Abby L. Harvey
GHG Monitor
12/4/2015
Mississippi Power this week announced another cost estimate increase, this time totaling $62 million, for the Kemper County Energy Facility, a new-build post-combustion carbon capture and storage project under development near the city of Meridian. Such overages are not new to Mississippi Power, a subsidy of Southern Co.: The project’s total cost has grown consistently from its initial price tag of $2.4 billion to the current $6.488 billion.
The plant, once completed in 2016, will use Mississippi lignite, a low-rank brown coal, to produce electricity. It will employ a custom integrated gasification combined cycle (IGCC) system and carbon capture and storage technology to provide power from the coal with carbon emissions roughly equal to those of natural gas. The project’s captured CO2 will be used for enhanced oil recovery.
The latest cost estimate spike, according to Mississippi Power’s October filing with the Securities and Exchange Commission, is “related to additional resources needed for commissioning, start-up and testing activities as well as operational readiness, including resources related to completing additional required punch list items.”
The company reported a $110 million overage in its September filing, which included a “further adjustment of approximately $20 million for the month of September related to challenges in start-up and commissioning activities as well as operational readiness and approximately $90 million related to the recognition of additional schedule costs through June 30, 2016.”
Portions of the plant are already operational, supplying electricity generated with natural gas to the surrounding area. However, the carbon capture and gasification systems are still undergoing testing. Mississippi Power remains insistent that “[t]he remainder of the Kemper IGCC is expected to be placed in service in the first half of 2016,” the filing says. Prior reports have suggested that full operation will be reached sometime after April 19, 2016.
