Brittiev. Rabbins~8ite Chance Page??! From: "Pinkston, Tim To: "Brittiey Robbins" CC: Date: 2/14/2008 10:53 AM Subject: Site Change Request for Cooperative Agreement Attachments: Kemper County Site Change Brittley and Diane. Attached is our request to change the site for the project under Cooperative Agreement DE-FCZB-OBNT42391 from Orlando, FL to Kemper County, MS. As requested, the document provides project cost information for the new site, a commitment ietter from Mississippi Power, scope and objective information, a new schedule, an assessment of repayment impacts, host site information and a discussion of key project . decision points. We look forward to continuing to work with you in demonstrating the TRIG technology. Let me know if you have questions or need more information. Tim Pinkston Project Manager Gasification Technoiogy Southern Company Generation Office 205-092-5042 Get! 205-907-2221 ?Kemper County Site Change Anthony J. Topazl 2992 West Beach President and Post Office Box 4079 Chief Executive Officer Gulfport, Mississippi 39502-4079 Tel 228-8856320 March 13, 2008 iirev lv?ls. Diane it. Madden, MKS National Energy Technology Laboratory US. Department of Energy/NETL 626 Cochrans Mill Road Pittsburgh, 15236 Dear Ms. Madden: As President and CEO of Mississippi Power Company (MPC), I want to confirm and clarify commitment to the execution of the TRansport Integrated Gasification (TRIGTM) project in Kemper County Mississippi. if the Department approves changing the site to Kemper County and the project continues to be the best economic option for the customers of MPC, we will move forward with obtaining reguiatory approval in the form of a certi?cation of need and necessity, and upon regulatory approval, execution of the project. As owner oi? the facility, will provide the non~federal cost sharing as shown in Southern Company Services? (SCS) site change request submitted to the Department on February l?l?h, 2008. The facility will be designed, procured and constructed by SCS under a Services Agreement dated January 1, I984 between MPC and SCS. The Services Agreement sets forth the terms and conditions under which SCS will render services to MPG in connection with the. project. The agreement authorizes SCS to (among other things) provide a wide range of financial, corporate, technical, and administrative services for MPG, and MPC agrees to reimburse SCS for all direct and indirect costs incurred by SCS in its activities on behall?et' MPG. Further, MPC agrees. to allow Department representatives to access the facility site during all stages identi?ed in the Cooperative Agreement (construction, start-u p, demonstration), subject to their with site, security, safety and other applicable rules and all applicable laws. MPC further agrees to allow Department representatives and third parties to access the Facility upon the completion of the demonstration - phase of the project for tours that are intended to further the commercialization of the TRIOTM Technology or to facilitate pubiic relations related to the ?l?cchnology, again, subject to compliance with the site, security, safety, and other applicable rules and any appiicable laws, MPG looks forward to the opportunity to work with the Department in this important project. Please let me know if you need further information or clarifications concerning the TRIO or facility to be located in Kemper County. Sincerely, Al '1?ij Enclosures cc: Brittley K. Robbins The Recipient (Cooperative Agreement DE-F026-06NT42391) considers the material furnished herein to contain con?dential business intermation which is to be withheld from disclosure outside the US. Government to the extent permitted by law. Randall i3 Rush Southern