Reuters – MPSC adviser urges cost cap if State allows Kemper power plant

Mississippi Power Co wants to build a 582-megawatt integrated gasification combined-cycle (IGCC) plant that will burn Mississippi lignite to expand its baseload generation as it contemplates shutting other aging coal plants.

Craig Roach of Boston Pacific Co, hired by the Mississippi Public Service Commission to evaluate the economics of the utility’s coal proposal against purchases from natural gas-fired power plants, said the Kemper IGCC project could be the best option in the long term.

Over a 40-year period, the Kemper County plant would likely be more economical for rate payers than purchased power contracts, but only if the Kemper County IGCC plant can be built without serious cost overruns, Roach told regulators.

Over a 10- to 20-year time frame, purchased power contracts provide could lower costs for rate payers, depending on the direction of gas prices, Roach said.

Reuters
2/3/10