Mississippi Power has placed into commercial operation the Kemper County energy facility’s combined cycle unit and expects to begin converting locally mined lignite coal into synthetic natural gas to power the unit beginning later this year, the company said Thursday.

“The use of Mississippi lignite adds fuel diversity at low costs and stable prices for Mississippi Power’s customers,” the Southern Company subsidiary said.

The plant, located near DeKalb, MS, is currently burning natural gas and delivering about 700 MW to the grid. That output will decline to 582 MW next year when Mississippi Power begins diverting power to the plant’s gasification units.

The unit was first synchronized to the grid on Oct. 5 during testing using natural gas as fuel. Since then, critical testing has been performed on various components, including the combined cycle unit and two gasifiers last month. Another significant milestone — the first gasifier heat-up — is scheduled for later this year.

“The gasifiers at Kemper are the core of the integrated gasification process, which will be used to convert lignite into synthesis gas,” the utility said.

The estimated cost of the Kemper County energy facility, originally $2.88 billion, was increased to $3.42 billion last year.

Under a recently reached settlement with the Sierra Club, Mississippi Power is planning to repower, convert to natural gas, or retire units at three plants. The company said it will no longer use coal at Plant Watson, converting its two remaining coal-fired units to natural gas no later than April 16, 2015. The plant already has three units that operate on natural gas. At Plant Sweatt, the company will retire two natural gas units, repower with more advanced technology or convert to an alternative non fossil-fuel source no later than Dec. 31, 2018. And at Plant Greene County, Mississippi Power will cease coal operations and convert two units to natural gas no later than April 16, 2016.

Southern Company’s subsidiaries — Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Southern Power — collectively own and operate more than 42,000 MW of power generation capacity in the region, a substantial portion of which is gas-fired.