Latest delay pushes Kemper power plant price over $7 billion

AP_Kemper_Lawsuit

JACKSON, Miss. (AP) — Mississippi Power Co. says its Kemper County power plant will be delayed another month.

The latest delay, confirmed Friday, pushes the plant's price tag over $7 billion. Of the nearly $52 million increase caused by the delay, the unit of Atlanta-based Southern Co. says shareholders will pay $34 million. Ratepayers could be asked to pay the rest.

The plant and associated coal mine were originally supposed to be finished in May 2014 and cost $2.9 billion at most. Customers are already paying for more than $1 billion in assets that are generating power using natural gas and could be asked to pay as much as $4.2 billion overall, if regulators approve. Shareholders have absorbed nearly $2.7 billion in losses.

Mississippi Power had already warned that completing the plant was likely to push past the previous Dec. 31 deadline. On Friday, the company confirmed it now aims to put the plant into commercial operation by Jan. 31.

To reach that milestone, the company must synchronize the two units that gasify lignite coal. Mississippi Power has tested them individually, but has not yet attempted to run them at the same time, which requires further coordination.

"This is why we build in this time in the schedule," spokesman Jeff Shepard said.

Brett Wingo, an engineer who formerly worked at the Kemper plant, has said the company is compressing the time needed to fine-tune operations.

In a filing to securities regulators, the company said that one obstacle to reaching commercial operation is having a large enough nitrogen supply to start up the gasifiers. Shepard said the company is having nitrogen trucked in to supplement the capacity of the on-site nitrogen production plant.

Increasing potential costs to ratepayers are interest on borrowed money and consulting and legal fees. Regulators on the Mississippi Public Service Commission have said they're likely to question those amounts, saying customers shouldn't have to pay for company mistakes.

Kemper is designed to remove carbon dioxide from synthetic gas made from lignite coal, cutting carbon dioxide emissions. It's been making power using natural gas since 2014 and has now made electricity by burning synthetic gas from each of two gasifiers.

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