Southern Co delays advanced coal plant to 2015 amid rising costs

Posted by Joseph R. Fonseca
Tuesday, April 29, 2014
logo

 

Southern Co will take a $235 million charge in the first quarter and delay the startup of its $5.5 billion coal-gasification power plant in Kemper County, Mississippi, the company said in a filing with regulators on Tuesday.

Southern Co, based in Atlanta, is scheduled to release its first-quarter earnings on Wednesday.

Southern has previously taken $729 million in charges related to more than $1 billion in cost overruns at the 582-megawatt Kemper County plant, one of only two integrated gasification combined-cycle (IGCC) plants in the nation.

Mississippi Power, Southern's smallest utility, owns the facility and plans to complete the gas-fired, combined cycle portion of the project this summer.

However, the in-service date for Kemper's complex gasification system has been delayed to the first half of 2015, one year later than initially planned.

"The company remains focused on working safely and tirelessly to complete the facility and bring it online for the benefit of customers for decades to come," Mississippi Power said in a statement.

The power industry has been closely watching progress at the Kemper plant. Because it will be able to capture carbon dioxide emissions, the Kemper plant has been cited as a model for future coal-plant design by the U.S. Environmental Protection Agency which has proposed strict limits on carbon pollution from coal-fired power plants.

However, Southern officials have asked the EPA to refrain from using Kemper as a standard for the industry because of its unique location.

Southern blamed the latest cost overrun on lower construction productivity due to adverse weather at the site, unexpected worker turnover and installation "inefficiencies" related to the complex piping in the gasification system.

Earlier this year, Southern reported additional construction costs of $184 million. On Tuesday, the company revised its cost estimate by another $61 million and added $135 million related to the delay in the expected in-service date.

With the $380 million increase, Kemper's price tag now exceeds $5.53 billion, more that twice the $2 billion figure announced when the plant was proposed.

Mississippi Power can only recover $3.8 billion of Kemper costs through customer rates and the sale of securitized bonds. Customers began paying higher rates related to the plant last year after a lengthy battle with state regulators.

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Panama Canal Infrastructure to be Valued by VRC

Leading provider of independent valuations, Valuation Research Corporation (VRC) says it has been engaged by the Panama Canal Authority to value the locks, dams,

Box Ships on Slippery Containership Slope in Q2

"The reduced charters on the 'Box Queen', 'CMA CGM Marlin' and 'CMA CGM Kingfish' were the contributing factors to the 24% decline in our adjusted time charter revenues year over year,

Norwegian to Buy Prestige Cruises in $3b Deal

Norwegian Cruise Line Holdings Ltd (NCLH.O) said it would buy Prestige Cruises International Inc from its owner Apollo Global Management LLC (APO.N) in a $3 billion

Energy

Shell CEO: US Should Export Oil, Embrace Global Markets

The head of energy company Royal Dutch Shell said on Tuesday that U.S. policymakers should lift the crude oil export ban because allowing the shipments would make global energy system more stable.

Bureau Veritas Diversifies with MatthewsDaniel Acquisition

Bureau Veritas announced today that it has acquired MatthewsDaniel Ltd, a global provider of loss adjusting and risk assessment services for the offshore industry.

Fogal Retires from Zentech After 57 Years in O&G

Robert “Bob” “Sonny” Fogal, Jr., one of the icons in the offshore oil and gas industry, has decided to retire from front-line work as Zentech’s Director of Business Development.

News

USCG Cutter Eagle to Open for Tours in Yorktown

Coast Guard Cutter Eagle, America's tall ship and seagoing classroom for future officers in training, is scheduled to be open for tours Saturday at Coast Guard Training Center Yorktown.

30 Rosneft Subsidiaries in All-Russian Environmental Cleanup Day

Thirty Rosneft subsidiaries in most of the regions of the Company presence, from Sakhalin in the east to the Arkhangelsk Region in the west, took part in the

Newport International Boat Show Highlights

Newport Exhibition Group, owners and producers of the Newport International Boat Show, announced today activities and amenities for those planning to attend its 44th boat show season,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Navigation Pipelines Port Authority Ship Repair Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1510 sec (7 req/sec)