Company Generation Genotal Manager 42 invemess Center Parkway {Sasi?cation leohnoicgy Bin B228 Birmingham, AL 35242 Tel 205.982.8319 an: Energy to Serve We rlrt' February 12, 2008 National Energy Technology Laboratory Aim: Diane R. Madden, 922-342C 626 Cochrans Mill Road P. 0. Box 10940 Pittsburgh, PA 15236-0940 Dear Ms. Madden: Subject: Site-Change Request for parcze-osmmsu Southern Company Services, Inc. (SCS) is pleased to submit the attached documents in support of our request to change the site for the project under Cooperative Agreement from Orlando, FL to Kempcr County, MS. The relocated plant will be owned by Mississippi Power Company (MP0), a subsidiary of Southern Company. Originally the commercial operating date (COD) for the Mississippi facility was to follow the COD for the Orlando site by three years. With the temiu'nation of the Orlando site, the Mississippi site will new host the ?rst hill-scale demonstration of the Transport Integrated Gasi?cation technology with COD scheduled for June, 2013. The technical con?guration of the Mississippi plant will be very similar to the con?guration that was planned for the Orlando site and, therefore, all of the original project demonstration objectives will be met with the new site at no cost increase to DOE. Differences between the two sites that are relevant to the technology are as follows. - - The Mississippi IGCC is based on a 2x1 combined cycle with two gasi?cation trains instead of a 1x1 combined cycle with a single gasi?cation train. Each gasi?cation train fuels a GE combustion turbine, the same turbine planned for Orlando, so the gasi?cation trains are similar in size to the Orlando design. GE has completed combustion testing with the expected syngas and found that the same burner design can be utilized for the lignite and PRB derived syngas. The Mississippi IGCC will use Mississippi lignitc instead of PRB coal as its prinuny fuel. N?ssissippi lignite coal has been tested at the Power Systems Development Facility with good results. Southern Company plans to conduct a test with PRB coal in the Mississippi facility during the DOE supported Demonstration Phase of the project, resulting in a wider range of fuel testing than the original Orlando site. - The sul?rr removal and recovety system is different due to the higher sulfur content of the lignite coal. In both cases, selection of the sulfur removal and recovery system was based on commercially available technology and the best economics for each case. - . The coal drying system has been modi?ed to include a commercially available ?uid bed dryer for ef?cient removal of the higher moisture content of the lignite coal. The Recipient considers the ?uterial furnished herein to contain con?dential business information which is to be withheld from disclosure outside the US. Government to the extent permitted by law. 'i'ltomas A Fanning Southern Company Ch?et Operating Of?cer 3t) lvan Allen, Jr. Blvd, NW Bin 801505 Atlanta, GA 30308 Tel 404.508.0800 Fax 404.505.0394 February 11, 2008 Mr. Carl Bauer Director, National Energy Technology Laboratory US. Department of Energy/NETL 626 Cochrans Mill Road Pittsburgh, 15236 Dear Mr. Bauer: Southern Company is prepared to demonstrate the advanced coal gasi?cation technology, previously proposed in Orlando, Florida, developed in partnership with the Department of Energy, in Kemper County, Mississippi. Southern believes that the continuation of this project in Mississippi will be a clear and dramatic response to the Department?s goals of clean, secure, domestic energy for America. The relocated plant will be owned by Mississippi Power Company, a subsidiary of Southern Company. The Mississippi project has been under development for over a