Mississippi Power’s monthly Kemper County energy facility status report with the state Public Service Commission includes an additional $418 million pre-tax estimated probable loss for the third quarter of 2014 and an extension of the plant’s expected in-service date to the first half of 2016.
As previously announced, the company has been reviewing the schedule for the remainder of the project, including the gasifier and gas clean up facilities. Additional time is required for start-up activities and operational readiness, including enhancing the scope of specialized operator training.
“While it will take longer to complete the project, and the capital costs are higher than expected, Mississippi Power still believes in the team that is responsible for constructing and starting up the plant, along with the operations team currently running the combined cycle and training personnel for full operation of the gasification facility,” CEO Ed Holland said.
“These teams are working hard to bring this plant safely online for the benefit of Mississippi Power customers for decades to come,” he added.
Major construction on the project is “essentially complete” and the combined cycle portion of the plant has been in service since early August. The plant has been running at a capacity factor of 80 percent and has a reliability rate four times better than the industry average for combined cycles, Holland said.
The company continues to be committed to the long-term success of the project and the implications it has for coal use around the world. Last month, the top climate technology official for the United Nations toured the plant and said the project “gives hope” to developing countries.
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 cost and schedule for completion of the Kemper County energy facility.
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; ability to control costs and avoid cost overruns during the development and construction of facilities; ability to construct facilities in accordance with the requirements of permits and licenses to satisfy any operational and environmental performance standards and to integrate facilities into the Southern Company system upon completion of construction; advances in technology; actions related to cost recovery for the Kemper County energy facility and satisfaction of requirements to utilize investment tax credits and grants; Mississippi PSC review of the prudence of the Kemper County energy facility costs; the outcome of any legal or regulatory proceedings regarding any 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.