NewsRelease

ForImmediateReleaseJune30,2010

Contact:
KurtBrautigam,SouthMississippiElectric

601.261.2348or228.861.0508(cell)

kbrautigam@smepa.coop
www.smepa.coop

SouthMississippiElectricAgreestoPursueMinorityOwnershipin
MississippiPowerCompanysKemperCountyIGCCProject

SouthMississippiElectricPowerAssociation(SME)andMississippiPowerCompany(MPCo)
haveagreedtoanAssetPurchaseAgreementallowingforSMEtopurchasea17.5%interestin
MPCosKemperCountyIntegratedGasificationCombinedCycle(IGCC)Project,whichwas
recentlygrantedapprovalbytheMississippiPublicServiceCommission.

Withtheagreement,approvedtodaybytheAssociationsBoardofDirectors,SouthMississippi
Electricintendstopurchase103.5megawattsofthe582megawattpowerplantslatedtobegin
commercialoperationin2014.Thetransactionwillbecomefinalafterthetwoorganizations
completeanownershipandoperatingagreementoverthecourseofthenextyear.SMEmust
alsosuccessfullysecurefinancingforitsshareoftheprojectandreceiveapprovalfromits
primarylender,theRuralUtilitiesService.

Thestateoftheartelectricpowerplant,tobelocatedinKemperCounty,Mississippi,will
convertMississippiligniteintosyntheticgastopoweracombinedcyclegeneratingunit.The
plantstechnologywillcapture65percentormoreofcarbondioxide(CO)emissions.

Ourorganizationshaveacloseworkingrelationshipandwehavefollowedtheplanningforthis
facilityveryclosely,saidJimCompton,SouthMississippiElectricsgeneralmanagerandchief
executiveofficer.Weneednewgeneratingcapacitytomeetthegrowingpowerdemandof
ourMemberdistributioncooperativesandtheirconsumers,andthisisanexcellentfitforour
system.

SMEsignedaLetterofIntentinSeptembertoexploretheacquisitionofaninterestinthe
project,andsubsequentinvestigationandduediligenceindicatedpotentiallongtermsavings
fortheAssociationbyowningaportionofthefacility.

More

SouthMississippiElectrictoPursueMinorityOwnershipofKemperCountyIGCCprojectpage2

Aswemakeplanstomeetfutureneedsandarefacedwithfluctuatingfuelpricesandpossible
newenvironmentalregulations,webelieveitisvitaltomaintainadiversemixofgeneration
options,saidCompton.Thecombinationofastable,lowcostfuelsource,supportfromthe
DepartmentofEnergy,closeproximityandthecuttingedgeenvironmentaltechnology
associatedwiththisprojectweresignificantconsiderationsinourBoardofDirectorsdecision.

Alsoknownasgasification,IGCCisaprocessthatconvertscoalintoasynthesisgasthatcan
generateelectricitywithfeweremissionsthanexistingpulverizedcoalfiredpowerplants.With
itscarboncapturetechnology,theKemperCountyIGCCfacilitywillbeequivalenttoanew
naturalgascombinedcyclegenerationresourcewithrespecttoCOemissions.Thecarbon
dioxidebyproductwillbemarketedtotheenhancedoilrecoveryindustry.

SouthMississippiElectricisoneofourlargestcustomersand,likeus,isresponsiblefor
providingaffordable,reliableelectricservicetothousandsofitsmembersinourstate,said
AnthonyTopazi,presidentandchiefexecutiveofficerofMississippiPower.Wewelcomethe
opportunitytofurtherourpartnershipthroughthevaluethatthisfacilityprovidesinmeeting
ourcollectiveneeds.

SouthMississippiElectric,agenerationandtransmissioncooperativeheadquarteredin
Hattiesburg,provideswholesalepowertoitselevenmemberownerelectricpower
associations,whichservemorethan406,000homesandbusinessesin56ofthestates82
counties.SMEownsmorethan1,200megawattsofgenerationcapacity,includinga10%
interestinGrandGulfNuclearStationinPortGibson,Miss.

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