Dive Brief:
- Mississippi Power Co. will spend another $25 million for startup and commissioning costs at its Kemper coal facility, expected to be online next year.
- The original cost estimate of $2.8 billion has balloned to more than $6 billion for the facility, which will be one of two coal gasification facilities in the country.
- Customers this month will begin seeing an 18% rate increase associated with the facility, The Chronicle reports, though a court case is being prepared to challenge the increase.
Dive Insight:
The price of the Kemper coal gasification project continues to ruse, but the The Chronicle notes that Mississippi Power rather than customers will be picking up the $25 million needed for startup and commissioning. Expected to be online next year, the facility's price tag has essentially tripled since development began in 2008.
The Public Service Commission has approved an 18% emergency rate increase, but that decision is likely to wind up in court. An opponent of the project and a candidate for the PSC, Thomas Blanton, last month convinced the state's Supreme Court to overturn a similar increase and he has indicated he will challenge the emergency increase as well.
The Kemper facility actually began generating gas power last year, but is not expected to begin burning the synthetic gas until next year. Located in Kemper County, the 582-MW facility would be the first Mississippi Power baseload plant built in more than 30 years and is one of two coal gasification plants in operation in the United States today, along with Duke's Edwardsport plant in Indiana.
Rising costs have soured some backers, however. Earlier this year South Mississippi Electric announced it would not follow through with its plan to purchase a stake in the plant, citing delays and cost overruns since the purchase agreement was signed in 2010.