year and with its 2013 commercial operation date, will confront the ?rst-of-a-kind risks that the Orlando project was going to bear and help resolve. The Mississippi Project new becomes the ?rst commercial demonstration of and requires the Department?s approval of the site change ?'om Orlando to Kemper County in order to proceed. All of the original project demonstration objectives will be met with the new site at no cost increase to the Department. In fact, the objectives will be exceeded with the new site, since it will allow not only PRB coal to be tested, but also lignite. Demonstrating the use of lignite will open up the opportunity to use this largely underutilized resource which runs from Texas to Alabama to meet our nation?s energy requirements. Southern is strongly committed to moving the project forward and believes the Mississippi site provides the opportunity for achievement of the Department?s goals for America. In addition, the Governor and State of Mississippi are committed to the project because of its economic impact in a depressed region of Mississippi, the use of the indigenous lignite and for the opportunity to participate in technology development. Southern Company looks forward to continuing to work with the Department in advancing the TRIGTM technology. Sincerely, The Recipient considers the ?ute-rill furnished herein to contain con?dential business iitfonmtion which is to be withheld from disclosure outside the US. Government to the extent permitted by law. I "mama?, STATE or MISSISSIPPI . a OFFICE OF THE GOVERNOR \r?Z?vur??iz?? HALEY HARBOUR GOVERNOR February 8, 2008 The Honorable Samuel Bodman United States Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 Dear Secretary Bodman: I enthusiasticaliy support Mississippi-Power?s proposed Integrated Gasification Combined Cycle facility in Kemper County, Mississippi. 'i?hejobs and economic opportunity brought to East Mississippi by this generating plant can result in a much needed economic catalyst for this region?s development and prosperity. In addition to serving its citizens, Mississippi will gain a new reputation as a leader in advanced, ef?cient clean coal technology. The realization of this facility would place Mississippi at the helm of America?s ongoing effort to achieve energy independence through increased domestic production of alternative and traditional energy sources. Mississippi is committed to lead the way in supporting the Administration?s goal of pursing energy supply options as part ofa national energy strategy mix. In this endeavor, i believe ciean coal technologies must play a major role. The proposed IGCC facility and the very impact of this technology can be a tremendous positive force on the nation?s energy policy. As you consider your support for the proposed facility, be mindful of the remarkable impact a state-of-the-art project of this magnitude will have not only in power generation, but in serving the country to achieve. energy independence and dramatically enhancing the quality of life for our state. I feel strongly this project is in the very best interest for the United States and the State of Mississippi and ask that you extend the necessary federal support to move this project boldly forward. aley Barbour POST OFFICE BOX ?9 JACKSON. MISSISSIPPI 59205 (61.31) 359?350 FAX: {601} 350?3?? Southern Company Services, Inc. I Site Change Request Page 2 of ?7 February 2008 PLANT SITE INFORMATION FOR KEMPER COUNTY MISSISSIPPI This document contains a description of a plant site in Kemper County, Mississippi, information on Mississippi Power Company (MPC) and the impacts of executing the CCPI project under Cooperative Agreement DE-FC26-06NT42391 at that site. The plant at the