Wednesday, September 18, 2013

Bloomberg: Kemper boondoggle or future of coal?

Bloomberg discovered Kemper. The story begs the question: Is Kemper going to be a boondoggle for Southern Power or is it the new clean future of coal? Bloomberg reports:

Coal’s future is being built in rural Mississippi, and so far this is what it looks like: a $1 billion cost overrun, a stew of legal battles, a revolt by ratepayers and a credit downgrade for the local utility.

With all those challenges, Southern Co. (SO)’s $4.7 billion project in Kemper County may still be coal’s best hope to survive President Barack Obama’s limits on greenhouse-gas emissions...

On the basis on information that we see out in the market today, CCS technology is feasible and it’s available,” EPA Administrator Gina McCarthy told a congressional panel in Washington today. “Coal can have a productive future.”

Critics say it’s too expensive.

“We know that CCS costs billions of dollars,” Republican John Shimkus of Illinois told McCarthy. “For these rules to be promulgated, we know we aren’t going to have any new coal-fired power plants because of the costs of CCS.”

The 582-megawatt plant is the first of its kind built on a commercial scale and will use a low-heat oxidation to convert lignite coal mined nearby into a synthetic gas that can be burned in a turbine to produce power. Carbon dioxide produced by that gasification will be extracted with a solvent and sold to oil producers to spur production in old fields.

By some measures, it may be one of the most expensive power plants ever built for the watts of energy it will generate. The utility got approval to recoup $2.88 billion in costs from ratepayers. In addition, the Department of Energy pledged $270 million in funding, and the company qualified for a federal tax credit of $133 million. The costs of the new lignite mine and carbon dioxide pipelines are additional.

While many national environmental groups support carbon capture, critics look at the Kemper project and see a disaster. The Sierra Club says even with the new technology, coal is both dirtier and more expensive fuel source than wind, solar or natural gas. And miners will continue to strip acres of land to unearth the coal, the group says.

“We see Kemper as a very expensive distraction,” Bruce Niles, head of the Sierra Club’s Beyond Coal campaign, said in an interview. “Our vision is that we skip right over carbon capture and storage.” ....

If Southern just abandoned coal and used the turbines it’s already testing to burn natural gas, it could cut the cost of construction by more than half and generate more electricity for the grid, according to Ashby Foote, president of the Bigger Pie Forum, a Mississippi-based free-market non-profit representing ratepayers and businesses. Unless natural gas prices top $10 a British thermal unit for years and years, the plant will never cost less than a similar gas one, he said, citing a Mississippi Power document from 2009.

“If that’s the break-even point, this is going to be a big loser,” Foote said in an interview, citing the current drop in gas prices following the hydraulic fracturing boom. “This will be a drag on prosperity in Mississippi for the next 40 years.”

The Department of Energy’s technology laboratory joined with scientists from Southern and engineering giant KBR Inc. (KBR) to design a system based on one used in refineries that would chemically transform low-grade coal -- the lignite with high moisture and ash content -- into so-called syngas.

“There are a lot of low-ranked coals around the world,” said Mike Knaggs, director of the office of major demonstrations at the Department of Energy, said in an interview. ......

Southern Co., which jointly owns the technology with KBR, tested its system at a facility in Alabama, and in 2006 its subsidiary Mississippi Power, which has about 200,000 customers in the state, began the process of getting the Mississippi Public Service Commission to approve a new plant in that state. It argued that the utility was dependent on an aging fleet of plants, which couldn’t meet new environmental regulations. Without a new coal plant, Mississippi Power would be 90 percent dependent on natural gas by 2020, according to Jeff Shepard, a company spokesman.

“Natural gas prices have been very volatile,” former Mississippi governor Haley Barbour, a proponent of the plant whose lobbying firm represents Southern, said in an interview. “It would be stupid to be reliant 80 percent on one fuel.” .....

In two separate announcements, Southern said it would take charges totaling $990 million for cost overruns in building the plant. It’s also going to issue bonds worth $700 million to $800 million. Ratepayers already got a 15 percent rate increase, and may have further bond surcharges and rate increases totaling 7 percent, according to Shepard. Southern agreed to lock-in rates at that level for the next seven years.

