Kemper County power plant on schedule
Tuesday, Jun. 07, 2011
The Associated Press
GULFPORT, Miss. — Construction of Mississippi Power Co.’s coal-gasification plant in Kemper County is on schedule and on budget, the company’s head says.
Last year, the Mississippi Public Service Commission approved the company’s proposal for the project and in December, ground was broken. The cost of the plant will be passed on to ratepayers in stages while the project is being built – a result of a law the Mississippi Legislature passed in 2008.
In its approval for the project, the PSC set a cap for the cost of the plant at $2.88 billion.
In a meeting Monday with The Sun Herald, chief executive Ed Day said the company aims to keep the cost below the cap. The goal is to have the plant operating in 2014.
“Internally, we really only talk about $2.4 billion,” Day said.
The company said it’s seen an increase in usage from industrial customers, as well as other users. Day said that might be due to some recovery from the recession.
In 2010, a colder than normal winter and a hotter summer also drove up usage, company officials said. The company’s all time summer peak usage record was set about 3 p.m. on Aug. 2, 2010, with 2.7 million kilowatts.
The peak usage day this spring was set Thursday with about 2.4 million kilowatts.
The plant has been fought by the Mississippi Sierra Club, which is upset with environmental aspects of the project, along with the company’s plans to pass construction costs on to ratepayers. The Sierra Club contends the plant is dirty, expensive and unnecessary and that natural gas would have been a better fuel source.
The company contends natural gas prices are much more unpredictable than lignite coal, which the plant will use. The company says lignite is abundant in Mississippi and represents the best option.
Day said there’s a chance large fuel cost savings by using the coal could result if natural gas prices rise substantially over the next few years. About 50 percent of a ratepayer’s bill goes toward fuel costs.
“We know what (price) the coal will be mined at, within a small tight range, it’s just now a matter of what will gas do, and how high will it go,” Day said. “There’s got to be a natural fuel savings to the customer over long periods of time. That’s kind of what wins the day.”
The increase on a customer’s power bill could range from as much as 33 percent, according to the company, to as high as 48 percent, according to the Sierra Club.
Mississippi Power has said those increases could be phased in over 10 years.
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