As Mississippi Power continues start-up and commissioning activities at the Kemper County energy facility, the company today announced it expects the facility to be in service by April 30.
The schedule adjustment is related to repairs of tube leaks and associated corrective actions in one of the project’s syngas coolers. The repairs have been completed and the new schedule reflects the time needed for restarting that portion of the plant and to achieve integrated operation of all plant systems.
Integrated operation includes the simultaneous operation of each of the plant’s two gasification, gas cleanup, and generation systems. While the repair was required for the syngas cooler of one gasification system, the other gasification system remains in operation and has been providing clean syngas for chemical product production and electric power generation.
The company’s February report to the Mississippi Public Service Commission contains an increase in the cost estimate subject to the cost cap for the Kemper IGCC of approximately $70 million. These costs will not be paid by customers and include an adjustment of approximately $45 million related to extending the projected schedule through April 30, $15 million related to start-up fuel and $10 million primarily related to outage work and operational maintenance and improvements. The total cost of Kemper eligible for recovery from customers is currently approximately $4.2 billion.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this communication 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 completing construction and start-up of the integrated coal gasification combined cycle project in Kemper County, Mississippi (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 Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: changes in tax and other laws and regulations to which Mississippi Power is subject as well as changes in application of existing laws and regulations; the ability to control costs and avoid cost overruns during the development, construction and operation 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, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, sustaining nitrogen supply, contractor or supplier delay, non-performance under operating or other agreements, operational readiness, including specialized operator training and required site safety programs, unforeseen engineering or design problems, start-up activities (including major equipment failure and system integration), and/or operational performance (including additional costs to satisfy any operational parameters ultimately adopted by the Mississippi Public Service Commission (PSC)); the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards 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 the ultimate impact of the 2015 decision of the Mississippi Supreme Court, the Mississippi PSC’s December 2015 rate order, and related legal or regulatory proceedings, Mississippi PSC review of the prudence of Kemper IGCC costs and approval of further permanent rate recovery plans, actions relating to proposed securitization, satisfaction of requirements to utilize grants, and the ultimate impact of the termination of the proposed sale of an interest in the Kemper IGCC to South Mississippi Electric Power Association (now known as Cooperative Energy); 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.