 2008 state law that allows utility companies to seek rate increases to help pay for construction of facilities before they’re open. Under the old law, a company had to wait until a facility was generating power to ask the PSC to approve a rate increase.

Mississippi Power president Anthony Topazi said last week that customers might see about a 16 percent rate increase because of the plant.

PSC Chairman Lynn Posey said commissioners this week will listen to panel discussions that will include supporters, opponents and neutral analysts.

“I think most folks are just waiting to fully understand it, exactly how it will impact them,” Posey said.

Commissioner Leonard Bentz is elected from the southern district, where customers would be most affected by Mississippi Power Co.’s financial decisions. Mississippi Power says it serves about 200,000 customers in 23 counties, from Meridian down to the Gulf Coast.

“I’m open-minded. I want to hear what everybody has to say,” Bentz said.

A Mississippi Power video, posted to the company’s Web site, says up to 1,000 jobs will be created during construction of the plant, and about 260 permanent jobs will be created at the plant and in the lignite mining operations.

The company has received a $270 million grant from the U.S. Department of Energy for the Kemper County plant. It also has received $133 million in investment tax credits.

The Kemper County plant would use a new technology known as IGCC, or Integrated Gasification Combined Cycle. Southern Co. announced in September that it would build the first IGCC plant in China, with operation expected to begin in 2011.

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