Changes announced to Kemper County energy facility schedule and cost

Changes announced to Kemper County energy facility schedule and cost

kemper aerial
An aerial photo of the Kemper Co. energy facility.

Mississippi Power today filed its monthly Kemper County energy facility project status report with the Mississippi Public Service Commission outlining construction milestones and costs.

The filing identified additional estimated costs subject to the cost cap in the aggregate amount of approximately $88 million including $29 million previously reported in the July PSC report and $59 million reported in the August report.

The estimated cost increases reported in August are due primarily to construction, start-up and operational readiness activities, as well as additional property taxes and insurance. The report also noted the company expects the Kemper IGCC will be placed in service later during 2015 than the previously scheduled in-service date of the second quarter 2015.

“Mississippi Power and Southern Company remain committed to this project. Our investment in integrated coal gasification and the Kemper project – and our belief that this technology represents the future of coal in energy production – has not changed,” said Mississippi Power CEO Ed Holland.
Mississippi Power customers will not pay a penny of cost above the limit agreed to by regulators and legislators.

This latest report also outlined significant milestones achieved at the Kemper facility, including placing the combined cycle into service this summer to help serve customers’ energy needs during peak summer season.

Additional information about the Kemper County energy facility is available at

Certain information contained herein is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the projected cost and schedule for the completion of construction and start-up of the Kemper IGCC. Mississippi Power cautions that there are certain factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Mississippi Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Mississippi Power’s Form 10-K for the fiscal year ended December 31, 2013, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries; available sources and costs of fuels; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; ability to control costs and avoid cost overruns during the development and construction of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed, including changes in labor costs and productivity factors, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, contractor or supplier delay, non-performance under construction or other agreements, operational performance, operational readiness, including specialized operator training, unforeseen engineering or design problems, delays associated with start-up activities (including major equipment failure and system integration), and/or operations; ability to construct facilities in accordance with the requirements of permits and licenses to satisfy any operational and environmental performance standards, including any Mississippi Public Service Commission (PSC) requirements and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; advances in technology; actions related to cost recovery for the Kemper IGCC, including actions relating to proposed securitization, Mississippi PSC approval of Mississippi Power’s proposed rate recovery plan, as ultimately amended, which currently includes the ability to complete the proposed sale of an interest in the Kemper IGCC to South Mississippi Electric Power Association, the ability to utilize bonus depreciation, which currently requires that assets be placed in service in 2014, and satisfaction of requirements to utilize investment tax credits and grants; Mississippi PSC review of the prudence of Kemper IGCC costs; the outcome of any legal or regulatory proceedings regarding the Mississippi PSC’s issuance of the Certificate of Public Convenience and Necessity for the Kemper IGCC, the settlement agreement between Mississippi Power and the Mississippi PSC, the March 2013 rate order, or the State of Mississippi legislation designed to enhance the Mississippi PSC’s authority to facilitate development and construction of baseload generation in the State of Mississippi; and the ability of counterparties of Mississippi Power to make payments as and when due and to perform as required. Mississippi Power expressly disclaims any obligation to update any forward-looking information.