Mississippi Power receives additional federal support for Kemper County IGCC Project

Southern Company - 05.10.2010

Mississippi Power’s proposed Kemper County Integrated Gasification Combined Cycle (IGCC) plant will receive an additional $279 million in investment tax credits from the Internal Revenue Service (IRS). Mississippi Power qualified for the additional credits when it committed to install equipment that will capture 65 percent of the carbon dioxide emissions at the plant.

In 2009, the company applied for additional federal support during Round Two of the Department of Energy’s Investment Tax Credits program which was approved by Congress upon passage of the National Energy Policy Act of 2005.

In addition to the $279 million, Mississippi Power’s Kemper IGCC was awarded $133 million in IRS-approved investment tax credits in 2006. The project was also granted $270 million in Department of Energy funds through the Clean Coal Power Initiative in 2007. The sum total is $682 million in federal support for Kemper County IGCC.

At an estimated cost of $2.4 billion, Mississippi Power hopes to build a 582-megawatt, state-of-the-art electric power plant in Kemper County, Mississippi, using IGCC technology.

Over the past two decades, Mississippi Power’s parent company, Southern Company, along with the Department of Energy, has been developing cleaner, less expensive, more reliable methods for power production from coal. A result of this research is gasification technologies, developed at the Power Systems Development Facility (PSDF) near Wilsonville, Alabama.

Electricity generated from IGCC has fewer emissions than existing pulverized coal power plants.

Simply put, IGCC converts Mississippi lignite to gas. The process sends lignite through a device called a gasifier where, by being subjected to high temperatures and high pressure, the lignite undergoes a chemical reaction that creates a synthesis gas. The cleaned gas is then used to generate power by firing it in a gas turbine.

Rather than burning lignite directly to make electricity, gasification first breaks lignite down into chemical components. Gases that result from this chemical breakdown can be used to fuel power plants using integrated gasification combined cycle (IGCC) technology.

Southern Company, in conjunction with our partner KBR, has further developed the gasification process to work even more efficiently for low-rank coals, such as the lignite that is abundantly available in Kemper County, Mississippi. Low-rank coals have less energy per pound but account for half of worldwide reserves.

Mississippi Power, headquartered in Gulfport, MS, provides retail and wholesale electric service to approximately 200,000 customers in 23 counties from the Gulf Coast to Meridian. The company owns or has significant ownership interests in six generating facilities with net dependable generating capacity of 3,166 megawatts. Electricity is sent across 8,371 miles of transmission and distribution lines to retail customers principally in Gulfport, Biloxi, Hattiesburg, Meridian, Pascagoula, Columbia, Laurel, Waveland, Lucedale and Picayune.

Large wholesale customers include six electric cooperatives -- Coast EPA, Singing River EPA, Southern Pine EPA, Dixie EPA, Pearl River EPA and East Mississippi EPA -- the City of Collins and South Mississippi Electric Power Association. Large retail customers include the following: the region’s United States military installations -- Keesler Air Force Base and Naval Construction Battalion Center (Seabee Base); the University of Southern Mississippi; NASA Stennis Space Center; oil and gas infrastructure, including a refinery; multiple foundries and shipbuilders; the Mississippi National Guard’s Camp Shelby Joint Forces Training Center near Hattiesburg and the Mississippi Air National Guard in Meridian.

Mississippi Power, a wholly owned subsidiary of Atlanta-based Southern Company (NYSE: SO), employs 1,300 Mississippi residents. In 2008, Mississippi Power paid $115 million in federal, state and local taxes. Southern Company stock is held by nearly 3,000 Mississippi residents.


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