Kemper County site will be owned by MPC, a subsidiary of Southern Company. Originally, the commercial operating date (COD) for the Mississippi facility was to follow the COD for the Orlando site by three years. With the termination of the Orlando site, the Mississippi site will new host the ?rst full-scale demonstration of the Transport Integrated Gasi?cation (TRIGTM) technology with COD scheduled for June, 2013. TECHNICAL CONFIGURATION OF THE PLANT The technical configuration of the Mississippi plant will be very similar to the con?guration that was planned for the Orlando site and, therefore, all of the project demonstration objectives will be met with the new site. Differences between the two sites that are relevant to the TRIGTM technology are as follows. - The Mississippi IGCC is based on a 2x1 combined cycle with two gasi?cation trains instead of a 1x1 combined cycle with a single gasi?cation train. Each gasi?cation train fuels a GE combustion turbine, the same turbine planned for Orlando, so the gasi?cation trains are similar in size to the Orlando design. GE has already completed combustion testing with the expected syngas and found that the same burner design can be utilized for the lignite and PRB derived syngas. The Mississippi IGCC will use Mississippi lignite instead of PRB coal as its primary fuel. Mississippi lignite has been tested at the Power Systems Development Facility with good results. Southern Company plans to conduct a test with PRB coal in the Mississippi during the DOE supported Demonstration Phase of the project, resulting in a wider range of fuel testing than the original Orlando site. The sulfur removal and recovery system is different due to the higher sulfur content of the lignite coal. In both cases the sulfur removal and recovery system was based on commercially available technology and the most economical selection for each case. The coal drying system has been modified to include a commercially available ?uid bed dryer for ef?cient removal of the higher moisture content of the iignite coal. STATUS, SCHEDULE AND PROJECT STRUCTURE FOR THE NEW HOST SITE The Mississippi IGCC is currently in the design phase and has deliverables consistent with those for the Orlando site. The project will continue be structured in 4 phases. To The Recipient considers the mteri-ll Furnished herein to contain confidential business information which is to be withheld from disclosme outside the US. Government to the extent permitted by law. Southern Company Services, Inc. Site Change Request Page 4 of 17 Februaq? 2008 EEmrE?nTrzi in Stert EQE GEE-E Aotivitlee Outside of Cooperative Agreement - - . . I r-Pssoo 01FEEIOTA aOMAvoii EiseeinerE . i 5 new: - BeeoE Co?st EEsdmete ECornpieEte i FP6318 9MPC GoiENo-Go . a FP6321 ommrua- 310C703 Em FESC Certi?cation i . I FPssat ouuma- 31 neon: 12:23 FEED Optimizations . oamowr I . . . . I amuse 30JUN1O Ga'sifiiEar EngErEtiierEng Ea. Procurement! . FPom 31DEC1O -CombEMd Cycle _D_e__sig? a. Procurernenlt Deteii Design Phase II - Budget Period 2 . #5th medium iaoecos NEPA RueerdE of Decision . I i Construction Phase - Budget Period 2 ounma' 17FEB11 I GaeEi?er Syr- .gee Cooler b?ca?on FPsseo 13m? I m_ GaEsI?or Pa ruo'uiet'o novice-Paw: etion szotii sneeze at MAR11 I cc ESitework. Grading. it UnEdergrounde FPssoo 03MAY1 o- 038EP1O . CeeEitIor sEite war I: - "10?71? . .. .. EIEZE Gi??crtpilinc - .. .. . .. I Gasi?nr- Undergrounde Home 01411:.? . CEEZE Ceeirior Foundatiene - szoes 15AUG12 - . I i CC Aboeegiound Conan-deEtioi-i PPsseo ouumz . Esmer- EreotE StmotuEraI Steel itPquzu 16JUL12 CC HERSG- installation FP2024 1 1EJUL12 . cc GEES TurbEnn-I ElnaEtallation ouumt ouumz Eff?j?: Piping I FP2042 snnecn ?222: sobetetLoMTrEtnomIanionE Instana?ori Finlah 2 Sta 3w. EnerE(4O 3 ouumz Gaei?eE- EleCtE'Ical a. lnetrumnta?on . . I FP2021 15mm? 15FEB12 . Em cc CoolingETowerE Emotion 93:33? Sonnet: i i FP404O 5 ire UnitA Gee E'i'eroineE . FPitots 15.1mm: 15mm 3 CC System a. Start-IE?: mm mocnz- .. I.. . . . Women-ammo. I..