More Kemper power plant delays
More than $4 billion over budget and more than two years late, Mississippi Power Co. announced Tuesday that its $7.1 billion Kemper County plant is finally making electricity from gasified lignite coal.
But the unit of Atlanta-based Southern Co. said that after achieving the goal Sunday, it must make more modifications. It's pushing back the target date for full commercial operation to Feb. 28, increasing costs by another $78 million. It's the seventh delay for the plant in the past 12 months.
Important in the upcoming regulatory fight over who will pay for Kemper, Mississippi Power also said that it's again reviewing projections of how much Kemper will cost versus how much a typical natural gas plant would cost.
Because natural gas prices have fallen and Kemper operating cost projections have risen, the company said in a stock filing that it expects viability projections to be "negatively impacted."
Mississippi Power now projects operation and maintenance costs will total $1 billion in its first five years — four times what regulators approved.
In 2015, Mississippi Power raised rates on its 186,000 customers by $126 million a year to pay for that $1.1 billion part of Kemper, which has been generating electricity since 2014.
Of the next $78 million, the company could ask regulators to let it charge customers for $27 million, while it will absorb $51 million. Southern Co. shareholders have so far absorbed $2.7 billion in losses. Customers could ultimately be asked to pay $2.4 billion.
The plant is designed to capture 65 percent of the carbon dioxide from the burning coal, releasing only as much of the climate-warming gas as a typical natural gas plant does. But Shepard said it isn't yet capturing carbon dioxide.