Mississippi PSC: Kemper Facility Should Operate Using Only Natural Gas

The Mississippi Public Service Commission (MPSC) at an open meeting on June 21 unanimously passed a motion instructing its counsel to prepare an order pursuing potential solutions regarding the Kemper County Power Generation Facility.

In a press release, the MPSC said the “Kemper Facility should operate using only natural gas.” The commission said it wanted to remove risk from ratepayers for the lignite coal gasifier and related assets, and ensure no further rate increases were incurred by Mississippi Power Co. customers. (In fact, the commission strongly encouraged rate reductions, particularly for residential customers.)

Mississippi Power issued a statement on the MPSC decision. It said, “The PSC provided several guidelines to consider for the negotiations, including the possibility of the project only operating as a natural gas-fueled combined cycle plant. We expect the process for any negotiations and this new docket will be formally addressed as part of a proposed order the Commission will consider at their July 6 meeting. We look forward to reviewing the order.”

The Kemper County Energy Facility is designed as an integrated gasification combined cycle (IGCC) project to convert locally mined lignite to synthesis gas, using novel TRIG technology to capture up to 65% of its carbon emissions. One component of the Kemper project is a combined cycle gas turbine plant, which was designed and built to be fully integrated with the gasification portion. The integrated project is nearly complete and slated to begin service at the end of this month.

The project has been befuddled with problems, however. Original expectations were for a May 2014 in-service date, but the project has now fallen more than three years behind schedule. Costs have ballooned from original estimates of $2.4 billion (net of $245 million in grants awarded by the Department of Energy, and not including mine and CO2 pipeline costs) to a total cost now of more than $7.5 billion.

The facility began producing electricity on August 9, 2014, and has been operating on natural gas from a local pipeline much of the time since. In February 2017, Mississippi Power acknowledged that the facility wasn’t economically viable as an integrated gasification unit in the face of long-term natural gas prices.

It appears the MPSC agrees. It said any settlement should include modification or amendment of the certificate previously issued, allowing only for operation of a natural gas facility at the Kemper project location.

POWER requested comment from a Southern Co. spokesperson, but did not receive a response before this story was published.

Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)