Southern Co. Defends its Advanced Coal Plant and Says it is Committed to Safe Operations

by | Jul 7, 2016

Coal plantSouthern Co. is firing back at a piece in the New York Times that presents its advanced coal plant in Mississippi at as a boondoggle that has gone awry. In truth, the Atlanta-based utility has been a pioneer in technology development, spearheading a range of innovations ranging from solar plus batteries to the latest nuclear plants to the carbon capture coal plants.

But the Times piece laid into Southern’s management of the so-called Kemper plant, which has surpassed its original timetable and its projected budget, by billions. The news story, which appeared on Tuesday, interviewed a whistleblower who had said that the utility was more interested in keeping its technical troubles under wraps and in preserving the subsidies given to the plant; the facility now cost about $5 billion and taxpayers will pick up about half of that.

To this end, Southern issued a detailed press release. Here are some excerpts:

“Rather than educate readers on the worldwide benefits of this cutting-edge, first-of-its-kind facility, today’s New York Times article on the Kemper project provides a negative recap of previously disclosed developments that have already been addressed.

“The only element of today’s story that is actually new to the public discussion is the content from the former employee’s secret recordings of private conversations with current company employees. In drawing from the recordings, the Times captured specific phrases from sometimes years-old conversations – without providing appropriate context – to achieve a pre-determined objective and tone …

“Despite the company’s unequivocal belief that the Kemper project is the right project for Mississippi, history tells us that any undertaking this large is bound to have some detractors. While we have found that the plant’s supporters far outnumber its critics, we actively listen to all sides, taking questions regarding the successful completion of the project very seriously. Through our rigorous project oversight efforts — which include regular, detailed analysis by all levels of company leadership and state regulators – the company has investigated, addressed and publicly acknowledged every founded concern regarding the safe and successful completion of the project.

The New York Times pieces centers on a whistleblower named Brett Wingo, who told the paper that the facility had “understated” the project’s costs and timetable and that the system of checks and balances was sidestepped.

The story goes on to say that the incentive for doing so had been that Southern wants to keep its subsidies and that revealing the technical issues would have undermined its noble goal: to create a power plant that can capture carbon emissions and to inject them underground to enhance oil recovery.

“I’ve reached a personal tipping point and feel a duty to act,” Mr. Wingo wrote in a 2014 email, the Times reports, which was among several that he sent to officials of Southern Company and Mississippi Power, the state utility that runs the plant, alleging that the company had broken federal law and engaged in corporate fraud, the story says. “Hope is not a strategy. This is a high-profile project with many misguided enemies, so why give them free ammo?”

Southern Co., in its rebuttal, paints Mr. Wingo as a disgruntled employee and says that his concerns had been addressed. He was fired in February 2016 — a termination that the Occupational Safety and Health Administration has said was illegal.

In BP’s June 2016 forecast, it says that while coal has taken a hit globally in recent years, it remains the dominate fuel source used around the world.

For some, this is a call to arms – to double down on the production of renewable energy. For others, though, it’s a different summons – to multiply the amount of investment in new technologies, especially those that can burn coal cleaner. No doubt, those are controversial and expensive undertakings. But with coal expected to supply at least a third of the global electricity supply in 2035, it makes sense.

As such, the United States is well positioned to lend a hand — “solutions,” by all accounts, which are imperfect but which can take the sting out of burning coal straight up. Already, both China and India are investing in advanced coal technologies that are more efficient — and by extension, cleaner — than the older pulverized coal plants that are prevalent there.

And if there is a market for advanced coal production, Southern Company would like to sell its coal gasification technologies, says Tom Fanning, chief executive of Southern Co., in previous talks with this writer. The utility, he adds, would license the tools to capture and bury carbon, or use them to enhance oil recovery as it trying to do at its Kemper project in Mississippi.

Fanning is presently talking with China, although he is open to introducing other nations to the concept — a technology that he says will eventually be cost effective and as clean as a natural gas plant. Right now, though, carbon capture and sequestration remains expensive and unproven, which is why the supercritical and ultra-supercritical advanced coal technologies may initially be more practical.

“I do believe coal is coming under pressure,” adds Fanning. “You will need combined-cycle natural gas plants. You will need to build peaking units to follow renewables,” when the weather doesn’t permit.

“I get what EPA is trying to do,” he adds. “But it does not have the lens that we do in business … We need to let the market decide what is best for customers,” Fanning says, noting that Georgia does not have a renewable portfolio standard and yet, Southern has been named the solar investor-owned utility of the year by a leading solar industry trade group.

A free-marketer at heart, Fanning’s company is nonetheless the recipient of government’s hand: Southern’s nuclear plant has received a loan guarantee worth billions while its advanced coal plant is getting subsidized. Both are cutting edge technologies that are too risky for private companies to take on alone — projects that only those with the deepest pockets can absorb, along with the government.

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