Dive Brief:

• The Mississippi Public Service Commission will vote Feb. 6 on a settlement between Mississippi Power and several other parties addressing final costs associated with the Kemper County coal-gasification facility. 
• The utility issued a statement saying the agreement represents "meaningful compromise" and follows regulators' guidelines to remove customer risk for the cost of the gasifier system and to operate the plant as a natural gas facility.
• The Kemper coal gasification project was an attempt at making "clean coal" a reality, but after going billions over budget without the system working consistently, the utility's parent company Southern Co. pulled the plug in June of last year.

Dive Insight:

Kemper has been producing gas-fired power since 2014, but was never able to make the coal gasifier work consistently. Four years later, regulators are poised to bring to a close the financial wrangling over that failure.

Last summer, Southern announced it was giving up on the idea, and would run the facility simply as a combined cycle gas-fired facility. The company spent $7.5 billion on the project before throwing in the towel on a project originally estimated at $4 billion.

A final hearing was held this week on the settlement, which included staff of the commission, the state's attorney general and several businesses such as Chevron and Wal-Mart. The commission had directed the parties to reach an agreement that would not involve a customer rate increase and would eliminate risk for them, while also continuing to operate the facility solely on natural gas.

The settlement also stipulates that if Mississippi Power chooses to pursue the gasification system in the future, customers would not be liable for the costs even if the assets are successfully used.

The parties are stipulating to a revenue requirement estimated to result in an overall retail annual revenue requirement of approximately $112.6 million, "resulting in a reduction in revenue requirement from the current rates in place for the Kemper CC."

Stipulated total company Kemper CC capital investment, the average net rate base, would be almost $854 million.