COAL

Southern Co. suspends $7.5B Kemper plant

Southern Co. said it will stop all work on the carbon-capture portion of its $7.5 billion power plant in Kemper County, Miss., indefinitely suspending a project that coal backers in Washington had hoped would boost prospects for clean coal.

The decision by Mississippi Power Co., the Southern Co. unit building the plant, came late today in an after-market filing with Mississippi regulators.

The decision comes a week after the Mississippi Public Service Commission said the power plant should run as a natural gas plant. The massive power project, meant to gasify lignite coal, had an original price tag of roughly $2.9 billion. It now stands at $7.5 billion and counting after months of delayed startup dates.

For its part, Southern has absorbed roughly $3 billion in cost increases, but Mississippi Power stood ready to recoup a significant amount from customers once the project was up and running.

Southern widely promoted the idea of building a first-of-its-kind clean coal plant at scale. But the project has been plagued by significant delays and cost increases. Regulators said they would sharply limit how much the utility can recover from customers, shifting the focus to the project's financial viability.

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The utility had to hold off on formally asking to collect $4.3 billion from customers because the plant is not yet operating. The PSC directed the utility to work with the staff attorney and other stakeholders to come up with a settlement within 45 days.

Southern said in the filing the plant will run on natural gas. Kemper has been running on natural gas for years, and each of Kemper's two gasifiers has successfully produced electricity from synthetic gas. But Mississippi Power has struggled to keep the plant's complex systems running nonstop. That has delayed its full startup.

Twitter: @BizWriterKristi Email: kswartz@eenews.net

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