Mississippi PSC recognizes part of Kemper IGCC that’s already operating

The Mississippi Public Service Commission (PSC) on Dec. 3 approved in a 3-to-0 vote, an agreement that will lower bills and provide an additional credit to customers of Southern (NYSE:SO) Mississippi Power in connection with a new coal gasification power plant.

The decision comes after an agreement reached last month between Mississippi Power and the Public Utilities Staff regarding permanent rates associated with parts of the 582-MW Kemper County integrated gasification combined cycle (IGCC) project that are currently in operation and have been serving Mississippi Power customers for more than a year.

The vote by the PSC finalized that agreement, the utility said.

The basis of the PSC order is Kemper’s combined cycle portion of the plant, which has been in service since August of 2014, providing electricity to while fueled with natural gas.

In its first year of operation, the combined cycle unit has generated more than 3.5 billion kilowatt hours of electricity, enough to power the needs of approximately 250,000 homes for a year, the company said.

As part of the agreement: Kemper rates will be reduced for residential customers by approximately $4.70 below the current interim rate increase for a residential customer using 1,000 kWh a month. This will be applied to bills beginning with the first billing cycle in January.

Mississippi Power will credit back to customers the difference between the interim rates collected since August and the permanent rates in the agreement. This will result in an approximate average $22 one-time credit to residential customers’ bills within 90 days.

The company also has filed a request to further reduce customers’ bills as part of its annual fuel filing. The company has asked for an approximate $13.70 reduction for a residential customer using 1,000 kWh a month.

“We want to thank the PSC and the Public Utilities Staff for their hard work in coming to an agreement with Mississippi Power on the in-service Kemper assets, which have been supplying customers with electricity for more than a year,” Mississippi Power CEO Ed Holland said. “This ensures we can continue the progress we have made to bring the Kemper facility fully online. With this decision, Mississippi Power can proceed with some certainty and stability while providing our customers with safe, clean and reliable electricity.”

Mississippi Power said Oct. 27 that its Kemper County coal gasification power plant has reached its most significant milestone to date with the testing of one of the project’s gasification units. Once fully operational the plant will generate electricity through gasified lignite coal that’s mined at an adjacent North American Coal operation.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.