Mississippi Power still working through issues at Kemper IGCC

Southern (NYSE:SO) utility Mississippi Power is still working through issues prior to full startup of a 582-MW coal gasification power plant in Kemper County, Mississippi, and could announce additional cost and schedule changes within a few weeks.

That’s the crux of reports that the utility has filed both with the U.S. Securities and Exchange Commission (SEC) and the Mississippi Public Service Commission.

On April 1, Mississippi Power submitted its Kemper County Integrated Gasification Combined Cycle (IGCC) project monthly status report through February 2016 to the Mississippi PSC.

“During March 2016, Mississippi Power has continued to conduct repairs and modifications to the refractory lining inside each of the gasifiers and to inspect and evaluate the need for additional refractory work, which could impact the projected in-service date and/or the related cost estimate for the Kemper IGCC,” the company said in the regulatory filing.

Mississippi Power’s previously disclosed projected in-service date for the Kemper IGCC is during the third quarter 2016. Any related updates to the schedule for each gasifier would be reflected in the Kemper IGCC status report that the utility expects to file in late April.

Any extension of the in-service date beyond August 31, 2016 is currently estimated to result in additional base costs of approximately $25m to $35m per month, which includes maintaining necessary levels of start-up labor, materials, and fuel, as well as operational resources required to execute start-up and commissioning activities.

However, additional costs may be required for remediation of any further equipment and/or design issues identified. Any extension of the in-service date with respect to the Kemper IGCC beyond Aug. 31, 2016 would also increase costs for the cost cap exceptions not subject to the $2.88bn cost cap established by the Mississippi PSC, the company said.

These costs include allowance for funds used during construction (AFUDC), which is currently estimated to total approximately $13m per month, as well as carrying costs and operating expenses on Kemper IGCC assets placed in service and consulting and legal fees of approximately $2m per month.

Kemper’s combined cycle portion of the plant has been in service since August of 2014. It can provide electricity to the grid while fueled with natural gas.

The Mississippi PSC case is Docket No. 2009-UA-14.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.