Counting the Kemper costs: Mississippi’s travails with “clean coal”

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Wednesday, April 29th, 2015

Kemper_County_Coal_Gasification_Plant

By XTUV0010 (own work) via Wikimedia Commons

It’s a boondoggle of football stadium proportions – or sports cars, fighter jets, or just about any other absurdly expensive item you can imagine.

Mississippi’s Kemper Project is a first-of-its-kind integrated-gasification power plant designed to fulfill the growing need for electricity in the Magnolia State. Extolled as a great technological leap forward, it functions by converting lignite coal to natural gas-like synthesis gas, which fire its 582-megawatt turbines. Its appeal lies in its Holy Grail-like prospects of burning “clean coal,” because it captures and stores carbon much better than traditional coal-fired plants.

Reality, however, hasn’t delivered on the advertising’s glowing promises. Since its inception, news about the Kemper Project has mostly been a one note tune: costs have increased again. And again. And again. And again.

Mississippi Watchdog reporter Steve Wilson, who has been following the Kemper Project story for more than a year now, ticks off a laundry list of disconcerting facts along these lines. The clean coal plant has increased in cost by more than 70 percent over its initial projections and is two years behind schedule – due in part to delays and government regulations. It is held up as an example for future coal power plants, but the dirty little secret is that currently it does not work – and might never work. Unfortunately, it is the rate payers for Mississippi Power, the utility that built the plant, who have been saddled with 18 percent rate increases to pay for the plant’s $6.175 billion price tag. That makes it one of the most expensive power plants per kilowatt in the country.

As a reference point, the facility’s original cost when construction was approved in 2010 was $2.4 billion. For a price tag comparable to the Kemper Project’s current cost of more than $6 billion, Mississippi could have built a pair of nuclear reactors – a proven, mature technology – capable of generating four times as much power.shutterstock_158535314

“This story is a classic example of the dangers of a ‘public-private partnership,’” said Wilson. It has its origin in the U.S. Department of Energy awarding Mississippi Power a sizable grant to build a first of its kind plant. The technology, however, hadn’t been proven to work and was bound to be expensive, so Mississippi Power decided to use a system of rate increases on its customers to pay for the rest. Just how much of the costs ratepayers will absorb is still a matter of controversy. Currently a cap on Kemper Project power plant construction costs is still in effect, meaning theoretically Mississippi Power can’t raise rates and cite the $6.2 billion plant as the reason. Mississippi Power, however, is arguing that under state law, the Mississippi Public Service Commission and the Legislature can authorize increases that exceed the cap of $2.4 billion.

“The worst thing for the company’s ratepayers is that it’s not like they can go elsewhere for their electricity, so they’ve been hit with the bill for a plant that is way over budget and not even proven to work,” said Wilson.

Based on Watchdog’s series of stories on the Kemper Project, it is apparent that so-called clean coal doesn’t work and that the Department of Energy’s investments in the technology have so far been wasteful and misguided. Trying to convert coal into natural gas (which is basically what the gasifier does) is hard to justify in terms of cost when you can already get natural gas out of the ground inexpensively. “Plus, the product of the gasifier (synthesis gas) actually has a lower energy content than natural gas, so you’re expending a great deal of time, effort and ratepayers’ money on a technological dead-end,” said Wilson.

The fact that there are only a handful of similar plants – most much smaller than Kemper’s – is evidence itself that the process isn’t economically appealing and certainly doesn’t reflect the will of any sensible ratepayer.

“If these coal gasification plants worked so well and natural gas was as expensive as Mississippi Power claimed it’d be when the plant came on line, there would be more of them,” Wilson said. “But as it is, turning coal into basically inferior natural gas is an energy-intensive science project.”

Few stories by the local media probe beyond surface-level coverage of the many cost increases to the Kemper Project, which has risen more than half a billion dollars in the past nine months alone. Wilson’s coverage has been instrumental for citizens seeking to understand the issue by painting a more complete picture.

“They don’t explain the why and that’s where Watchdog.org fills the void,” he said. Anyone who pays a power bill in South Mississippi is well aware of the impending rate hikes. They surely aren’t happy about it, and ought to be informed about the reasons for the hikes.

Electricity bills, however, are only the beginning of the story. “Eventually, more local businesses will have to pass these increased costs onto consumers served by Mississippi Power,” Wilson said. “Local governments will be affected as well, dealing with an added cost beyond their control.”

If and when they do, Mississippi Watchdog will be there to make sure the story is told.

One Response to “Counting the Kemper costs: Mississippi’s travails with “clean coal””

  1. John Chinn says:

    The only surprise here is we do not take all involved in this legalized graft and jail them at hard labor for the remainder of their lives.

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