Southern Co. (NYSE: SO), the parent company of Mississippi Power that is building the 582-MW project, said in a 10-Q filing that the SEC is “conducting a formal investigation of Southern Company and Mississippi Power concerning the estimated costs and expected in-service date of the Kemper IGCC.” The current cost estimate for the project is now $6.58 billion, including approximately $5.35 billion of costs subject to the construction cost sap and is net of $137 million in additional grants from the Department of Energy last month. Mississippi Power does not intend to seek any rate recovery for costs that exceed the $2.88 billion cost cap.
During 2016, Mississippi Power further revised its cost estimate to build and bring to operations the Kemper IGCC project. The state Public Service Commission in August 2015 granted a temporary rate hike to keep the utility from going bankrupt. The combined-cycle facility at the Kemper site has been in operations since 2014.
The utility also said a civil lawsuit against Mississippi Power was filed in April, claiming Mississippi Power hid and falsely represented facts concerning the cost and schedule of the Kemper IGCC project, and that these actions “interfered with a destroyed economically advantageous relationships between the plaintiffs and their current and prospective business associates.” The plaintiffs seek unspecified actual and punitive damages, as well as an injunction to prevent and Kemper IGCC costs from being charged to customers through electric rates.