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Researched by Industrial Info Resources (Sugar Land, Texas)--Southern Company (NYSE:SO) (Atlanta, Georgia) and its subsidiary, Mississippi Power Company (Gulfport, Mississippi), have suspended work on the costly Kemper County coal gasification project power facility, setting the stage for a possible settlement to relicense the plant as a natural-gas-only facility.
Southern Company announced Wednesday it was suspending start-up and operations activities involving the lignite gasification portion of the Kemper facility. On June 21, Mississippi utility regulators voted unanimously to have legal counsel prepare a draft order mandating that Mississippi Power burn only natural gas at Kemper, abandoning gasification of lignite as a power plant fuel and forcing the companies to eat billions of dollars of cost overruns tied to the plant's lignite coal gasifier and related assets. The Mississippi Public Service Commission (MPSC) (Jackson, Mississippi) is expected to vote on the draft order July 6. The MPSC gave the involved parties 45 days to reach a settlement once the commission entered its order. The MPSC said on Wednesday that the settlement "would, at a minimum, result in no rate increase to customers and shield customers from any risks surrounding the lignite coal portion of the plant."
For related information, see June 23, 2017, article - Will Kemper County IGCC Become the World's Most Expensive Gas-fired Power Plant?
The 582-megawatt (MW) Kemper County integrated gasification combined-cycle (IGCC) facility would use a first-of-its-kind process to turn local lignite into synthesis gas, burn it in a generator and capture about 65% of the carbon dioxide (CO2) emissions. However, it has been plagued by delays and cost overruns. Originally budgeted at about $2.9 billion, the plant's price tag has ballooned to about $7.5 billion, and it is years behind schedule. According to the Biloxi, Mississippi-based Sun Herald, Southern Company and Mississippi Power have absorbed $3.1 billion of the cost of the facility, leaving $4.4 billion outstanding.
Twice in the last two months, Mississippi Power has had to postpone the date of commercial operations for the new plant, most recently when it determined it needed to repair equipment. For more on that, see June 14, 2017, article - Kemper County Plant Delayed Again, Will Need Costly Repairs and May 3, 2017, article - Kemper County IGCC Delayed Again, Expected to be Operating by End of May.
Southern Company and Mississippi Power noted in a press statement that the natural gas combined-cycle plant at Kemper has been in operation for nearly three years. "The facility will continue to operate using natural gas pending the Mississippi Public Service Commission's decision on future operations," the companies said.
The suspension of work on the lignite gasification project will "preserve the safety and health of the workforce and safety of the facility, while still retaining the necessary workforce to operate the combined cycle power plant," the companies said, adding they believe "this is the appropriate step to manage costs given the economics of the project and the Commission's intent to establish a settlement docket to address Kemper-related matters, including the future operation of the gasifier portion of the project.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Southern Company announced Wednesday it was suspending start-up and operations activities involving the lignite gasification portion of the Kemper facility. On June 21, Mississippi utility regulators voted unanimously to have legal counsel prepare a draft order mandating that Mississippi Power burn only natural gas at Kemper, abandoning gasification of lignite as a power plant fuel and forcing the companies to eat billions of dollars of cost overruns tied to the plant's lignite coal gasifier and related assets. The Mississippi Public Service Commission (MPSC) (Jackson, Mississippi) is expected to vote on the draft order July 6. The MPSC gave the involved parties 45 days to reach a settlement once the commission entered its order. The MPSC said on Wednesday that the settlement "would, at a minimum, result in no rate increase to customers and shield customers from any risks surrounding the lignite coal portion of the plant."
For related information, see June 23, 2017, article - Will Kemper County IGCC Become the World's Most Expensive Gas-fired Power Plant?
The 582-megawatt (MW) Kemper County integrated gasification combined-cycle (IGCC) facility would use a first-of-its-kind process to turn local lignite into synthesis gas, burn it in a generator and capture about 65% of the carbon dioxide (CO2) emissions. However, it has been plagued by delays and cost overruns. Originally budgeted at about $2.9 billion, the plant's price tag has ballooned to about $7.5 billion, and it is years behind schedule. According to the Biloxi, Mississippi-based Sun Herald, Southern Company and Mississippi Power have absorbed $3.1 billion of the cost of the facility, leaving $4.4 billion outstanding.
Twice in the last two months, Mississippi Power has had to postpone the date of commercial operations for the new plant, most recently when it determined it needed to repair equipment. For more on that, see June 14, 2017, article - Kemper County Plant Delayed Again, Will Need Costly Repairs and May 3, 2017, article - Kemper County IGCC Delayed Again, Expected to be Operating by End of May.
Southern Company and Mississippi Power noted in a press statement that the natural gas combined-cycle plant at Kemper has been in operation for nearly three years. "The facility will continue to operate using natural gas pending the Mississippi Public Service Commission's decision on future operations," the companies said.
The suspension of work on the lignite gasification project will "preserve the safety and health of the workforce and safety of the facility, while still retaining the necessary workforce to operate the combined cycle power plant," the companies said, adding they believe "this is the appropriate step to manage costs given the economics of the project and the Commission's intent to establish a settlement docket to address Kemper-related matters, including the future operation of the gasifier portion of the project.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
