Former Gov. Haley Barbour believes Mississippi Power's $2.4 billion lignite coal gasification plant under construction in Kemper County is not only viable but will contribute to keeping energy prices low in Mississippi for decades to come, which bodes well for economic development.

Barbour spoke Tuesday before the Madison County Business League about the necessity for a solid Mississippi energy policy.

The gathering, billed "Coffee with the Governor," is an annual event held jointly with and the Madison County Economic Development Authority. Hundreds of Madison County's top business and political leaders were on hand.

"Over my eight years as governor I worked for economic development, more and higher paying jobs and greater exploitation of Mississippi's natural resources, especially in the energy sector," he said. "Today's high capital cost means a rate spike now, though smaller than expected, but cheap fuel will deliver low cost base load electricity for decades down the road, like Grand Gulf (Nuclear in Port Gibson.

"This is all crucial because energy is so important to economic growth, job creation and broad prosperity in the short and long term," he added. "Long-term energy policy that promotes and takes advantage of more affordable, abundant, American energy and genuinely accesses all of our available fuel resources is essential to America's and Mississippi's economic prospects and our national security."

The Kemper County Coal Plant has come under fire by organizations such as the Sierra Club and the Bigger Pie Forum. The BPF suggests that Mississippi Power, South Mississippi Electric Power, and East Mississippi Power ratepayers will see rate increases up to 60 percent when it's all said and done.

Barbour dismissed those claims and said those ratepayers will see an increase in the neighborhood of 22-24 percent, much lower than rate increases from the last two power plants built in the 1980s.

"After Grand Gulf came on line, rates went up 54 percent," he said. "Mississippi Power's Plant Daniel was its latest new base load power facility for its customers. It came on in the '80s as well. Rates went up 34 percent."

He explained that 15 of the 18 percent increase that was approved by the Public Service Commission has already gone into effect.

Ratepayers will see a 3 percent increase from that, and another 4 percent increase down the road since the Legislature allowed Mississippi Power to securitize costs up to $1 billion.

However, Mississippi Power has contended that they will only seek to securitize some $700 million instead of the full $1 billion. If they chose in to future to securitize another $300 million, that would result in a roughly 2 percent increase - leaving the maximum increase now at 24 percent.

"This is about two-thirds the increase passed on the customers in the '80s when Plant Daniel came on," Barbour said. "It is well less than half what Entergy customers paid when Grand Gulf came on in the mid-'80s."

Barbour said landowners will receive approximately $400 million over the first 40 years for sale of their lignite coal, a resource the former governor believes is "useless" outside the bounds of what will take place at Kemper.

"That lignite will be gasified and the resulting synthetic natural gas will be burned to generate the electricity," he said. "The process will generate considerably lower amounts of carbon dioxide and other emissions."

From there, he says the CO2 will be sold to outfits like Denbury Resources for use in pulling oil from older, tapped oil wells. That process will result in the sale of approximately $2 billion worth of CO2 over 40 years that will be deducted from customers' rates.

"Every cent," he said.

Barbour went on to say that it's important for Mississippi, and the U.S., to find as many energy sources at home. He said wind energy isn't an option because lack of steady wind. Solar energy isn't a real option because of the humid, cloudy nature of the state.