1. Value to Utilities of Agronomic Uses for Gypsum Lamar Larrimore Southern Company September 13, 2006

2. Large Volume Applications Wallboard - established Cement - established Agronomic - potential –Crop yield –Soil erosion –Poultry waste runoff

3. Estimated Gypsum Production and Demand U.S. Gypsum Production (M tons) 200420102020 Mined18.0 Synthetic12.025.040.0 Import10.4 U.S. Gypsum Consumption (M tons) 2004Future TotalFGDTotal Wallboard/Plaster31.38.2similar Cement 3.30.5similar Agriculture Crop 0.70.15 ?? Erosion Control18.0 * Poultry Waste 4.0 * * AL, FL, GA, MS only Sources – USGS, USDA, ACAA Conclusion – Manufacturing markets cannot absorb all FGD gypsum at peak production

4. Gypsum Quality Requirements Manufacturing applications have tighter restrictions for product performance needs moisture, purity, chlorides, ash, particle size Agriculture has fewer criteria moisture, chlorides, Ca/S

5. Environmental Questions Trace element content Potential volatilization of adsorbed emissions Plant tissue uptake

6. Possible Barriers Regulatory –Environmental –Agriculture Technical acceptance Utility interest / commitment Market composition –Fragmented with scattered demand (good/bad) Marketers –Few large regional / national players with agricultural experience –Utilities not set up for agricultural marketing

7. Reasons for Utility Interest Low capital cost Applicable for all power plants Large potential market reduces storage needs Fewer quality criteria Broad needs –Crops –Soil types –Industries

8. Actions Continue to develop additional technical performance and environmental information Develop demonstrations to lend credibility / publicity to lab results and presentations Clearance on environmental regulations Achieve comfort level so that additional permits, R&D, case studies not needed for commercial use Encourage utilities or larger commercial participants to serve fragmented markets Involve U.S. and State Departments of Agriculture