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Regulators Back Settlement for Costs of Failed Kemper IGCC Project

February 7, 2018

Shareholders of Mississippi Power will have to absorb the majority of outstanding costs resulting from the scuttled Kemper County coal gasification project, as the state’s Public Service Commission (PSC) on February 6 approved a settlement for the remaining liabilities associated with the much-touted “clean coal” plant.

Mississippi Power in a statement said it “is pleased with this final order from the Public Service Commission, which effectively settles all costs associated with the Kemper County energy facility.” Anthony Wilson, the company’s CEO, in a statement after today’s vote said, “The economics really didn’t work out and the technology was hard to perfect.”

The PSC in 2017 told Atlanta-based Southern Co. to end construction at Kemper. The gasification project, touted as the future of coal, never was operational, as costs ballooned from an original price tag of $ 2.9 billion to about $ 7.5 billion. The settlement agreement, which was reached last year pending approval, means Mississippi Power, a subsidiary of Southern Co.,…

Southern Co. to File Rate Case for Kemper IGCC, Already Economically Unviable in Face of Cheap Gas

June 3, 2017

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Announcing yet another lag beyond a new in-service date for its Kemper County integrated gasification combined cycle (IGCC) project, Southern Co. may raise discussions with regulators about the possibility of scrapping the project’s gasification component.

The company’s subsidiary Mississippi Power last said the first-of-its-kind project should begin operations by May 31. On May 31, however, the utility announced that the facility “is not currently fully operational.” It also said it would delay a monthly project status report that was due on June 1 to the Mississippi Public Service Commission (MPSC). It plans to submit the report on June 5 instead, because “the company continues to assess the project’s schedule and cost.”

On June 5, the company is also likely to make a rate filing for the project. It is expected to request an accounting order to defer all costs incurred after the project is operational, that are not subject to a cost cap, and are not already included in rates.

Mississippi law allows Mississippi Power to file both a traditional rate case and an alternative multi-year rate mitigation plan.…

Kemper IGCC, Delayed Again, May Not Be Economically Viable

February 23, 2017

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Southern Co.’s Kemper County integrated gasification combined cycle (IGCC) project, stricken by steep cost increases and an in-service date delayed again to mid-March, isn’t economically viable in the face of projected long-term natural gas prices, the company said.

Southern Co. subsidiary Mississippi Power reported that integrated operation of the facility’s two gasifiers and combustion turbines has “continued for periods” since late January. In the past month, the project has also captured carbon dioxide and placed it in the pipeline for use in enhanced oil recovery.

However, the company was once again forced to adjust the project’s schedule after Mississippi Power determined that an outage was needed to remove ash deposits from Gasifier B’s ash removal system. The gasifier has been producing syngas 60% of the time since November 2016. During the outage, Gasifier A and one combustion turbine are expected to remain operational, continuing to produce power as well as sulfuric acid and ammonia as designed. But the full IGCC project won’t be placed into service until mid-March.…

Delayed Again, Kemper County IGCC Plant to Start Operations in a Month

October 6, 2016

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Mississippi Power’s integrated gasification combined cycle (IGCC) power plant under construction in Kemper County, Miss., will likely be placed in service by November 30, a month later than anticipated. The delay will be costly.

Mississippi Power reached a new milestone on September 16, announcing that it had started producing syngas using the second gasifier—gasifier “A”—at the facility. Initial production of syngas at gasifier “B” began on July 14, demonstrating the viability of transport integrated gasification technology, which is being used for the first time at commercial scale, Southern Co. said in a statement.

In late August, however, gasifier B was taken offline for inspection, the company said in an October 3 filing with the U.S. Securities and Exchange Commission.

“The removal of ash and ash deposits prior to the inspection of gasifier ‘B’ required more time than initially expected. Additional time has been added to the schedule to allow for the restart of gasifier ‘B’ and for both gasifier trains to achieve the sustained capacity levels necessary for the initial operations and testing of the syngas clean-up systems and the production of electricity using syngas,” it said.…