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Mississippi Power adds more time, more money to Kemper

The in-service date of the Kemper energy facility was pushed back to January and Mississippi Power said Friday the cost of the delay could be an additional $25 million to $35 million.
The in-service date of the Kemper energy facility was pushed back to January and Mississippi Power said Friday the cost of the delay could be an additional $25 million to $35 million. Courtesy of Mississippi Power

Mississippi Power Co. announced late Friday that although it is possible the Kemper power plant will be in service by Dec. 31, it now expects start-up in January.

Extending the in-service date beyond Dec. 31 will add $25 million to $35 million more to the cost for startup labor, materials, fuel and other costs, the company said, and possibly more.

“However, additional costs may be required for remediation of any further equipment and/or design issues identified,” the company said in its monthly report to the Mississippi Public Service Commission.

The October report showed a $6.4 million increase from September to October, “and Mississippi Power and Southern Company — not Mississippi Power customers — will pay this cost increase,” spokesman Jeff Shepard said.

He said Mississippi Power continues making progress. “Last month, the project reached another significant milestone when it generated electricity using syngas from Mississippi lignite on the project’s second gasifier,” he said.

The October report also revealed that through quarterly tax refunds as of Sept. 30, the company received abut $250 million in tax benefits for bonus depreciation, which are dependent upon placing the Kemper IGCC in service by Dec. 31.

If that doesn’t happen “(i)n connection with the fourth quarter estimated tax payment, Mississippi Power will be required to repay this amount through Southern Co.’s intercompany tax allocation,” the report said. “Any Mississippi Power cash need arising from this intercompany payment is expected to be provided through a loan from Southern Co.”

Due to Southern Co.’s projected consolidated net operating loss for 2016, no cash payment will be required to the Internal Revenue Service, the report said.

The lignite plant that originally was expected to cost a little more than $2 billion has soared to nearly $7 billion.

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