Coal Power for Mississippi, But $2.9-Billion Cost Cap Set
In an otherwise troubled time for new coal-fired projects, the Mississippi Public Service Commission has approved Gulfport, Miss.-based Mississippi Power�s plans to build a new 582-MW integrated gasification/combined-cycle plant in Kemper County�but with a $2.88-billion cost cap.
Mississippi Power plans to complete the Kemper project as soon as 2014, said utility spokeswoman Cindy Duvall. The prime construction contractor will be selected soon, with project construction to be managed by Southern Co. Engineering and Construction Services. A sister company, Southern Co. Services, will handle primary design, Duvall says. Kemper�s �gasification island� is being designed by KBR, Houston.
The Kemper project, which would use locally mined lignite, appeared to die in late April, when the Mississippi Public Service Commission said it would grant a certificate of public convenience and necessity only if Mississippi Power agreed to cap the project's recoverable costs at $2.4 billion.
The Southern Co. subsidiary, which initially had proposed a $3.2-billion cost cap, said that a $2.4-billion cap would make the project �impossible � to finance� and impose too much risk on the utility and its shareholders.
The PSC, though, agreed in late May to a $2.88-billion cap proposed by Mississippi Power. The utility said it will proceed with the project.
Kemper remains controversial, however. Commission Chairman Brandon Presley opposed the approval as �terrible� regulation, and the Sierra Club�s state chapter will likely challenge the project.
Several coal projects are under construction in the U.S., including Duke Energy�s 800-MW Cliffside, N.C., project and its 632-MW Edwardsport, Ind., project as well as LS Power�s 900-MW Sandy Creek, Texas, project. P
lanned projects face regulatory roadblocks, legal challenges and other problems. The number of project cancellations and suspensions continues to grow.
In late May, for example, the Michigan Dept. of Natural Resources and Environment denied an air-permit application by Wolverine Power Cooperative for a proposed 600-MW coal plant in Rogers City. A week later, Consumers Energy put on hold its plan to build an 830-MW coal plant in Bay City, Mich., citing slumping demand for power.
