Saturday, June 12, 2010

Memorable Memorial Day for

Kemper County IGCC Project

Mississippi Power announces that it will move forward to construct a 582MW IGCC power plant as Public Service Commission relaxes financial restrictions on the project.

May 28, 2010

Mississippi Power, a wholly owned subsidiary of Southern Company, said that it will formally accept the terms of the revised order of the state regulators allowing for the construction of an advanced design IGCC power plant, which is expected to come online by 2014.

The utility said that the proposed plant would use Mississippi lignite. This locally available and relatively low-cost energy source will be added to its existing fuel mix of natural gas and coal, and will allow the company to mitigate the volatility and growing costs associated with other fuels.

Mississippi Power had asked the Mississippi Public Service Commission to reconsider conditions it had previously placed on the utility's plan to build the 582MW plant, including a recoverable cost cap of $2.4 billion.

The utility had claimed that the $2.4 billion price cap along with other conditions "created unacceptable risks to the company, our customers, our lenders and our investors."

After rehearing the case, the commission voted 2-1 to raise a price cap it placed by nearly $500 million to $2.88 billion and to allow the utility to begin charging customers for some plant costs starting in 2012, at least 2 years before it is expected to begin producing electricity.

Commission Chairman Brandon Presley, who opposed the plant in April as too risky for ratepayers, voted against the revised order. In a dissenting opinion, Presley criticized the action by the other two commissioners in acquiescing to the utility's objections.

Other project critics -- owners of merchant power plants in the region and at least one environmental organization -- said the utility was counting on high natural gas prices to justify the plant's economics at a time when the US natural gas supply is climbing with new production that should keep costs in check.

The Kemper County plant will employ an advanced air-blown circulating fluidized bed "transport" gasifier (the "TRIG" system) developed by Southern Company and KBR, in conjunction with the US Department of Energy. It will be the first commercial-scale application of the technology in the US.

An earlier attempt by Southern, KBR and the DOE to develop a commercial-scale demonstration plant in Orlando, Florida had failed to materialize.

In September 2009, KBR announced that it had been awarded a license and services contract in China with Beijing Guoneng Yinghui Clean Energy Engineering Co., Ltd that is expected to result in the first commercial scale installation of the TRIG system.

No comments: