[Federal Register Volume 77, Number 119 (Wednesday, June 20, 2012)]
[Notices]
[Pages 36996-36997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15035]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Rural Utilities Service


South Mississippi Electric Cooperative: Plant Ratcliff, Kemper 
County Integrated Gasification Combined-Cycle (IGCC) Project

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of Adoption of a Final Environmental Impact Statement.

-----------------------------------------------------------------------

SUMMARY: The South Mississippi Electric Power Association (SMEPA), a 
rural electric generation and transmission cooperative, has approached 
the USDA Rural Utilities Service (RUS, the Agency) for financial 
assistance through which SMEPA would acquire a 17.5% undivided 
ownership interest in Plant Ratcliff, an Integrated Gasification 
Combined-Cycle (IGCC) Project currently under construction in Kemper 
County, Mississippi (hereinafter ``the Project'') and owned by 
Mississippi Power Company (MPCo). In accordance with RUS Environmental 
Policies and Procedures, 7 CFR 1794, RUS has discretion in determining 
whether a proposal is subject to the National Environmental Policy Act 
of 1969 (NEPA), 42 U.S.C. 4321, when potential borrowers will have only 
partial ownership of a project for which they are requesting financing 
(7 CFR 1794.20, Control). Though acknowledging that RUS financing will 
provide SMEPA with significantly limited control of the Project, RUS 
considers the Project subject to NEPA and to the National Historic 
Preservation Act (NHPA) and its implementing regulations at 36 CFR part 
800. This notice documents the efforts undertaken by RUS to ensure 
compliance with NEPA, NHPA, and all other applicable environmental laws 
and regulations through the adoption of the Final Environmental Impact 
Statement (FEIS) prepared for the Project by the United States 
Department of Energy (DOE) in cooperation with the U.S. Army Corps of 
Engineers (USACE).

DATES: Written comments on the Adoption will be accepted for 30 days 
following the publication of the U.S. Environmental Protection Agency's 
Notice of Adoption in the Federal Register.

FOR FURTHER INFORMATION CONTACT: A link to FEIS will be posted on the 
RUS Web site, http://www.rurdev.usda.gov/UWP-eis4.htm. To obtain 
additional information or provide comments, please contact: Emily 
Orler, Environmental Protection Specialist, USDA Rural Utilities 
Service, 1400 Independence Avenue SW., Stop 1571, Washington, DC 20250-
1571 or email: [email protected].

SUPPLEMENTARY INFORMATION: The Project will produce 582 megawatts (MW) 
of power through the use of clean coal IGCC technology. Lignite mined 
locally by North American Coal Corporation (NACC) will be converted 
into a synthesis gas (syngas) that will drive two gas combustion 
turbines. Heat recovery steam generators will convert excess heat from 
primary combustion to drive a steam turbine that will produce 
additional electrical power. The Project will demonstrate greater 
efficiencies and reduced carbon dioxide (CO2), sulfur 
dioxide (SO2), nitrogen oxide (NOX), mercury, and 
particulate emissions as compared to conventional lignite-fired 
electrical power plants. In addition to the IGCC facility and the 
mining operation, the Project requires the construction and/or 
upgrading of a natural gas supply pipeline, a reclaimed water supply 
pipeline, a CO2 pipeline, and electrical transmission 
infrastructure including power lines and substations.
    Southern Company, in cooperation with two of its subsidiaries, 
Southern Company Services and Mississippi Power Company (MPCo), has 
received cost-shared financing for the Project from the Department of 
Energy (DOE) under the Clean Coal Power Initiative. DOE conducted its 
NEPA review by preparing an Environmental Impact Statement (EIS) in 
cooperation with the U.S. Army Corps of Engineers (USACE), which 
resulted in the issuance of a Record of Decision (ROD) announcing the 
agency's decision to finance the Project in March 2010. MPCo received 
Air and Water Pollution Control permits from the state of Mississippi 
in March of 2010, and the Mississippi Public Service Commission issued 
a Certificate of Public Convenience and Necessity in May 2010.\1\ DOE's 
Mitigation Action Plan (MAP) was issued in September 2010 and 
construction began in December of that year.
---------------------------------------------------------------------------

    \1\ The Certificate of Public Convenience and Necessity has 
since been appealed, reversed by the Mississippi Supreme Court and 
remanded to the Mississippi PSC for further proceedings in March of 
2012. The Certificate was reissued by the Mississippi PSC on April 
24, 2012.
---------------------------------------------------------------------------

SMEPA Involvement and Request for Financing

    SMEPA is a consumer-owned, not-for-profit rural electric generation 
and transmission cooperative that provides wholesale electric service 
to its eleven (11) member distribution cooperatives in 56 counties of 
Mississippi. SMEPA's mission is to provide affordable and reliable 
power to its members. MPCo, a private utility that sells power to SMEPA 
to serve approximately a third of SMEPA members' power demands, 
approached SMEPA in 2009 with the opportunity to participate in the 
Project. Based on its need to diversify generation resources in the 
region, SMEPA elected to support the Project and executed a Letter of 
Intent to evaluate potential joint ownership. SMEPA has evaluated their 
participation in the Project based on forecasted power demand, an 
evaluation of alternatives, and consideration of the Project's overall 
economic feasibility. In 2010, SMEPA prepared a Generation Construction 
Work Plan (GCWP), which evaluated SMEPA's construction needs to meet 
their projected power demand based on feasibility, environmental 
acceptability, and affordability. The GCWP reviewed previous Power 
Requirements Studies (PRS) and a long-range Power Supply Option Study 
(PSOS), which evaluated SMEPA's existing generation resources and the 
projected demand growth, and established that SMEPA would be capacity 
deficient by 2015. SMEPA subsequently released a Request for Power 
Supply Proposal to identify potential resources to meet this demand. 
Taking into account demand growth, carbon emissions, construction 
costs, and gas price forecasts, the submissions were analyzed in 
comparison to self-build options (SMEPA-constructed generation 
facilities) and participation in the Project. SMEPA also accounted for 
potential financial implications of their participation in the Project 
for their members. Given that the Project will proceed regardless of 
SMEPA's participation, SMEPA's membership will be affected by Project-
associated rate increases associated with the construction and 
operation of the Project due to preexisting and immutable contractual 
agreements with

[[Page 36997]]

MPCo. SMEPA determined that partial ownership in the Project would help 
minimize the unavoidable rate increase. Based on these evaluations, 
SMEPA determined that a 17.5% undivided ownership interest in the 
Project would be the best overall option and has formally requested 
financial assistance from RUS to finance this action. SMEPA's partial 
ownership would include the IGCC facility, the CO2 pipeline, 
the reclaimed water supply line, the surface lignite mine, and 
electrical transmission facilities.

RUS Action

    RUS conducts the rural electrification loan program, which provides 
financing through direct loans and loan guarantees for the construction 
and operation of generation facilities and electric transmission and 
distribution lines and systems to improve electric service for rural 
Americans. RUS bases its decisions on financial, engineering, and 
environmental considerations. RUS assessed whether SMEPA would have 
sufficient control and responsibility to alter the development of the 
Project in order to determine if the project is subject to NEPA, in 
accordance with 7 CFR 1794.20. Through discussions with SMEPA, and 
review of loan and contractual documentation, RUS established that the 
project will be completed regardless of RUS-funded SMEPA participation. 
RUS further established that the Joint Ownership and Operating 
Agreement (JOOA), to be executed with MPCo, will provide SMEPA with 
only a limited ability to influence the Project.\2\ However, due to the 
Project's significant public interest and potential federal 
expenditure, RUS decided to consider the Project a federal action 
subject to NEPA and an undertaking as defined by Section 106 of the 
NHPA.
---------------------------------------------------------------------------

    \2\ Through the JOOA, SMEPA would only be granted audit rights 
and authority for on-site representation during Project construction 
and operation. Should a Project Management Committee (PMC) be 
formed, SMEPA's representation would be proportional to their 
percentage of ownership, and therefore limited to 17.5% influence 
over construction and management decisions.
---------------------------------------------------------------------------

    RUS reviewed transmission system impact studies and additional 
engineering studies provided by SMEPA, and the Final EIS (FEIS) and the 
associated MAP prepared by the DOE in cooperation with the USACE. RUS 
determined that SMEPA's participation would not require any additional 
infrastructure, and therefore would not cause any environmental impacts 
beyond what was identified and discussed in the FEIS. RUS reviewed and 
determined that the FEIS and MAP adequately assessed the potential 
impacts of the Project, and intends to adopt the EIS in accordance with 
40 CFR 1506.3 and 7 CFR 1794.72. RUS/SMEPA participation will not cause 
any additional impacts on historic properties. RUS has therefore 
determined that the Project qualifies as an undertaking with no 
potential to effect historic properties in accordance with 36 CFR 
800.3(a)(1).
    This notice documents the Agency's intent to adopt the DOE/USACE 
FEIS, and fulfills the agency's responsibilities for public 
involvement, in accordance with 36 CFR 800.2(d)(2).

Nivin Elgohary,
Assistant Administrator, Electric Programs, Rural Utilities Service.
[FR Doc. 2012-15035 Filed 6-19-12; 8:45 am]
BILLING CODE P