KEMPER COUNTY, Miss. - Dec. 13, 2006 - Mississippi Power has cleared the first major step toward building an advanced coal gasification facility, integrated gasification combined cycle (IGCC) plant, to generate electricity in Kemper County, Miss. The new generation technology would use locally mined lignite coal to produce electricity with significantly fewer emissions.

Mississippi Power has received Department of Energy certification for the project and Internal Revenue Service approval of tax credits allowed under the National Energy Policy Act of 2005.

“We are pleased to learn we have received investment tax credits for a possible lignite gasification project,” said Anthony Topazi, president and chief executive officer of Mississippi Power. “This opportunity to put in operation the most advanced clean coal technology wouldn’t have happened without the leadership and support of our Congressional delegation. Special recognition is due to Senator Lott for his untiring effort to craft and pass a meaningful energy bill that encourages investments in new technologies.”

“This is a forward-thinking project that puts Mississippi at the helm of America’s effort to achieve energy independence through more domestic production of alternative and traditional energy sources,” U.S. Senator Trent Lott of Mississippi said. “For years I’ve been urging our nation to adopt a comprehensive national energy strategy that employs a diverse portfolio of technology, including alternative energy sources like lignite. When completed, this plant not only will bring new jobs to East Mississippi, it will help strengthen America’s economy and protect our national security, making us less dependent on unpredictable, sometimes hostile, foreign nations for our energy needs.”

“This federal support is a crucial first hurdle cleared to position this technology as a viable option as the next choice of generation to meet our customers’ future needs. Now we must work to clear other hurdles necessary to demonstrate that it is the best option for our customers,” Topazi said.

“This project brings hope and the promise of a brighter future to East Mississippi, an area of the state that can certainly benefit from it,” Mississippi Governor Haley Barbour said. “I am pleased as well because the project shows genuine interest by an outstanding company in helping Mississippi gain a new reputation as a leader in advanced, efficient, clean coal technology.”

“Over the past 15 years, working in concert with the Department of Energy, Southern Company has invested millions of dollars researching and developing new clean coal technologies,” said David Ratcliffe, Southern Company’s chairman, president and chief executive officer. Mississippi Power is a wholly-owned subsidiary of Southern Company.

“We’re now moving from the research lab to practical application. It is the culmination of years of hard work to convert our research into large-scale power production facilities,” said Ratcliffe. “The support provided under the Energy Policy Act for clean coal technologies significantly advances the realization of environmentally sound solutions to our nation’s future energy needs.”

The proposed 600-megawatt plant would require an approximate investment of $1.8 billion and would create approximately 540 new construction jobs and 260 permanent jobs. The plant would be completed in 2013.

The proposed plant would use an air-blown integrated gasification combined cycle (IGCC) technology that offers a simpler and more robust method for generating power from coal than other gasification alternatives. It is unique in that it is cost-effective when handling low-rank coals and when using coals with high moisture or high ash content. These coals, which include lignite, make up half the proven U.S. and worldwide coal reserves.

Simply put, the process works like this: Coal is put through a device called a gasifier where – by being subjected to high temperatures and high pressure – the coal undergoes a chemical reaction resulting in the creation of a synthetic gas.

The cleaned synthetic gas would then be used to generate power by firing it in a gas turbine. The flue gas from the combustion turbine discharges into a heat recovery steam generator (HRSG). High-pressure superheated steam raised in the HRSG is mixed with high pressure superheated steam from a synthetic gas cooler and then expanded through a reheat steam turbine to generate additional power.

In partnership with Kellogg, Brown and Root, DOE and others, Southern Company has for many years conducted research on advanced coal technologies at the Power Systems Development Facility (PSDF) near Wilsonville, Ala. Through its involvement in the design, construction, operation and management of the PSDF, Southern Company has years of experience with coal gasification technology.

Mississippi Power, a Southern Company subsidiary, serves customers in 23 southeast Mississippi counties. The company earned a 2006 Edison Award, the electric utility industry’s most prestigious honor, for restoration efforts after Hurricane Katrina.

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