Gulfport, Miss. – In order to most economically comply with new federal environmental standards and meet obligations under a settlement with the Sierra Club, Mississippi Power is planning to repower, convert to natural gas, or retire several units at plants Watson, Sweatt and Greene County.
Mississippi Power will no longer use coal at Plant Watson, converting its two remaining coal-fired units to natural gas no later than April 16, 2015. The plant already has three units that operate on natural gas.
At Plant Sweatt, the company commits to retire two of the existing natural gas units, repower with more advanced technology or convert to an alternative non fossil-fuel source, no later than Dec. 31, 2018.
And at Plant Greene County, Mississippi Power will cease coal operations and convert two units to natural gas no later than April 16, 2016.
“With the repowering, natural gas conversion or retirement of certain units, Mississippi Power’s energy mix is expected to be 60 percent powered by natural gas in 2020,” said Ed Holland, president and CEO of Mississippi Power. “This further illustrates the importance of the Kemper County energy facility, which will use locally mined, low-cost lignite, in maintaining a diverse fuel mix for our customers.”
Also as a part of the settlement agreement, the Sierra Club agrees to dismiss and withdraw all pending legal and regulatory challenges against the Kemper project and Plant Daniel and refrain from formally intervening in all existing and anticipated regulatory proceedings for these two plants for a period of three years, in return for certain provisions from the company which include the changes slated for plants Watson, Sweatt and Greene County.
“Mississippi Power has been working through resource planning options to comply with standards set under federal environmental mandates,” continued Holland. “Our first priority has always been ensuring plans are in the best interest of our customers and the environment, which also means that the decisions we make must ensure we are providing clean, safe, reliable and affordable energy for our customers. We believe we have developed a solution that supports all of the above.”
Other highlights of the settlement include establishing and funding a $15 million grant for an energy efficiency and renewable energy program with the Mississippi Gulf Coast Community Foundation; complying with standards for a 100-year rainfall event when building future retention ponds associated with the Kemper County energy facility; and contributing to a conservation fund for the habitat of the Mississippi gopher frog.
“Our track record of environmental compliance and stewardship in the communities where we live and work is proven,” Holland said. “And, for decades we have provided solutions for our customers to save money and energy. This agreement builds on those commitments.”
Also as part of the settlement, Mississippi Power agreed not to oppose certain aspects of the renewable net metering policy development currently being contemplated by the Mississippi Public Service Commission.
Located near DeKalb, Miss., the 582 MW Kemper County energy facility is expected to generate made-in-Mississippi electricity for Mississippi Power customers in 2015.
Plant Daniel is a 2,077 MW, four unit fossil fuel power plant located in Escatawpa, Miss. A $660 million scrubber project is currently under way to ensure compliance with the new federal environmental standards by April 2016. Once the upgrades are complete, 95 percent of the plant’s sulfur dioxide emissions are expected to be removed to create even cleaner air for South Mississippi.
Mississippi Power, a subsidiary of Southern Company (NYSE: SO), produces safe, reliable and environmentally responsible energy for more than 186,000 customers in 23 southeast Mississippi counties. Recognized throughout the utility industry for excellence in storm restoration and recovery efforts, Mississippi Power is the 2013 winner of the Edison Electric Institute’s Emergency Assistance Award. As a leader in safety, Mississippi Power ranked first in the 2013 Southeastern Electric Exchange (SEE) Safety Performance Reports. Visit our websites at mississippipower.com and mississippipowernews.com, like us on Facebook, follow us on Twitter, LinkedIn, Google+ and YouTube.
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning environmental regulations and related compliance plans and estimated expenditures, the projected cost and schedule for the completion of construction and start-up of the Kemper IGCC, impacts to customers, the cost and completion of ongoing construction projects and sources of fuel. Mississippi Power cautions that there are certain factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Mississippi Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Mississippi Power’s Form 10-K for the fiscal year ended December 31, 2013, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; ability to control costs and avoid cost overruns during the development and construction of facilities, which includes the development and construction of generating facilities with designs that have not been finalized or previously constructed, including those risks identified above that have caused and may continue to cause cost increases and/or extensions of the in-service date; ability to construct facilities in accordance with the requirements of permits and licenses to satisfy any operational and environmental performance standards, including any Mississippi Public Service Commission (PSC) requirements and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; advances in technology; actions related to cost recovery for Mississippi Power’s Kemper County integrated coal gasification combined cycle facility (IGCC), including actions relating to proposed securitization, Mississippi PSC approval of Mississippi Power’s proposed rate recovery plan, as ultimately amended, which currently includes the ability to complete the proposed sale of an interest in the Kemper IGCC to South Mississippi Electric Power Association, the ability to utilize bonus depreciation, which currently requires that assets be placed in service in 2014, and satisfaction of requirements to utilize investment tax credits and grants; Mississippi PSC review of the prudence of Kemper IGCC costs; the outcome of any legal or regulatory proceedings regarding the Mississippi PSC’s issuance of the Certificate of Public Convenience and Necessity for the Kemper IGCC, the settlement agreement between Mississippi Power and the Mississippi PSC, the March 2013 rate order, or the State of Mississippi legislation designed to enhance the Mississippi PSC’s authority to facilitate development and construction of baseload generation in the State of Mississippi; and the ability of counterparties of Mississippi Power to make payments as and when due and to perform as required. Mississippi Power expressly disclaims any obligation to update any forward-looking information.