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Environmental groups are skeptical of Mississippi Power's plan to reduce surplus generation capacity

  • Jun 17, 2021 8:28 am GMT
  • 183 views
Source: 
The Winona Times & Conservative

Mississippi Power filed its plan to comply with an order from regulators to reduce its surplus generation capacity, but an environmental group and several trade associations say the utility's plan doesn't meet the standards imposed by the order.

Despite promises in its plan to retire 976 megawatts of fossil-fueled generation capacity, upgrade its infrastructure and increase its renewable portfolio, the plan isn't satisfactory to several intervenors providing comments for the Mississippi Public Service Commission.

These groups include the Advanced Energy Management Alliance trade association, the Southern Renewable Energy Association, the Sierra Club and the Southern Alliance for Clean Energy.

In its filing, the Sierra Club says the plan isn't a useful document and didn't incorporate enough input from outside groups. It also says the company needs to accelerate the retirement schedule of one of its fossil-fueled power plants (Plant Daniel in Escatawpa), use modeling for future generation needs that doesn't use flawed assumptions and devote more funding to energy efficiency programs, especially those for those in poverty.

The Southern Alliance for Clean Energy wants the commission to reject the Mississippi Power's plan, enact efficiency targets that increase annual customer savings to 1 percent of retail sales and reopen the docket to assure that distributed generation sources are optimized in future plans.

The Advanced Energy Management Alliance told the commission in its filing that the plan doesn't take into account distributed energy resources such rooftop solar, which the association says could fully utilizing nationwide could create 1.4 million jobs in the U.S. by 2050. The group also says that the commission needs to set a specific target for improved energy efficiency and that the number of low-income customers assisted by the company needs to be increased.

In its filing, the Southern Renewable Energy Association says that the utility opposed nearly all intervenor participation in the docket opened by the PSC. It also recommends that the PSC provide a formal process to allow intervenors to get their data requests satisfied by the utility and hire outside consultants to review the data for the integrated resource plan. The SREA was also critical that Mississippi Power didn't include wind energy, solar resources (added to the plan in 2025), participation in an energy market and investment tax credits for renewable energy projects in its plan.

In April, the Gulfport-based utility filed its plan with the PSC that was part of the February 2018 settlement reached between regulators and the utility over the controversial Kemper Project power plant.

This plan presents a detailed examination of Mississippi Power's generation capacity and what needs to be retired to comply with a December 17 order that mandates the utility retire 950 megawatts of generation capacity.

The utility plans to retire 976 megawatts of capacity by 2027, including one unit at Gulfport's Plant Watson (268 megawatts), two units by 2025 and 2026 at a plant in Greene County, Alabama that total 206 megawatts and the 502 megawatt coal unit at Plant Daniel by 2027. The utility says it won't likely need new capacity by 2031 or later.

An Independence Day deadline is looming for the separate Public Utilities Staff to file comments on a plan. The next deadline will be July 24 for Mississippi Power to reply to any PUS comments. On August 13, the commission shall review the plan, note any deficiencies and

Mississippi Power utilizes six generation plants in its portfolio, with the three biggest ones in terms of generation capacity being Plants Daniel and Watson and Plant Ratcliffe in Kemper County (also known as the Kemper County Energy Facility). Mississippi Power operates a power plant exclusively for Chevron's Pascagoula oil refinery and receives electricity from two units at a plant in Greene County, Alabama that was converted from coal to natural gas.

Mississippi Power also has Plant Sweatt in Meridian, which is the utility's smallest and oldest generation facility with only 3.94 megawatts of generation capacity from one gas-fired turbine.

Plant Daniel has two gas-fired combined cycle units (1.07 gigawatts generation capacity) along with two coal-fired units (500 megawatts capacity) and is the state's largest power plant in terms of capacity. In addition to Mississippi Power, the two coal units provide capacity for northwest Florida's Gulf Power.

Retirement of one of Plant Daniel's units makes sense since Gulf Power was purchased from the Southern Company by Florida-based NextEra Energy in 2019. The purchase agreement for electricity from the two Plant Daniel units expires in 2024.

Plant Ratcliffe (769 megawatts of capacity) was originally designed to be fueled by synthesis gas produced from a form of low-grade coal known as lignite using an expensive and complex chemical process.

The $7.5 billion plant (ratepayers will end up paying $1 billion for it while the company will pick up the remaining $3 billion) in Kemper County was also meant to have an elaborate component that removed 65 percent of the carbon emissions and other byproducts from the gas stream for sale to industrial customers. Running the plant on syngas would've reduced its capacity to 582 megawatts through parasitic loads from running the processes required to transform lignite into syngas and remove the pollutants.

The plant was supposed to cost $2.4 billion, but the cost increased by 212.5 percent to $7.5 billion.

Since Mississippi Power was unable to get the plant working on a reliable basis and costs continued to escalate, the PSC, the utility and intervenors reached a settlement in 2017 that scuttled all attempts to get the gasifer units (which converted lignite to syngas) operational.

The remediation of the lignite mine located nearby and the dismantling of the gasifier units are scheduled for completion by 2024.

Discussions
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Rao Konidena's picture
Rao Konidena on Jun 18, 2021

This is a key para

"The Advanced Energy Management Alliance told the commission in its filing that the plan doesn't take into account distributed energy resources such rooftop solar, which the association says could fully utilizing nationwide could create 1.4 million jobs in the U.S. by 2050. The group also says that the commission needs to set a specific target for improved energy efficiency and that the number of low-income customers assisted by the company needs to be increased."

Distributed energy resources such as rooftop solar should be given a fair shake in the Integrated Resource Plans.

Matt Chester's picture
Matt Chester on Jun 18, 2021

Great point, Rao. I look at rooftop solar, behind-the-meter storage, and even demand management all in the same light: these are happening one way or the other, as consumers demand them and the market delivers. Do the utilities and the regulators want to embrace that and how it can benefit them when done smartly, or are they going to drag their feet and dampen the positive impacts that all can feel from them? 

Rao Konidena's picture
Rao Konidena on Jun 24, 2021

Hi Matt - one possible way to answer your questions in my opinion is, watch for how much is the utility assuming is the capacity contribution from rooftop solar, BTM storage and DR in their capacity planning models. If they are saying, we have x today but we expect to have multiples of x in future due to the reasons you cited - then, I think the utility is going about this in a smart way.

Matt Chester's picture
Matt Chester on Jun 24, 2021

Great point! Planning is necessary on a constant basis, re-looking at assumptions, and updating based on new developments. Plenty of utilities seem to have leaders that are taking this type of planning seriously

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