Mississippi Power announces additional $9 million Kemper overrun

kemper county power plant elp

JACKSON, Miss. (AP) — Mississippi Power Co. says it will spend another $9 million on its overrun-plagued Kemper County power plant, pushing its total cost toward $6.8 billion.

The unit of Atlanta-based Southern Co. will absorb the cost, part of $2.5 billion it's absorbing. Southern Co. will write off $38 million before taxes from its quarterly earnings, which will be announced Wednesday. The company says its costs for the three months ended June 30, after taxes, will be $23 million.

Mississippi Power says it still plans to complete the plant before Sept. 30 but is running tests and could announce further delays in August. The company said July 15 that it had successfully produced synthetic gas from lignite coal.

The plant and associated coal mine were originally supposed to cost $2.9 billion at most, and earliest estimates were lower. Customers could be asked to pay as much as $4.2 billion.

Kemper is more than two years behind schedule, generating electricity now by burning natural gas. But it's the plant's ability to turn soft lignite into a synthetic gas and extract carbon dioxide and other pollutants before burning the gas that makes it special.

The reduced carbon dioxide output is supposed to make Kemper emit about the same amount of carbon dioxide as a similarly sized plant burning natural gas. Those lower carbon emissions could help provide what Mississippi Power CEO Anthony Wilson and others call "a way forward for coal." Conventional coal plants emit much more of the greenhouse gas.

Southern Co. faces a lawsuit by a former business partner and an investigation by the U.S. Securities and Exchange Commission into the utility's previous statements about Kemper's cost and schedule. The company could face civil penalties if the SEC concludes the company engaged in fraud. Southern Co. CEO Tom Fanning and others could face criminal penalties, but such prosecutions are rare.

In December, the commission agreed to let Mississippi Power raise rates on its 186,000 customers by $126 million a year to pay for $1.1 billion worth of assets at Kemper that are already in operation, burning natural gas and transmitting electricity to the grid. The company won the rate increase after warning that it was within months of running out of cash because of the costs of building the first-of-its-kind power plant.

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