MS Power pushes back Kemper plant in-service date, adds $35M to price tag

MS Power pushes back Kemper plant in-service date, adds $35M to price tag

KEMPER COUNTY, MS (WLOX) - Mississippi Power is extending the start-up date for its Kemper County Lignite Plant.

The delay adds another $35 million to the project's price tag, which now tops $7 billion. The latest problem causing yet another delay in the start-up of the Kemper County plant, is trouble with the ash removal system.

Despite the setback and additional cost, the CEO of the Southern Company remains confident in the long term viability of the plant.

"No one is more upset about the delays and the cost increases than the folks here at Mississippi Power are. We are working as hard and as safe as we possibly can to get this facility up and running," said Mississippi Power spokesman, Jeff Shepard.

According to Shepard, many of the delays relate to the cutting edge technology and first-of-its-kind facility the power company is opening.

"This is the first time, anywhere in the world, that lignite is being turned into a gas. Carbon dioxide and other by products are being taken out of that gas and electricity is being created," said Shepard. "There's no book already written or instruction manual to follow. We are really writing the instruction manual ourselves up there. This is serial number 001."

Steve Renfroe served for more than two years on the Public Service Commission. He says a big, still unanswered question, is cost recovery.

"Kemper was an issue when I arrived and it was still an issue when I left. And it remains an issue today," said Steve Renfroe.

How much more will rate payers be charged as a result of Kemper?

"They won't even enter into a discussion on that until Mississippi Power demonstrates viability, and then they'll get into how much Mississippi Power will be allowed to recover on the rates. Again, the cost cap is a big deal for rate payers. It will dramatically limit how much Mississippi Power will be able to recover," explained Renfroe.

The low cost of natural gas has made the Kemper plant much less economically viable at the moment. But during a financial earnings conference call, Southern Company CEO Tom Fanning seemed to dismiss the notion of converting Kemper to an all gas plant.

"I suppose there's a million different scenarios we could evaluate. The good news is, you folks know as well as we do, it's a painful process. Getting to this point, we've taken our lumps. But we have delivered what was certificated back in 2010. I think we will," Fanning told reporters.

Mississippi Power expects to file its rate recovery plan by mid-year.

Southern Company CEO Tom Fanning, said Mississippi Power will file both a traditional rate case and an alternative multi-year rate mitigation plan with the Public Service Commission.

The multi-year plan could possibly spread out the increase paid by customers, over a longer period of time.

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