Altogether, the project is now expected to cost $4.7 billion. At that cost, the plant is now one of the most expensive power plants ever built for the amount of electricity it will produce, according to Niles, who doubts the project will work as advertised.

Moody’s Investors Service said it downgraded Mississippi Power to Baa3 from Baa2 on Aug. 6, because of “higher costs and ongoing difficulties being experienced by the company in completing the large and complex” Kemper project.

But capital costs are only part of the equation. Kemper will be the cheapest plant to operate once it’s up and running next year because it sits next to the reserve of low-cost lignite. It will also be selling carbon dioxide, sulfuric acid and ammonia that it pulls from its gasifier for an estimated $50 million a year, Shepard said.

And there are environmental benefits: carbon emissions will be 65 percent less than a conventional coal plant, and other pollutants will be largely eliminated altogether.
...... Rest of the article

10 comments:

Anonymous said...

Boondoggle for sure. Here is a company that has unlimited resources to hire the best talent/contractors. The project will end up costing 3 times the original estimate. They have the same problem with a nuclear project in Georgia or South Carolina. They either lied about the costs of these projects or they did not tell the truth to the related PSCs and public. Only thing that makes sense. And Haley Barbour is still out telling people that this cheaper energy will make your bill go up. He is proud to have pushed the bill that allows them to charge the rate payers prior to startup.EEEdoggie what a lobbying fool he is.

Anonymous said...

Gallo was on his show this morning on Supertalk radio talking about Kemper and what a great deal it was. He defended Haley Barbour and Feel Bryant on it all the way. He then defended dumping nuclear waste in Mississippi. Brabdon Presley was sparring with him and it was funny, Presley sounded like the conservative and Gallo sounded like a raging big spending big government liberal. even defending the Obama Energy department on Kemper. Mississippi Republicans are looking more and more like they are rudderless and clueless lately...

Anonymous said...

Governor Phildo is the Captain in charge of this rudderless vessel full of radioactive ideas that are not acceptable to most in our state. Has he lost his ability to think about what he says? I can't imagine him getting re-elected to a second term. Kemper is a disaster for the ratepayers and the Southern Company stockholders. Even Frontier's Josh Gregory can't stop him from his weekly screw-ups. Or maybe he is acting on his advice?

Anonymous said...

The more layers one peels back on Haley The Pardoner, the more you learn its all about Haley and not about being a conservative. Never in the history of the United States has someone, who has the power to pardon convicted murderers, bought them cars. That should tell you all you need to know about Shady Haley. Not even a liberal can lay claim to that!

Anonymous said...

KF: Completely OT but where can a girl find out how much AON Hewitt contributed to Congress while it "debated" Obamacare?

Anonymous said...

Kingfish, what's the scoop on KIOR ?

Seems like those ole pine cones ain't magically turning into a gallon of unleaded as fast as promised.

Anonymous said...

Please, conservatives, explain to me how making rate payers " invest" in business start up costs up front without any sharing in any profits that might be generated is capitalism?

And, tell me how making citizens pay for the salaries of the executives, contractors and employees for a business that may never recover a profit and then making the citizens pick up any debt from the boondoogle is capitalism? Isn't that more like communism where those who have power with the government are paid whether they is succeed or fail?

Anonymous said...

Word of the Day: Oligarchy

Bill Dees said...

@4:27 - "Has [Bryant] lost his ability to think about what he says?" Are you kidding me? He's never had that ability. The last job he held for which he was even marginally qualified was Deputy Sheriff in Rankin County. Think about what he says? Hell, he can't think about what he thinks! He's like a little robot - he goes where he's programmed to go, and says what his handlers tell him to say. He's never had an original thought in his life.

Anonymous said...

Yes, Phil makes Finch look elegant.
What I don't understand is why voters can't compare a politician's earned income with his life style and get a hint.
Phil loves being able to afford better boots and shinier suits!
When guys who had government jobs all their lives have the lifestyle of those who earn several hundred grand a year, check your wallet!


Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel

Archives

Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
.