Pressure from Obama’s Energy Czar for MS PSC and So. Company to Compromise for Cap and Trade
July 21, 2011 Leave a comment
U.S. Energy Secretary Wants Kemper Approval
by Amy McCullough
Published: May 7,2010
The Energy Daily reports today that U.S. Energy Secretary Steven Chu hopes the Mississippi Public Service Commission and Southern Company can strike a compromise on a proposed $2.4 billion clean coal plant to be built in Kemper County.
The Mississippi Commission voted April 29 to allow the plant to go forward if Mississippi Power Company (a division of Southern Company) agreed to cap costs at $2.4 billion. MPC had previously proposed a cost cap of $3.2 billion. The Commission also turned the company down on its request to put Construction Work in Progress (CWIP) in rate base – or charge customers for plant financing costs before and during plant construction.
“The (Southern) project is also a large-scale project but it’s now in jeopardy. I just hope that Southern Co. and the (Mississippi) commission come to a compromise agreement…” Chu said, according to The Energy Daily.
Chu spoke Thursday at the Obama administration’s Interagency Task Force on Carbon Capture and Storage (CCS) – a task force charged with overcoming barriers to CCS within 10 years, with a goal of bringing five to 10 commercial demonstration projects online by 2016.
MPC has said the Commission’s restrictions “seem to make it impossible” to move forward with the plant and that the denial of CWIP would not allow them to operate in a financially responsible manner.
The Kemper plant would be the first U.S. plant to demonstrate CCS on a commercial scale. Southern Company first pursued a similar project, the Orlando Gasification Project, in Florida. After the state cancelled the project, Southern then gained permission to transfer $270 million in U.S. Department of Energy funds to Mississippi to pursue a clean coal project with CCS here.
Kemper would gasify Mississippi lignite, a lower rank coal, and then burn the gas to produce electricity. The company also plans to sell the plant’s captured carbon for Enhance Oil Recovery projects. In EOR, gas can be injected into depleted oil fields at high pressure to increase the amount of petroleum that can be extracted.