- o1ocrr12- 15mm 3 Ci Gaai?Ear EquianentE Cemmiee eEning FPeoas tsoc?TuEi-bino 1st Roll . . FPeoss 15JAN13 cc Performe- tee TeeEtino . osJUN-is - i - i :1 EIGCC ~5th Es. integration Trteie PPeaza OBJUN13 . . 2 . - Commercial operation . i Demonstration Phase Budget Period 3 3 . - Ppsans ouumr comm? CtEimrr-arital Kai-Pitch ?Ea-It PrcEerIm IE FP6311 050521?" .- I Final 8- 010qu E22222: Start Date O1JANU7 El?y Bar MP01 Sheet 1 9" 1 0919 Raidelon Checked Approved Date OSJUL15 .. Pro res: Bar Southern Company Generatlon ?m 9 MP0 IGCC - KEM PER COUNTY Run Date OBFEBDB 12:15 Cr?lcal A?lv?v DOE $ummary Report Flgure 9 Primavera Systems. Inc. The Recipient considers the material ?nished herein to contain con?dential business information which is to be withheld from disclosure outside the US. Cum-eminent no the extent by law. Sondtem Company Services, Inc. Site Change Request Page 6 of 17 February 2003 Table 1 - Overall Cost Summary Budget Period 1 Actual Budget Period 2A Projected Budget Period 23 Budget Period 3 Proposed Total CooPerative Agreement Amendment A003 Federal Cost Share 50% 45% 18.3% 13.4% 18.1% 34.8% Non-Federal Cost Share 50% 55% 81.7% 86.6% 81.9% 65.2% Federal Cost Share 3 9,282,200 15,108,608 218,995,303 50,363,889 293,750,000 293,750,000 Non- Federal Cost Share 5 9,282,200 18,466,077 978,793,603 324,790,161 1 ,331 ,332,040 550,517,321 Total 18,564,400 33,574,685 1,197,788,906 375,154,050 1,625,082,040 844,267,321 Phase 1 1 8,564,400 18,564,400 Phase 2A 11,368,883 11,368,883 Phase 3A 22,205,801 22,205,301 Phase 28 271,649 271,649 Phase SB 1,197,517,256 1,197,517,255 Phase 4 375,154,050 375,154,050 Total 18,564,400 33,574,685 1,197,788,906 375,154,050 1,625,082,040 The Recipient considers the mterial ?amished herein to contain con?dential business information which is to be withheld from disclosure outside the US. Government to the extent permitted by law. Southern Company Services, Inc. I Site Change Request Page 8 Of I7 February 2003 TABLE 3 COST ESTIMATE FOR BP 28 Labor Material Subcontract Total 5.1 - MISSISSIPPI POWER COMPANY 5.1.3 - MPG EQUIPMENT AND HATERJAL C10 - SITE PREPARATION 218,990 216,990 (311 - SITE IMPROVEMENTS 1,412,434 1,412,434 C12 - GENERAL SERVICES 1,895,792 1,896,792 013 - STTE ELECTRICAL COMMUNICATIONS 937,212 967,212 016 - BUILDINGS 2,164,267 2,164,267 022 BOILER 6 ASSOCIATED SYSTEMS 39,445 39,445 C23 - TURBINE STEAM PIPING SYSTEMS 5,596,870 5,596,870 C24 - EXTRACTION STEAM PIPING SYSTEMS 5,453 5,453 025 - HEAT RECOVERY STEAM GENERATOR AREA 39,366,621 39,368,621 C30 - ELECTRIC GENERATION BUILDINGS 27,446 27,446 031 - STEAM TURBINE SYSTEM 28,558,400 26,558,406 033 - CONDENSATE SYSTEM 2,667,744 2,667,744 034 . BOILER FEEDWATER SYSTEM 3,560,260 3,560,280 036 - COMBUSTION TURBINE 69,936,246 69,936,246 C40 - COAL HANDLING SYSTEM 13,477,077 18,477,077 C45 - NATURAL GAS SYSTEM - COMPANY OWNED 743,665 743,665 056 - SCR - RETROFIT 74,926 74,926 C60 - COOLING WATER SUPPLY 3,697,252 3,697,252 061 - COOLING TOWER 2,207,539 2,207,539 062 CONDENSER 3,409,314 3,409,314 063 - SERVICE WATER SYSTEM 3,235,625 3,235,825 C64 - OTHER WATER SYSTEMS 235,710 235,710 065 WATER TREATMENT AND CONDENSATE MAKEUP 170,216 170,216 066 WASTEMASTE WATER TREATMENT SYSTEMS 4,292,626 4,292,626 070 - ELECTRICAL 6 DISTRIBUTION 6,602,437 6,602,437 071 - SWITC HYARO 3,667,038 3,667,036 061 LOCAL ETC. 469,336 469,336 062 - MONITORING a. CONTROL SYSTEMS 3,043,374 3,043,374 064 - WATER ANALYSIS SYSTEMS 712,691 712,691 