The companies are negotiating a combination of a joint ownership arrangement and a purchase power agreement which would provide South Mississippi Electric with up to 20% of the capacity and associated energy output from the plant.

Mississippi Power has proposed building an electric power plant in Kemper County, Mississippi, that is expected to capture 65% of carbon dioxide (CO2) emissions. The plant will use Mississippi lignite to fuel the technology.

Jim Compton, general manager and CEO of South Mississippi Electric, said: “We are continually looking for additional generating capacity to meet the growing demand for electricity for our Member distribution cooperatives and their consumers.

“As we look to a future with volatile fuel prices and new environmental regulations, it is clear to us that Mississippi Power’s proposed Kemper County IGCC project – using low-cost Mississippi lignite – is a viable alternative to help meet our long-term generation resource needs.”

Pending Mississippi Public Service Commission’s approval, construction would begin in 2010. The proposed generation station is a 582 megawatt power plant that would begin commercial operation in 2014. South Mississippi Electric will also need regulatory approval from the Rural Utilities Service.

The plant is likely to capture 65% of carbon dioxide emissions and the carbon dioxide will be used in the enhanced oil recovery industry. With carbon capture technology, the Kemper County IGCC facility is expected to be equivalent to a new natural gas combined cycle generation resource with respect to CO2 emissions.