Kemper plant cost bumped up $70M, new start date set

Print More

The cost estimate for the beleaguered Kemper County energy facility has gone up by $70 million to $7.2 billion, according to operator Mississippi Power Co. in its February report to the Mississippi Public Service Commission.

The added cost breaks down to about $45 million for extending the project’s schedule through April 30; $15 million is related to start-up fuel; and $10 million for outage work and operational maintenance and improvements, Mississippi Power announced Monday.

Mississippi Power, a unit of Atlanta-based Southern Co., in March announced the plant had experienced tube leaks in one of the syngas, or synthesis gas, coolers for one of its two gasifiers—machines that convert lignite coal into gas—and temporarily shut down that gasifier to address the problem.

In a U.S. Securities and Exchange Commission filing this week, the utility says this new schedule through the end of April reflects the time it would take to restart the plant’s gasifier A and establish its integrated operation with gasifier B, which has remained in operation since the first one was taken offline.

The plant, which is running on natural gas, was at one point supposed to go into full operation running on syngas by May 2014.

As in previous filings, Mississippi Power estimated that missing this latest deadline would cost about $25 million to $35 million per month. Additional costs also may be required if any further equipment or design issues emerge, the utility says.

As for what the public pays, there currently is a $2.88 billion cap for Mississippi Power customers. Any increase beyond that depends on Mississippi Public Service Commission approval, a process that will start when the company submits its new rate case to the commission on June 3.