096 OTHER MISCELLANEOUS 314,665 314,685 CAA - GASIFICATION BUILDING 42,113,974 42,113,974 CAB - OTHER GASIFICATION FEEDSTOCKS STORAGE AND HANDLING 425,976 425,976 CAO - FEEDSTOCK PREP 57,560,752 57,560,752 CAD - GASIFICATION 62,576,766 62,576,766 CAE - GASIFICATION ASH REMOVAL I RECYCLE 25,229,627 25,229,627 CAF . SYNGAS TREATMENT 45,962,547 45,962,547 - SYNGAS COOLING.I HEAT RECOVERY 26,270,330 26,270,330 CAP - HOST PLANT INTERCONNECTIONS 2,014,071 2,014,071 5.1.3 - MPG EQUIPMENT AND MATERIAL Total 470,008,563 470,008,563 5.1.4 - MPG OTHER DIRECT COST 5.1.4.1 - TEMPORARY FACILITIES 005 - TEMPORARY FACILITIES 6 SERVICES 1,766,643 1,766,643 5.1.4.1 - TEMPORARY FACILITIES Total 1,766,643 1,768,643 5.1.4.2 - STARTUP EXPENSE 006 - PRODUCTIONISTARTUP 6,401,260 6,401,260 5.1.4.2 EXPENSE ToIal 6,401,260 6,401,260 5.1.4.3 - STARTUP FUEL 006 - PRODUCTIONISTARTUP 52,012,757 52,012,757 5.1.4.3 - STARTUP FUEL Total 52,012,757 52,012,757 5.1.4.4 - CONSTRUCTION INSURANCE CO7 - GENERAL OVERHEADS . 4,156,279 4,158,279 5.1.4.4 - CONSTRUCTION INSURANCE Total 4,158,279 4,158,279 5.1.4.5 - FREIGHT 098 - OTHER MISCELLANEOUS 13,601,146 13,601,148 5.1.4.5 - FREIGHT Total 13,601,148 13,601,148 5.1.4.6 - SALES TAX 093 OTHER MISCELLANEOUS 14,421,040 14,421,040 5.1.4.6 SALES TAX Total 14,421,040 14,421,040 5.1.4.7 - ESCALATION 099 OTHER 357,460,756 357,460,756 5.1.4.7 - ESCALATION TolaI 357,480,756 357,480,756 5.1.4 - MPC OTHER DIRECT COST ToIal - 33,224,848 381,639,035 449,863,803 5.1.5 - MPG SUBS 5.1.5.1 - GENERAL CONTRACTOR . 004 - CONSTRUCTION MANAGEMENT EXPENSES 15,101,750 14,902,986 14,731,730 44,736,460 005 - TEMPORARY FACILITIES 8- SERVICES 4,849,701 2,926,939 7,776,691 010 - SITE PREPARATION 675,103 5,870,000 6,545,103 011 - SITE IMPROVEMENTS 751,479 561,117 1,332,596 012 GENERAL SERVICES 955,957 116,699 1,072,656 013 -SITE ELECTRICAL 6 COMMUNICATIONS 637,917 261,826 1,099,744 014 -TRANSPORT FACILITIES PAVING 628,510 628,510 The Recipient considers the nun-rial furnished herein to contain con?denIizl business infomutinn which is to be withheld from disdosute outside the US. to the extent permitted by kw. Southern Company Services, Inc. Site Request Page i0 of Febt?tnry 21113 Table 4 - Cost Summary for BP 3 - Demonstration Phase Summary Note: All Amounts shown on this page are in Nominal SS 2013 2014 2015 2016 2017 Total Subcontractleutside Services Fuel and Related Costs . Coal =5 30,700,444 5 04,435,490 5 04,220,000 5 00,370,053 5 27,220,019 5 253,041,291 NaturalGas 5 1,000,113 1,542,032 5 1,523,300 5 1,570,090 5 000,422 5 0,529,451 AshDisposal 5 134,002 270,502 5 270,552 5 1274,437 5 110,450 5 1,000,092 Major Equipment Service Agreements 5 201,125 5 351,300 5 351,300 5 351,300 5 01,000 5 1,310,205 Total Subcontracts 5 32,202,343 5 00,000,204 5 00,305,300 5 00,575,140 5 20,204,499 5 201,953,039 Materials Estimated Hours of Gasi?er Operation 2,901 5,959 5,629 5,913 2,380 22,982 V. Expendable Process Materials and Subcontracts Operations Process Materials SulfurSoiventUsage?oss 5 197,490 5 413,534 5 404,519 5 410,327 5 105,153 5 1,591,029 Off-road 019001 5 120,035 5 251,290 5 245,010 5 249,347 5 100,301 5 900,059 Sand (bed Material) 5 14,327 5 14,000 5 14,000 5 14,000 5 0,000 5 04,230 Liquid Nitrogen 5 149,124 5 150,103 5 150,195 5 100,000 5 07,172 5 710,202 totals 5 400,903 5 034,020 5 021,130 5 042,000 5 350,771 5 3,330,400 Maintenance Related Parts and Materials Repair Parts Costs 5 574,021 5 1,295,742 5 1,943,013 5 2,591,404 5 1,349,731 5 7,755,391 Preventive MaintenancePartss 5 93,912 5 0,397,003 5 1,075,023 5 2,170,075 5 10,300,300 5 22,000,520 OutagePartsand ContractorLabor$ 5 5,917,013 5 20,253,305 5 9,000,700 5 13,010,340 5 29,497,000 5 70,479,700 LubricantsS 5 112,901 5 197.453 5 