Power rates could go up 33 per cent

Kemper County IGCC plant proposed by Mississippi Power, an integrated gasification combined cycle project, touts fuel savings and environmental compliance as the PSC weighs a 33% rate hike, lignite mining, and natural gas volatility.

Mississippi Power Company revealed a glimpse of how building a $2.8-billion Kemper County lignite coal power plant would affect power bills in the state, including the Coast.

After meeting with the state Public Service Commission for an entire week, answering questions about the mounds of data the company has compiled to make its case for building the plant, company officials said rates would increase about 33 percent over the next 10 years.

They also said that building or buying an alternate way to generate the additional power it will need in the coming years would have required the same size increase.

Company spokeswoman Cindy Duvall has said throughout the week that the Kemper County IGCC plant is very much the company’s first choice.

After four days of panel discussions between the PSC and Mississippi Power, the PSC is now listening to public comment.

The Coast Sierra Club is sending a bus to the public hearing and leaders of that group have said their biggest concerns relating to the Coast, with the low-emission coal plant proposal, are the rate hike and mining about 18 square miles of Kemper County, which is in the watershed area of the Pascagoula River basin.

Duvall said in a written statement that the rate increase would pay for the cost of generating new power and meeting more stringent environmental standards.

“However, with the Kemper project, rates will begin to stabilize” after 10 years, she said, “because of significant fuel savings.”

She said the company estimated those savings at $200 to $400 million a year. The alternate, a natural gas powered plant, she said would subject the company to the more volatile cost of natural gas.

“In just the last four months,” she said, “the price of natural gas has increased 131 percent.”

She said Mississippi Power told the PSC, “the Kemper County project, a coal generation plant using Mississippi lignite, provides the greatest value at the lowest risk for more than 40 years.”

Lignite is a soft coal that would be mined at a depth of about 80 feet in close proximity to the power plant in Kemper County.

The Legislature has cleared the way for Mississippi Power to increase rates before the plant is built in order to help pay for the construction. After the hearings, the PSC has until May 1 to make a decision.

The PSC ruled in the fall that Mississippi Power needs to generate more power by 2014.

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