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Rate increase to come with Miss. plant work

Associated Press Modified: January 27, 2011 at 8:19 am •  Published: January 27, 2011
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JACKSON, Miss. (AP) — Mississippi Power Co. has told state utility regulators that it expects customers' bills to rise 3.5 percent over five years as it works to bring Plant Daniel in Jackson County up to new environmental rules.

The Mississippi Press reports that Mississippi Power officials outlined the $625 million project for members of the state Public Service Commission at a hearing this week in Jackson.

Mississippi Power and Gulf Power, both Southern Co. subsidiaries, jointly own the plant.

Project manager David Schmidt said each company will spend about $312 million.

Mississippi Power spokesman Verdell Hawkins said the company hopes to get PSC approval to proceed by Feb. 28.

Hawkins said work to bring Plant Daniel into compliance with the Clean Air Act should be completed by 2015.

"We've been trying to hold off on these expenditures as long as we could so they wouldn't be a burden to the customers of Mississippi Power Company," said Mississippi Power attorney Ben Stone. "But we can't hold off any longer."

The Plant Daniel project is one of many nationwide and several for Mississippi Power. The company broke ground last month on a $2.4 billion plant in Kemper County that will convert lignite into electricity.

Plant Daniel is north of Pascagoula on Mississippi Highway 63.

Named for Mississippi Power's fourth president Victor J. Daniel Jr., the plant has four generation units, two fed by coal and two fed by natural gas. The coal units supply about 20 percent of the company's 190,000 customers.

The work would be on the two coal-powered units. Mississippi Power officials said the scrubber system would remove up to 95 percent of sulfur dioxide emissions from flue gas by mixing it with water and limestone.

Stone said that having the ability to switch fuel sources gives Mississippi Power the ability to rely more heavily on whatever power source is cheaper at any given time.

The Sierra Club has contended that converting the entire facility to natural gas would be friendlier to the environment and cheaper for customers.

The Sierra Club said the scrubber system would result in a byproduct, commercial-grade calcium sulfate gypsum that will be sold to be used in wallboard, cement and as an additive for soil that increases root mass and reduces soil erosion.

Mississippi Power, headquartered in Gulfport, provides retail and wholesale electric service to customers in an area covering 23 counties from the Gulf Coast to Meridian.

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Information from: The Mississippi Press, http://www.gulflive.com