An increased cost estimate for the construction of the Mississippi Power Kemper integrated gasification combined-cycle (IGCC) power plant hurt Southern (NYSE:SO) earnings for the first quarter of 2016.
Southern said April 27 that it had first quarter earnings of $485m, or 53 cents per share, compared with earnings of $508m, or 56 cents per share, in the first quarter of 2015.
Earnings for the first quarter include after-tax charges of $33m, or 4 cents per share, related to an increased cost estimate for the construction of Mississippi Power’s Kemper IGCC project. First-quarter earnings for 2015 included an after-tax charge of $6 million for the Kemper IGCC project.
The project will gasify local Mississippi lignite coal to generate electricity and also capture carbon dioxide (CO2) emissions. The combined-cycle natural gas portion of the plant is already operational.
“We saw positive customer growth, along with strong residential and commercial sales and a robust economic development pipeline,” said Southern Company Chairman, President and CEO Thomas Fanning of the quarterly performance
“Our franchise operations and our competitive generation subsidiary, Southern Power, continue to perform at a high level and deliver on our core strategy of providing clean, safe, reliable and affordable energy to customers,” Fanning said.
Kilowatt-hour sales to retail customers in Southern Company’s four-state service area decreased 3% in the first quarter of 2016, compared with the first quarter of 2015. Residential energy sales decreased 7.2%, commercial energy sales decreased 0.7% and industrial energy sales decreased 0.8%.
Southern Company’s financial analyst call will begin at 1 p.m. Eastern time, during which Fanning and CFO Art Beattie will discuss earnings and provide a general business update.
Investors, media and the public may listen to a live webcast of the call and view associated slides at http://investor.southerncompany.com/webcasts.