21 st Century Coal. Johnny Atherton 38 th Annual PURC Conference February 2, 2011

Transcription

1 21 st Century Coal Johnny Atherton 38 th Annual PURC Conference February 2, 2011

2 Presentation Overview Mississippi Power Historical Perspective Why IGCC? Integrated Gasification Combined Cycle Technology How It Works Enabling Legislation Regulatory Review & Approval Process Mississippi s Economic Engine

3 Greene County* Plant Sweatt Plant Eaton Mississippi Power Southern Company Customers 190, M Generating Capacity 3,200MW 42,000MW Employees 1,200 26,000 Plant Watson Plant Daniel Chevron CoGen

4 MW MPC Load Growth Projections Need for Base Load Generation 1500 Actual B05

5 $ per mmbtu MPC Fuel Market Outlook Cents per KWH 2005 Historical Projection $ $ $ $ $ $ $ Central APP PRB Natural Gas Crude Oil MPC Retail Fuel

6 / kwh MPC Retail Fuel Rate History % 32% -1% 17% 14%

7 Other Significant Considerations Fall 2005 Air Quality Water Quality Climate Change Traditional coal-fired generation not an option Hurricane Katrina

8 HOLD for gasifier video

9 Enabling Legislation Mississippi SB 2793 Base Load Generation Signed by Governor Barbour May 9, 2008 Mississippi HB 1693 Species Exemption Signed by Governor Barbour April 6, 2009

10 Mississippi Regulatory Process Original petition filing date January 16, 2009 Procedural order issued June 5, 2009 Needs evaluation Hearings conducted October 4-9, 2009 Order issued November 9, 2009 Resource determination Hearings conducted February 1-5, 2010 Certificate issued June 3, 2010

11 Diversity of Fuel is Critical Energy Generated 2008 Without Kemper 2020 With Kemper % 32% 23% 31% 67% 68% 46% Moderate Risk High Risk Moderate Risk Natural Gas Coal Lignite

12 NATURAL GAS PRICE IGCC at Kemper WINS High Greater Value CARBON COMPLIANCE COST $0 CO2 $10 CO2 $20 CO2 $30 CO2 Kemper Kemper Kemper Kemper Lower Risk Energy Mix 2020 Moderate with Volatility Moderate Kemper Kemper Kemper Kemper Kemper Kemper Kemper Kemper 23% 31% Low CC CC CC CC 46% Natural gas alternative is 30% more expensive A unique opportunity, BEST for customers

13 Million $ Energy Cost Savings of Kemper vs. Gas Combined Cycle At full operation, Kemper will save $200M to $400M per year in energy cost over gas Low Gas Price High Gas Price

14 Evolution of the PSC Order Construction Cost Cap MPC Proposed March 12, 2010 $3.2B Exceptions: - Specific force majeure events - Change of law - PSC approved cost increases Performance Guarantee ROE adjustment for first 5 years CWIP 75% in Prudence Determination Schedule Quarterly

15 Evolution of the PSC Order Construction Cost Cap Performance Guarantee MPC Proposed March 12, 2010 $3.2B Exceptions: - Specific force majeure events - Change of law - PSC approved cost increases ROE adjustment for first 5 years PSC Original April 29, 2010 $2.4B Exceptions: - PSC approved cost increases - AFUDC Penalty against stated values for 40 years CWIP 75% in None Prudence Determination Schedule Quarterly None

16 Evolution of the PSC Order Construction Cost Cap Performance Guarantee MPC Proposed March 12, 2010 $3.2B Exceptions: - Specific force majeure events - Change of law - PSC approved cost increases ROE adjustment for first 5 years PSC Original April 29, 2010 $2.4B Exceptions: - PSC approved cost increases - AFUDC Penalty against stated values for 40 years CWIP 75% in None Prudence Determination Schedule Quarterly None MPC Amended May 10, 2010 $2.88B Exceptions: - General force majeure language - Change of law - PSC approved cost increases - AFUDC Same as proposed on 3/12 0% in % in At least every 6 months

17 Evolution of the PSC Order Construction Cost Cap Performance Guarantee MPC Proposed March 12, 2010 $3.2B Exceptions: - Specific force majeure events - Change of law - PSC approved cost increases ROE adjustment for first 5 years PSC Original April 29, 2010 $2.4B Exceptions: - PSC approved cost increases - AFUDC Penalty against stated values for 40 years CWIP 75% in None Prudence Determination Schedule Quarterly None MPC Amended May 10, 2010 $2.88B Exceptions: - General force majeure language - Change of law - PSC approved cost increases - AFUDC Same as proposed on 3/12 0% in % in At least every 6 months PSC Final May 26, 2010 $2.88B Exceptions: - General force majeure language - Change of law - PSC approved cost increases - AFUDC Limited operational oversight 0% in % in At least annually

18 IGCC Plant at Kemper County Most advanced clean coal technology May 2014 In-Service Date 582 MW Capability CO2 Capture for Enhanced Oil Recovery Fuel 65%, equivalent to NGCC Mississippi Lignite $2.4 billion project estimate $2.88 billion investment cap Gulfport Kemper IGCC Meridian

19 Mississippi s Economic Engine Coal Gasification with CO 2 capture Enhanced Oil Recovery CO 2 Low Cost Energy Mine-mouth Lignite Economic Growth Oil Production oil

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