107.453 5 197,453 5 34.200 5 739,022 GasAnalyzerCalibration (3351053 5 71,465 51,614 5 51,614 5 51,614 3 29,840 5 256,148 Supptiess 5 3,762 5 6,576 6 6,576 5 6,576 5 1,142 6 24,631 totals 5 0,774,555 5 30,702,494 5 13,075,040 5 10,030,340 5 41,272,907 5 109,002,011 Total materials 5 7,255,530 5 31,537,114 5 13,090,705 5 10,079,230 5 41,031,730 5 113,200,411 ?Project Totais 5 39,457,002 5 90,143,370 5 00,202,171 5 07,454,302 5 09,030,237 5 The Recipietlt considers the material fumished herein to contain con?dential business in fonmtion which is to be withheld from disclosure outside the US. Govemment to the extent permitted by 11w. Southern Company Services, Inc. Site Change Request - Page 12 of 17 February 2003 Proposed Plant Site Kempey County "17.5 Miles Lauderdale County Existing 230 kV Transmission Line Figure 2 Proximity to Transmission Southern Company Operating Companies that intend to construct, own, and Operate a new generating facility to meet the resource needs of its native load customers are required to designate the new facility as a Network Resource and evaluate and provide the capability to deliver energy to the load from the designated Network Resource. The Operating Company (in this case, MPC) may make a Native Load Reservation (NLR) on the Southern Company Open Access Same-time Information System in order to provide such capability for planning and designing the transmission system to allow for future load growth. On March 22, 2006, such a formal request was made for a NLR for 600 MW in Kemper County, Mississippi, for the purpose of serving current and future native load customers. Con?rmation of this request can be found by viewing the Southern Company OASIS Website, speci?cally referencing OASIS #603928. For more information about the Southern Company OASIS, please refer to the web-dink The preliminary proposal for interconnection of the facility includes construction of new transmission circuits on new corridors along with the associated substations required to tie to the nearest existing 230-kV circuits. MPC will acquire all necessary right-of-way in order to interconnect and integrate the new power plant into its existing transmission network. The Recipient considers the material furnished herein to contain con?dential business information which is to be withheld from disclosure outside the US. Government to the extent permitted by law. Southern Company Services, Inc. DE-FC26-O6NT42391 Site Change Request Page 14 of 1? February 2008 Environmental The project site in Kemper County will fully meet all environmental requirements. MPC is an environmental leader with a proven track record of environmental compliance when operating an electrical generation ?eet. Preliminary discussions with state environmental of?cials were very productive with commitments to help secure the necessary site environmental permits in a timely manner. MPC has successfully secured these types of environmental permits as part of its normal ?eet operations and after consultation with State environmental of?cials, all of these permits are obtainable for the proposed facility. The air permit application was ?led in December of 2007 and the air permit is expected to be issued by November 2008. OTHER BENEFITS OF THE SITE IN KEMPER COUNTY Strategic bene?ts associated with the project include fuel diversity for MPC, increased reliability due to geographical diversity, advancing gasi?cation technology, utilization of a natural resource of Mississippi, and the economic development of an economically depressed area. Increased Fuel Diversity With the addition of a lignite-fueled generating facility, this project would enable MPC to reduce dependency on natural gas-?red generation and enhance