Another delay for Kemper County plant

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Mississippi Power Co.

Kemper County Energy Facility

The beleaguered Kemper County energy facility, known as the most expensive plant per megawatt to date, will go through another month’s delay and project cost increase. The project so far is estimated to cost about $7.5 billion.

Mississippi Power Co. is also asking the Mississippi Public Service Commission to review its proposed rate plan that would update what it charges customers.

The utility is not asking for a rate increase at this time, as critics of the plant expected. Mississippi Power had a June deadline to file a rate case. That date was set during its 2015 rate case proceeding. The utility was expected to file a full rate case this month, but this is not a traditional rate case.

Mississippi Power said in a statement that it is not filing for a full rate case seeking recovery of the project’s costs at this time. Its proposal this week does not include the portion of the plant that is meant to run on lignite coal.

This plan would only pertain to a portion of the plant that is producing energy from natural gas, according to the Public Service Commission.

Mississippi Power said in a statement that it is discussing with the Mississippi Public Utilities staff the status of the project and the nature and timing of a rate filing to address recovery of the remainder of the Kemper project costs not currently in rates.

“Mississippi Power continues to develop a traditional rate case and a rate mitigation plan to address these costs; however, the timing of that filing is uncertain,” the statement said.

In a U.S. Securities and Exchange Commission filed Monday, Mississippi Power announced that the project’s cost estimate has increased by $186 million.

The utility said it expects the facility to be in service by the end of June. It has yet to meet its project deadline, most recently missing its planned May 31 deadline.

Mississippi Power said it experienced leaks in the syngas coolers of the plant’s gasifier B, which required modifications to the syngas coolers on both gasifiers. It said it is resuming production of electricity using syngas from the gasifiers.

PSC

Public Service Commissioner Brandon Presley

As for when the full rate case is filed, commission chair Brandon Presley said in May that reviewing that type of rate case would take months.

“Because of the magnitude of the cost and the project, this is something the commission is going to be doing their due diligence on,” Presley said.

Generally, costs cannot be recovered unless the commission determines them to be prudent.

The utility has a $2.88 billion cost cap for customers regarding the power plant portion of the project.

The utility said in a recent U.S. Securities and Exchange Commission filing that $4.3 billion in project costs is eligible for recovery. There is also no cost cap for recovering its infrastructure-related costs, which have included the plant’s adjacent lignite coal mine, its proposed carbon-dioxide pipeline and transmission.

The rate case process typically takes a few months to accommodate various filings from the utility, ratepayers and other organizations. After the initial rate case filing, interveners such as the commission staff, companies and individual rate payers can pose questions about the filing.

After that, the interveners are able submit data that formally seek other information and evidence regarding the rate case. The utility can then respond with its own data and evidence.

This information is reviewed at an evidentiary hearing. The commission then typically takes a vote on the rate case at a later commission meeting.