Electric utility Mississippi Power said this week that the price tag for construction of its Kemper County Energy Facility carbon capture and storage project had climbed by another $35 million as of March.
The new-build, post-combustion CCS facility in total is now expected to cost over $6.72 billion, the company said in a monthly filing with the Securities and Exchange Commission. That is not far from triple the original $2.4 billion expense estimate for the plant, which is three years overdue.
The estimate through the end of March encompasses total forecast costs exceeding $5.3 billion for construction and nearly $1.4 billion in expenses for associated elements including a lignite mine and equipment and CO2 pipeline facilities. That second segment, which is not subject to the $2.88 billion cost cap set by the Mississippi Public Service Commission, rose by $25 million in March.
In the 8-K document, Mississippi Power repeated a note from the prior report that it has been repairing and updating the refractory lining for all gasifiers in the facility and might need to conduct additional such work, “which could impact the projected in-service date and/or the related cost estimate for the Kemper” Integrated Coal Gasification Combined Cycle project.
“In connection with this evaluation, Mississippi Power continues to expect that the Kemper IGCC will be placed in service during the third quarter 2016 and has revised its previous cost estimate, which included projected costs through August 31, 2016, to include projected additional schedule costs through September 30, 2016.”
Pushing the operational date beyond the end of September is projected to increase base costs by $25 million to $35 million per month, Mississippi Power said, to cover startup labor, materials, fuel, and “operational resources” needed for startup and commissioning. There could also be further expenses to resolve additional equipment and design problems, according to the company, a wholly owned subsidiary of Southern Co.
The facility, being built near the city of Meridian, has been producing energy with natural gas since August 2014. Once fully operational, the plant will use Mississippi lignite, a low-rank brown coal, to produce electricity. It will employ a custom integrated gasification combined cycle (IGCC) system and CCS technology to produce electricity from the coal with carbon emissions roughly equal to that of natural gas. The CCS and IGCC portions of the plant are not online.