energy mix. Currently, MPC does not own any generating plant with lignite as the primary feedstock. Overall, this increased fuel diversity would lead to less sensitivity to natural gas price volatility resulting in lower costs for MPC customers. Figure 3 illustrates the fuel diversity the plant brings to MPC customers. Reference Case IGCC Lignite Case 1% Year 2014 Gas Gas Lignlte a Goal gOther Coal Other. Figure 3 MP0 2014 Energy Mix The Recipient considers the material furnished herein to contain con?dential business information which is to be withheld from disclosure outside the US. Goventment to the extent pemtitted by hw. Southern Company Services, Inc. Site Change Request Page 16 of 1? February 2008 . MPC FINANCING AND OWNERSHIP STRUCTURE As of 12/31/2006, MPC has total assets of 1 .7 billion and Southern Company has total assets of $42.9 billion. capital expenditures for the past three years were $357 million and Southern Company?s were $7.4 billion. The source of funds for past outlays has been a combination of internally generated funds, equity contributions from Southern Company, short-term bank loans, commercial paper, and senior unsecured notes. MPC has also issued preferred stock, trust preferred securities and, when appropriate, tax-exempt pollution control bonds. In past years the company issued First Mortgage Bonds, but the last of the outstanding mortgage bonds and the underlying indenture was retired during 2005. primary source of long-term debt ?nancing has been its unsecured Senior Notes, which are rated and ?Al? by Standard and Poor?s and Moody?s, respectively. When issued, the Senior Notes are issued to the public pursuant to registration statements with the Securities and Exchange Commission (SEC). For short-term borrowing purposes MPC maintains committed credit facilities. As of December 31, 2006, MPC had committed credit agreements with various banks for approximately $232 M, of which $181 remained unused. The unused credit agreements provide liquidity support to the Company?s commercial paper program and for its variable daily rate tax-exempt pollution control bonds totaling $40 M. Although MPCmay consider project style non-recourse debt to ?nance this project, it currently anticipates this project will be ?nanced using its traditional sources of capital, including capital contributions from Southern Company. MPC anticipates that the long- term debt issued to fund this project will be rated and by Standard and Poor?s and Moody?s, respectively. MPC plans to own and operate the IGCC facility. Lignite is the primary feedstock for the facility and will be secured via a long-term agreement, potentially with NAC. The planned facility will be a part of the Southern Company generation ?eet and economically dispatched by Southern Company. MPC plans to include the plant in its regulated rate base and sell the majority of the plant?s output to its regulated retail and wholesale customers. MPC may also make sales to af?liated companies within Southern Company and to non?af?liates when economical. The costs of the facility and any revenue from sales are anticipated to be part of regulated rates. IMPACT OF SITE CHANGE 0N REPAYMENT AGREEMENT Since the repayment is based on license fees from future sales of the technology and not project generated revenues, the probability of repayment is not directly impacted by a host site change. The Mississippi site should positively impact future sales of the technology, since it will allow not only PRB coal to be tested, but also lignite. The Recipient considers the material furnished herein to contain con?dential business information which is to be withheld from disclosure outside the US. Government to the extent permitted by hw.