Cost estimate on Kemper IGCC power project goes up $540MM

Source:Mississippi Power

As Mississippi Power approaches the final year of construction on the coal-fueled Kemper County integrated gasification combined-cycle (IGCC) project, the company has revised its cost estimate from $2.88 billion to approximately $3.42 billion.

The company will not seek to recover the increase from customers.

“While we are disappointed that costs have increased, we believe we have done the right thing by remaining accountable to our customers,” said Ed Day, president and CEO of Mississippi Power. “Equally important is keeping the promise we made in the settlement agreement with the Mississippi Public Service Commission to limit the total rate base for the plant to $2.4 billion, net of Department of Energy grants and cost cap exceptions.”

Mississippi Power continues to make tremendous progress on the facility; however, the company has recognized additional cost pressures, including labor costs, piping and other material costs, engineering and support costs, and productivity decreases.

There are currently 3,500 workers on-site and nearly 400 Mississippi companies involved in the project. A considerable amount of work has been accomplished this past quarter with the final component of the gasifier safely and successfully lifted into place, and the water treatment facility and combined-cycle cooling tower completed.

The project is a massive pioneer effort on the cutting edge of technology and is expected to offer significant long-term benefits to customers.

For the most up to date and in-depth news on the global coal industry visit PennEnergy's comprehensive Coal-Fueled Generation topic center to access industry focused articles and reports.

 

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