Mississippi Power has advised the Mississippi Public Service Commission of a cost increase of $38 million to its integrated gasification combined-cycle plant under construction in Kemper Co.
The utility also told the commission that the project, which has undergone multiple delays and cost increases, is expected to enter service at the end of the month.
- Under a regulatory agreement, the most recent cost increase, like many prior to this one, will be borne by Mississippi Power and by its corporate parent, Southern Co., not by Mississippi Power ratepayers.
Mississippi Power’s Kemper project has suffered multiple setbacks. In early April, the utility said the plant would be in service by the end of April. It is now looking at an end of May online date. The project was originally expected online in May 2014.
The plant is designed to burn a synthesis gas derived from a local lignite mine, but problems with the gasifiers has forced the plant to run on natural gas.
The most recent cost increase consists of $22 million for extending the project’s schedule, $8 million related to start-up fuel and $8 million related to the a repair outage. The most recent cost increase brings the project’s total cost to $7.3 billion.
The constant cycle of delayed start dates and rising costs propelled Moody's to place Mississippi Power on review for downgrade, which could push their bonds into non-investment grade—or junk—territory. Parent company Southern Co. for now escaped impacts from rating downgrades on Mississippi Power, but Moody's warned further plant delays at other subsidiaries would hurt the company. Southern Co. is facing its own construction and cost problems at its Vogtle nuclear facility.