IGCCcostwrap

19 March 2010 -- Mississippi Power Co. on March 18 proposed capping the cost of its proposed 582 MW Kemper County integrated gasification combined cycle (IGCC) coal-fired power plant at $3.2 billion, or almost $5,500/kW. The cap would be around 30 percent higher than the current estimate of $2.4 billion, or $4,123/kW, for the coal-fired power plant.

In early March, Tenaska said its planned 602 MW Taylorville coal to gas-fired power plant would cost about $3.5 billion and enter service in 2014. The estimated cost for that power plant is around $5,800/kW.

Mississippi Power executives last month told state regulators the company could guarantee neither the cost nor performance of the coal-fired Kemper County IGCC facility without risking the company's future credit rating and access to capital.

"While Mississippi Power recognizes there are no provisions in the law for cost caps, we also recognize the commission's need and our customers' need for some reasonable assurances against uncontrolled cost increases," the utility said in a statement on March 18.

The facility is being designed to burn Mississippi lignite. State regulators are weighing the risk and rate impact of building the coal project versus buying power under long-term contracts from existing generating plants that burn natural gas. The three-member commission is expected to issue a decision in early May. 

Tenaska said its planned 602 MW Taylorville coal to gas-fired power plant would cost about $3.5 billion and enter service in 2014. The cost is around $5,800/kW.

Tenaska said its proposed Taylorville Energy Center will use Siemens integrated gasification combined cycle technology to convert coal into a synthetic natural gas and then burn the gas to generate electricity. The conversion process would also separate pollutants such as sulfur dioxide, mercury and nitrogen oxide.

The power plant design uses carbon capture and storage (CCS) technology and would capture more than half of the greenhouse gases produced. Tenaska said the plant’s emissions would be comparable to a natural gas-fired plant of similar size.

Tenaska based its cost estimates on construction starting in December 2010, with the power plant entering service in December 2014.

Tenaska still needs an air permit from environmental regulators and the Department of Energy to complete its review. In July 2009, DOE selected the Taylorville project for a $2.5 billion loan guarantee. The facility will be on a 713-acre site near Taylorville about 35 miles southeast of Springfield. Christian County Generation LLC, a joint venture between Tenaska and MDL Holding Co of Louisville, Kentucky, is developing the project.

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