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Cost of Kemper plant jumps $60 million in March

SUN HERALD FILEThe lignite portion of Mississippi Power's facility in Kemper County is still expected to be operational in the third quarter of the year, the company said Tuesday. The cost of the project increased by $35 million to $6.7 billion in March.
SUN HERALD FILEThe lignite portion of Mississippi Power's facility in Kemper County is still expected to be operational in the third quarter of the year, the company said Tuesday. The cost of the project increased by $35 million to $6.7 billion in March.

Mississippi Power Co. reported Tuesday it now expects to have its Kemper County power plant operational in September rather than August, and the cost to get it working increased $35 million more in capped costs the utility will pay and $25 million in interest that may be repaid by ratepayers.

That puts the total cost of the facility at $6.7 billion if it goes into operation in September. It was originally estimated to cost about $2.4 billion.

Any delay in getting the lignite portion of the plant running by Sept. 30 will result in an additional $25 million to $35 million a month, the company said.

In its monthly report to the Public Service Commission, the company said its Allowance for Funds Used During Construction is about $14 million a month. Its carrying costs and consulting and legal fees are an additional $2 million per month.

Southern Co., parent company of Mississippi Power, will report its earnings Wednesday.

"As a result of this revised cost estimate, Southern Co. and Mississippi Power recorded total pre-tax charges to income for the estimated probable losses on the Kemper (plant) of approximately $53 million ($33 million after-tax) during the first quarter 2016," the companies said in their report to the PSC and Securities and Exchange Commission.

As the company does each month, Mississippi Power said it does not intend to seek rate recovery from its customers for any costs related to the construction of the Kemper plant that exceed the $2.88 billion cost cap, net of the Department of Energy grants and excluding the cost-cap exceptions.

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