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Costs top $7B, deadline extended as Kemper plant reaches milestone

The Kemper energy facility is producing syngas, a major milestone to getting the plant fully operational using lignite, but Mississippi Power has extended the deadline again and costs continue to rise.
The Kemper energy facility is producing syngas, a major milestone to getting the plant fully operational using lignite, but Mississippi Power has extended the deadline again and costs continue to rise.

Mississippi Power reported Tuesday it started producing electricity from both combustion turbines at the Kemper County energy plant Sunday but will need more time for sustained operations.

“This is the facility’s most significant milestone to date,” the company said in a press release.

On Jan. 6, Mississippi Power said it expected the plant to be operational by Jan. 31. The company said it now expects Kemper will be placed in service with lignite in late February.

“The updated schedule reflects an approximate one-week outage necessary to repair and make modifications to further improve the plant’s ability to achieve sustained operations sufficient to support placing the plant in service for customers,” Southern Company, the parent of Mississippi Power, said in a press release.

The December report to the Public Service Commission raised Kemper’s cost estimate by $51 million. “These increased costs will be paid by Southern Company and Mississippi Power — not by Mississippi Power customers,” according to the press release.

Now that the cost of Kemper tops $7 billion, Mississippi Power will conduct an economic-viability analysis to determine if lignite coal is the best way to operate the plant.

Mississippi Power spokesman Jeff Shepard said, “As a result of a revised estimate of ongoing operating costs for the project and a decrease in long-term projected natural gas costs, the company is updating its economic-viability analysis of the project.”

The analysis will measure not only the the cost of lignite vs. natural gas or other alternative power supply options, he said, but the “life-cycle economics of the project,” taking into account operational costs and federal and state taxes and incentives.

The power plant in Kemper County has produced electricity with natural gas since August 2014. It was built to run on lignite coal — controversially known as clean coal — mined in Kemper County. It’s already more than two years behind its May 2014 original date and nearly triple the original estimated cost of $2.4 billion.

The December report from independent monitoring service URS Corp. said through Jan. 1, the start-up progress was 95.6 percent complete overall, which was a 0.2 percent increase from Nov. 27, compared with the 100 percent Mississippi Power had hoped to achieve. The report also listed 10 key technical milestones not yet achieved.

But Shepard said the plant was operating Tuesday on both natural gas and syngas from lignite, with a goal of getting to 100 percent syngas.

“We’re committed to completing and operating this project,” he said.

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