Proposed Coal Plant Finds Opposition

Melissa Webster

by Adam Lynch
February 18, 2009

Opposition is mounting against a proposed 582-megawatt coal gasification plant in Kemper County that could increase Mississippi ratepayers’ utility bills by 15 percent.

Mississippi Power Company filed a Jan. 16 certificate of public convenience with the Mississippi Public Service Commission, asking for permission to begin proceedings that could eventually set aside 48,000 square acres of Kemper County land for lignite coal-mining, and construction of a lignite coal-burning plant using technology that currently does not exist.

“This plant will diversify our fuel sources and will produce energy at lower and more stable costs than any other fossil fuel option,” said Anthony Topazi, Mississippi Power president and chief executive officer in a statement.

“By creating an additional fuel alternative—Mississippi lignite—this project creates significant energy cost reductions for our customers, such that over its life, the energy savings more than offset the cost of building the plant.”

The Mississippi Sierra Club has joined the AARP and Kemper County residents in opposing the $2.2 billion proposal.

Mississippi Power says the proposed integrated gasification combined cycle (IGCC) plant, located near Liberty, will sequester 50 percent of its carbon emissions, making the plant eligible for federal funding, but Sierra Club organizer Louie Miller said the technology currently only exists in “some Madison Avenue advertising guy’s imagination.”

“They’re promoting this myth that coal is clean, but the bottom line is there is no such thing as clean coal, period,” Miller said. “The thing with lignite is that it’s wet. It’s a crappy, low-grade form of coal, with the same BTU value as wet firewood. It’s not a desirable fuel source, but what they’re banking on is the transportation savings because they’ll build a burning facility right next to the mine. There is no IGCC facility in this country, and this thing is going to put 15 billion pounds of CO2 a year into the atmosphere, not including asthma-related particulates.”

The company claims to be “in preliminary discussions” with a firm that has expressed interest in purchasing the CO2 produced by the plant to inject into near depleted oil fields pushing more oil high enough for extraction. But oil companies, according to business journals, are taking a hit this year with falling gas prices and likely are not seeking new investments into technology such as carbon sequestration.

Kemper County resident Barbara Correro, whose property will be directly affected by the proposed plant, is furious at the prospect.

“Mississippi Power’s Sept. 22, 2008, DOE (Department of Energy) federal register document shows they’re going to dam up my Chickasaw Way Creek. They’re going to pump 6 million gallons of water out of an aquifer every day to wash the coal, which will drop our well water,” Correro said. “They’re going to destroy this whole area. They’ll pollute the whole area and then drive me off to the city. I’m fighting this. I’m fighting it hard.”

Mississippi Power claims on the application that the plant will create approximately 1,000 jobs at the peak of the construction phase and approximately 260 to 280 permanent jobs in the power and mine facilities, as well as increased state and local tax revenues, but AARP legislative lobbyist Walter Howell said senior citizens are worried about the new financial burden the plant will put on customers with fixed incomes.

The Mississippi Legislature passed a bill during the 2008 legislative session that allowed Mississippi Power companies to raise customers’ rates to finance the construction of new energy plants, including a nuclear reactor near the coast and two additional coal plants. The bill altered state law in that it raised the possibility of charging customers’ before the new construction even begins.

Mississippi Power estimates customers’ annual retail rates to increase 4 percent in 2011, 5 percent in 2012, and another 6 percent in 2013, with the possibility of a 4 percent decrease in 2014 and further reductions in subsequent years.

A flurry of fighting followed HB 2793 all the way from its committee passage to the governor’s desk, and Howell said the law could sting customers if the Mississippi Public Service Commission OKs the pre-pay clause.

“We feel that the responsibility for financing the construction needs to be on the company and its shareholders, and that customers should not have to serve as the bankers for the company,” Howell said, adding that he expected customers’ electric bills to jump $10 or $20 a month.

In addition to forcing customers to finance a new power plant, HB 2793 also makes no provisions for reimbursement should the plant never reach completion. And judging by recent events, plans for similar plants have a habit of collapsing.

The New York Power Authority announced it was halting plans for a 680-megawatt IGCC plant clean-coal facility in western New York last July. NYPA officials said the electricity produced by the plant would be too expensive specifically because of the same IGCC technology Mississippi Power is proposing to use in Kemper County.

Southern Company, the parent company for Mississippi Power, announced in 2007 that it was canceling construction of another IGCC plant in Florida. Southern Company said in a 2007 press release that the decision was driven by continuing uncertainty surrounding potential state regulations relating to greenhouse gas emissions.

One continuing uncertainty is whether or not the new president’s administration will recognize carbon emissions as a pollutant. President Barack Obama told voters during his 2008 campaign that he believed increased carbon emissions were raising the Earth’s temperature. The Bush administration refused to acknowledge the issue and ordered the Environmental Protection Agency to ignore CO2 as a pollutant, but Miller said times are changing.

“The last thing EPA Administrator Steven Johnson did before the door hit him on the ass was to issue a memo, as part of a review for a proposed coal-fired power-plant expansion in Utah, which kicked carbon dioxide from the list of pollutants the government had to regulate under the Clean Air Act. But the courts are already saying that they’re not accepting his version of reality,” Miller said.

Mississippi Public Service Commissioners Lynn Posey and Brandon Presley refused to offer their approval or disapproval of Mississippi Power’s request, which they will hear in April. Presley said he was nervous about the pre-pay clause of the application, however.

“That part of it just gives me heartburn,” Presley said. “That’s something that we’ve got to closely look at because it deserves scrutiny. It deserves proper attention because they’re trying to charge ratepayers for something that they ain’t got, yet. It would be like you being asked to pay for something up front that you don’t have. It worries people, but I’m not making any predeterminations yet.

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