Mississippi Power settles with Sierra Club over Kemper plant

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After four long years of Sierra Club legal challenges to Mississippi Power's Kemper coal plant, Mississippi Power has reached a settlement with the Sierra Club -- which includes conversions or closures of some of its generating units. The agreement brings $15 million in energy efficiency and clean energy investments to the state, sets the stage for homeowners to install solar power, and requires power plants in Gulfport, Mississippi and Greene County, Alabama to stop burning coal over the next 20 months.

Kemper construction. Credit: Wikimedia Commons/XTUV0010

The utility is planning to repower, convert to natural gas, or retire several units at its Watson, Sweatt and Greene County plants as the most economical way to comply with federal environmental standards and other obligations within the settlement.

At Plant Watson, Mississippi Power will no longer use coal, 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 Greene County, Mississippi Power will cease coal operations and convert two units to natural gas no later than April 16, 2016. At Plant Sweatt, the company will retire two of the existing natural gas units and repower with more advanced technology, or convert to an alternative non fossil-fuel source no later than Dec. 31, 2018.

"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."

As part of the settlement agreement, the Sierra Club has agreed 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.

The 582 MW Kemper County energy facility is expected to generate in-state electricity for Mississippi Power customers in 2015. At the 2,077 MW, four unit fossil-fueled Plant Daniel, a $660 million scrubber project is underway 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.

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, and complying with standards for a 100-year rainfall event when building future retention ponds associated with the Kemper County energy facility.

Mississippi Power has also agreed not to oppose certain aspects of the renewable net metering policy development currently being contemplated by the Mississippi Public Service Commission.

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