Kemper County IGCC – another $43m cost overruns, further delays

The power plant portion produced electricity for Mississippi Power customer since August 2014. However, there have been difficulties and delays at the plants “front end” – notably surrounding the production of syngas, using the transport integrated gasification technology or TRIG.

“The Kemper project team is now focussed on starting up and integrating various systems needed to achieve the next milestone – using the syngas to produce electricity,” the future operator said. Yet, construction of the “front end” is progressing slowly so the overall project is already two years behind schedule.

Once fully operational, the Kemper IGCC will produce electricity with a syngas-only net output capability of 524 MW and with a peak net output capability of 582 MW. The pilot project will be a first-of-its-kind electricity plant to employ gasification and carbon capture technologies at industrial scale.

Total costs escalate 

The operator also revised its cost estimate, subject to the cost cap for the Kemper project, to include an additional $43 million. These additional cost overruns are related to the schedule extension and start-up activities; hence total costs have now escalated to over $6.8 billion.

“All of those costs will be paid by Southern Company and Mississippi Power – not by Mississippi Power customers,” the operator stressed in a statement; however, it is understood to seek permission to increase electricity rates. Over $13 million per month in financing costs and $7 million per month for items such as operating expenses and carrying costs are expected to be incurred, Southern Co. said earlier, suggesting those costs are not capped and are eligible for rate recovery.

Mississippi Power, a subsidiary of Southern Company, produces energy for more than 186,000 customers in 23 southeast Mississippi counties.