“First fire” of Kemper gasifiers a success; major step toward expected 2016...

“First fire” of Kemper gasifiers a success; major step toward expected 2016 completion

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Kemper aerial
An aerial photo of the Kemper County energy facility taken in Feb. 2015.

Mississippi Power’s Kemper County energy facility reached one of its most significant milestones to date when it successfully performed the “first fire” and associated activities of the project’s gasifiers last week. The gasifiers – the centerpiece of the project – are designed to convert lignite coal to synthesis gas, or syngas, for use in power generation.

The burners for both of the project’s gasifiers functioned as predicted in their first test, completing another important step toward finishing the project, which is expected in the first half of 2016.

“The Kemper County energy facility will be capable of powering thousands of homes and businesses with electricity derived from an underutilized and affordable Mississippi resource,” said Mississippi Power President and CEO Ed Holland. “The full operation of Kemper will represent more than the final milestone for this project. I believe it will be a transformational moment in the history of energy production.”

The gasifiers will transform lignite mined adjacent to the plant into syngas, which will fuel the plant’s turbines to generate clean, safe, reliable and affordable electricity.

“It’s like sticking a lighter out a moving car’s window, lighting it, and then keeping it lit,” said Joe Miller, Kemper startup manager, in describing the complexity of igniting the project’s startup pilot burners. “It is exciting to see more than 20 years of engineering and testing now taking shape at this first-of-its-kind facility.”

Another major milestone is expected to be achieved with the production of syngas when lignite is added to the gasifier later this year.

The facility’s innovative technology is designed to capture 65 percent of carbon dioxide emissions, which could be repurposed for use in enhanced oil recovery.

Approximately 2,500 workers continue to work on the plant. The entire project is slated to begin operation in 2016.

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. Mississippi Power has been recognized throughout the utility industry for excellence in storm restoration and recovery efforts and as a leader in safety. 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 the projected schedule for the completion of construction and start-up of the integrated coal gasification combined cycle project in Kemper County, Mississippi (the “Kemper IGCC”) and its expected benefits and future generating capacity.  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 Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: changes in tax and other laws and regulations to which Mississippi Power is subject as well as changes in application of existing laws and regulations; the ability to control costs and avoid cost overruns during the development and construction of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed, including changes in labor costs and productivity, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, contractor or supplier delay, non-performance under construction or other agreements, operational readiness, including specialized operator training and required site safety programs, unforeseen engineering or design problems, start-up activities (including major equipment failure and system integration), and/or operational performance (including additional costs to satisfy any operational parameters ultimately adopted by the Mississippi Public Service Commission (the “Mississippi PSC”)); the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards, 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 the Kemper IGCC, including actions relating to proposed securitization, Mississippi PSC approval of a rate recovery plan, including 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 2015, and satisfaction of requirements to utilize investment tax credits and grants; Mississippi PSC review of the prudence of Kemper IGCC costs; the ultimate outcome and impact of the February 2015 decision of the Mississippi Supreme Court and any further legal or regulatory proceedings regarding any settlement agreement between Mississippi Power and the Mississippi PSC, the March 2013 rate order regarding retail rate increases, 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.