Mississippi Power’s Kemper plant nearing peak construction, creating jobs

Aug 9, 2012

Gulfport, Miss. – With commercial operation of its Kemper County integrated gasification combined cycle plant less than two years away, Mississippi Power is well-positioned to execute the most critical next steps in the peak construction phase beginning later this year.

"Our partnership with our construction contractors is stronger than ever," said Mississippi Power President and CEO Ed Day. "Together, for the benefit of Mississippi Power customers and Mississippians, we're safely executing on a 21st century coal plant that will deliver clean, safe, reliable and affordable energy."

Day further remarked that the company recently realigned the project work of onsite contractors so that each company can focus on its key competencies and bring the project online by May 2014.

Realigning the scope of work for the three onsite contractors--Yates Construction, KBR and Performance Contractors Inc. -- is expected to optimize each company's core strengths and lead to reduced overall costs for our customers.

KBR and Southern Company co-own the premier TRIG technology that will be utilized when the plant goes into service. KBR continues to be engaged in engineering and plant start-up.

Yates Construction is the primary and largest Mississippi contractor onsite. They will continue to build the combined cycle power plant and assume an increased scope of additional projects.
 
Performance Contractors Inc. will utilize its industry experience to continue building the gasifier and byproduct cleanup systems.

The Kemper facility is a 21st-century coal plant that will gasify lignite. This gasification will allow for a much cleaner generation process than a traditional pulverized coal power plant.

Mississippi Power also recently finalized a contract with Aquatech on a water purification system which will make the Kemper plant a zero discharge facility. None of the processed water used at the plant will make its way into local waterways.

Currently, more than 2,000 workers are onsite, with more than half from Mississippi. Mississippi Power anticipates having up to 2,500 workers onsite during peak construction, and more than 250 Mississippi companies are involved in the project.

The company also finalized contracts for the sale of three byproducts from the coal gasification process. Carbon dioxide, sulfuric acid and anhydrous ammonia will all be captured and sold. These revenues are higher than originally anticipated and expected to lower energy costs for our customers.

“From the very first day the Kemper facility goes online, our customers will realize these energy benefits on their monthly bill,” said Day. “Capturing byproducts onsite is one of the attributes that further proves that Kemper is the best long-term option for our customers’ energy future.”

Mississippi Power, a Southern Company subsidiary, serves approximately 186,000 customers in 23 southeast Mississippi counties.

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Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning completion of the Kemper integrated coal gasification combined cycle facility (“Kemper IGCC”), effects of the appeal to the Mississippi Supreme Court, costs of construction of the Kemper IGCC facility and related customer price impacts as well as the future financial condition of Mississippi Power.  Mississippi Power cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Mississippi Power; accordingly, there can be no assurance that such suggested results will be realized.

The following factors, in addition to those discussed in Mississippi Power’s Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; ability to control costs and avoid cost overruns during the development and construction of facilities; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; regulatory approvals and actions related to the Kemper IGCC, including PSC approvals, potential U.S. Department of Energy loan guarantees, the South Mississippi Electric Power Association purchase decision, utilization of investment tax credits, and the outcome of further proceedings regarding the PSC’s issuance of the certificate of public convenience and necessity; the ability of counterparties of Mississippi Power to make payments as and when due and to perform as required; interest rate fluctuations and financial market conditions and the results of financing efforts, including Mississippi Power’s credit ratings; and the impacts of any potential U.S. credit rating
downgrade or other sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the availability or benefits of proposed U.S. Department of Energy loan guarantees. Mississippi Power expressly disclaims any obligation to update any forward-looking information.

For further information: Call Jeff Shepard at 228.865.5543 or 1.800.821.6383 or email jshepard@southernco.com


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