Kemper Co. Plant cost increases $15 million, company says customers won't pay

GULFPORT, MS (WLOX) - The cost of Mississippi Power's Kemper County power plant has increased $15 million, according the latest status report the company filed with the Public Service Commission. In Tuesday's report, the power company outlined additional costs to complete the plant and get it operating, but Mississippi Power's CEO said that cost will not be passed on to customers.

"In this month there is an increase of about $15 million in cost increases in the capped amount which means the customer, and this is very very important, the customer will not pay for one penny of that $15 million in cost increase for this month," said Mississippi Power CEO Ed Holland.

As work continues to bring the plant online using Mississippi lignite it is running on natural gas.

"We've got the combined cycle that has been running since August 9 of 2014 and it has been running extremely well. It's been running at a 99 percent availability. It is that part of the facility that has been providing economical energy to our customers for over a year and for which we have not recovered one dime that we are asking for recovery in the rate hearing that will occur on November 10," Holland added.

Mississippi Power also made a slight adjustment to the scheduled completion of the Kemper plant. The entire project is still expected to be completed in the first half of 2016, however the company anticipates the plant to be in full service, operating on lignite, after April 19 instead of by March 31 date previously released.

All of the cost estimates and numbers are based on that March 31 date, so any extension beyond that is an increase to the cost of the project. And any extension of the projected completion date past March is estimated to result in approximately $25 to $30 million per month, above the project's cost cap. Because its above the cost cap, customers won't pay that either.

The shift of the estimated completion date requires the company to return $234 million to the IRS. Southern Company is expected to support Mississippi Power's cash needs in returning the funds to the IRS.

If the completion date goes past March 31, the company is expecting an additional increase of $20 million a month in operating and financing costs Those costs are not capped and are eligible for rate recovery from customers, if the Public Service Commission approves it. 

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