Abby L. Harvey
GHG Monitor
8/22/2014
The settlement between Southern Company subsidiary Mississippi Power and the Sierra Club resolving legal challenges to the company’s Kemper County Energy Facility in exchange for closing or converting several coal plants in the near future includes important wins for both sides, Natural Resources Defense Council Climate Programs Director David Hawkins said following the announcement of the settlement early this month. The agreement “looks like a good settlement both from the perspective of environmental improvement and from the perspective of Mississippi Power’s customers,” Hawkins told GHG Monitor in a written response.
The settlement isn’t as one sided as it may seem, Hawkins said. “When you look at the plants that [Mississippi Power] is committing to retire or cease coal burn and account for the fact that those commitments will help [Mississippi Power] comply with [the Mercury and Air Toxics Standard] and position them better to comply with any CO2 standard, I think they can argue to their customers/shareholders that these were not large concessions but simply an early specification of a compliance strategy they had already decided makes sense. In return they are getting clear sailing for the commercial operation of a huge new power plant,” Hawkins wrote. “That is not to demean what the Sierra Club achieved in this settlement. Even if [Mississippi Power’s] commitments make sense from [Mississippi Power’s] compliance planning perspective, there is value to the Sierra Club in getting them locked in and avoiding a fight over further investments at those units.”
The Sierra Club lawsuit in question against Mississippi Power challenged the construction permits issued for the Kemper Country Energy Facility, a new-build first-of-its-kind coal plant which, once operational, will utilize carbon capture and sequestration technology. The Sierra Club’s suit argued that the Certificate of Public Convenience and Necessity issued to Mississippi Power to begin construction on the Kemper plant did not meet the standards of Mississippi state law. “We still don’t think the Kemper plant is a good idea and I think the rate increases that Mississippians are already paying to pay for that plant before it even goes into service is a testament for that but at the end of the day this agreement … is a quantum leap forward for Mississippi,” Jenna Garland, deputy press secretary for the Sierra Club’s Beyond Coal Campaign told GHG Monitor.
As agreed to in the settlement, Mississippi Power will make several changes to its energy portfolio, increasing their natural gas use substantially while cutting back on coal use. At Plant Watson in Gulfport, Miss., the use of coal will be ended entirely and the plant’s two remaining coal-fired units will be transitioned to natural gas no later than April 16, 2015, according to a Mississippi Power press release. Two natural gas units at Plant Sweatt in Meridian, Miss. will be retired, and will be repowered with more advanced technology or converted to a non-fossil fuel source by the end of 2018. Coal use will also cease at Plant Greene County in Alabama, and two of the plant’s units will be converted to natural gas by April 16, 2016. “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,” Mississippi Power President and CEO Ed Holland said in the release. Further, Southern Co. will establish a $15 million grant for an energy efficiency and renewable energy program with the Mississippi Gulf Coast Community Foundation.
Mississippi Power emphasizes that these changes are being made to come into compliance with new federal environmental standards, “Mississippi Power has been working through options for the future use of generating units for years now to comply with standards set under federal environmental mandates – specifically for [the Environmental Protection Agency’s] Mercury and Air Toxics Standard or MATS,” Mississippi Power spokesperson Natalie Campen told GHG Monitor in a written response.
Further, the utility benefits in that it no longer has the threat of lawsuits from the Sierra Club hanging over its head, Campen said. “Mississippi Power and the Sierra Club have been working for several months to develop an agreement that both parties could find mutually beneficial. For Mississippi Power, the agreement was negotiated in an effort to protect customers and reduce uncertainty related to the Sierra Club’s multiple legal and regulatory proceedings … In all, the Sierra Club is withdrawing three court cases and four regulatory interventions filed with the Mississippi Public Service Commission,” Campen wrote. “The Sierra Club also agreed to refrain from formally intervening in all existing and anticipated regulatory proceedings for these two plants for a period of three years.”
