Steve Wilson writes for Watchdog.org that it might be cheaper to run the Kemper Project clean coal power plant’s turbines on natural gas, but Mississippi Power wants customers to pay most of the cost for the coal gasification part of the plant.
The company released an economic viability study Tuesday that shows running Kemper on natural gas would be more cost-effective in low-to-medium natural gas price scenarios. Using lignite coal as a fuel was the most economically viable solution in only three of the nine scenarios run by the utility, all of which required high natural gas prices.
The high gas prices needed to make Kemper’s gasifiers economically worthwhile aren’t likely in the current climate. Thanks to a warm winter, natural gas prices have slid 29 percent this year and could slide further in the worst price decline since 2006. On Thursday at the New York Mercantile Exchange, prices were $2.643 per million British thermal units.
Despite the study, the company plans to press ahead with a proposed rate increase to cover the costs of building the plant’s two gasifiers, which convert lignite mined on site into synthesis gas to fuel the facility’s electricity-generating turbines. A 15 percent rate increase passed in December 2015 to cover the parts of the plant that were in service on natural gas expires in June.